EXHIBIT 10.4
(Bilateral Form) (ISDA Agreements Subject to New York Law Only)
ISDA(R)
International Swaps and Derivatives Association, Inc.
CREDIT SUPPORT ANNEX
to the Schedule to the
ISDA Master Agreement (Local Currency)
dated as of January 15, 1999
between
BankBoston, N.A. and CMGI, Inc.
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("PArty A") ("Party B")
This Annex supplements, forms part of, and is subject to, the
above-referenced Agreement, is part of its Schedule and is a Credit Support
Document under this Agreement with respect to each party.
Accordingly, the parties agree as follows:--
PARAGRAPH 1. INTERPRETATION
(a) DEFINITIONS AND INCONSISTENCY. Capitalized terms not otherwise defined
herein or elsewhere in this Agreement have the meanings specified pursuant to
Paragraph 12, and all references in this Annex to Paragraphs are to Paragraphs
of this Annex. In the event of any inconsistency between this Annex and the
other provisions of this Schedule, this Annex will prevail, and in the event of
any inconsistency between Paragraph 13 and the other provisions of this Annex,
Paragraph 13 will prevail.
(b) SECURED PARTY AND PLEDGOR. All references in this Annex to the
"Secured Party" will be to either party when acting in that capacity and all
corresponding references to the "Pledgor" will be to the other party when acting
in that capacity; provided, however, that if Other Posted Support is held by a
party to this Annex, all references herein to that party as the Secured Party
will respect to that Other Posted Support will be to that party as the
beneficiary thereof and will not subject that support or that party as the
beneficiary thereof to provisions of law generally relating to security
interests and secured parties.
PARAGRAPH 2. SECURITY INTEREST
Each party, as the Pledgor, hereby pledges to the other party, as the
Secured Party, as security for its Obligations, and grants to the Secured Party
a first priority continuing security interest in, lien on and right of Set-off
against all Posted Collateral Transferred to or received by the Secured Party
hereunder. Upon the Transfer by the Secured Party to the Pledgor of Posted
Collateral, the security interest and lien granted hereunder on that Posted
Collateral will be released immediately and, to the extent possible, without any
further action by either party.
PARAGRAPH 3. CREDIT SUPPORT OBLIGATIONS
(a) DELIVERY AMOUNT. Subject to Paragraphs 4 and 5, upon a demand made by
the Secured Party on or promptly following a Valuation Date, if the Delivery
Amount for that Valuation Date equals or exceeds the Pledgor's Minimum Transfer
Amount, then the Pledgor will Transfer to the Secured Party Eligible Credit
Support having a Value as of the date of Transfer at least equal to the
applicable Delivery Amount (rounded pursuant to Paragraph 13). Unless otherwise
specified in Paragraph 13, the "DELIVERY AMOUNT" applicable to the Pledgor for
any Valuation Date will equal the amount by which:
(i) the Credit Support Amount
exceeds
(ii) the Value as of that Valuation Date of all Posted Credit
Support held by the Secured Party.
(b) RETURN AMOUNT. Subject to Paragraphs 4 and 5, upon a demand made by
the Pledgor on or promptly following a Valuation Date, if the Return Amount for
that Valuation Date equals or exceeds the Secured Party's Minimum Transfer
Amount, then the Secured Party will Transfer to the Pledgor Posted Credit
Support specified by the Pledgor in that demand having a Value as of the date of
Transfer as close as practicable to the applicable Return Amount (rounded
pursuant to Paragraph 13). Unless otherwise specified in Paragraph 13, the
"RETURN AMOUNT" applicable to the Secured Party for any Valuation Date will
equal the amount by which:
(i) the Value as of that Valuation Date of all Posted Credit
Support held by the Secured Party
exceeds
(ii) the Credit Support Amount.
"CREDIT SUPPORT AMOUNT" means, unless otherwise specified in Paragraph 13, for
any Valuation Date (i) the Secured Party's Exposure for that Valuation Date plus
(ii) the aggregate of all Independent Amounts applicable to the Pledgor, if any,
minus (iii) all Independent Amounts applicable to the Secured Party, if any,
minus (iv) the Pledgor's Threshold; provided, however, that the Credit Support
Amount will be deemed to be zero whenever the calculation of Credit Support
Amount yields a number less than zero.
PARAGRAPH 4. CONDITIONS PRECEDENT, TRANSFER TIMING, CALCULATIONS AND
SUBSTITUTIONS
(a) CONDITIONS PRECEDENT. Each Transfer obligation of the Pledgor under
Paragraphs 3 and 5 and of the Secured Party under Paragraphs 3, 4(d)(ii), 5 and
6(d) is subject to the conditions precedent that:
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(i) no Event of Default, Potential Event of Default or Specified
Condition has occurred and is continuing with respect to the other
party; and
(ii) no Early Termination Date for which any unsatisfied payment
obligations exist has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the other
party.
(b) TRANSFER TIMING. Subject to Paragraphs 4(a) and 5 and unless otherwise
specified, if a demand for the Transfer of Eligible Credit Support or Posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of the business on the next Local Business Day;
if a demand is made after the Notification Time, then the relevant Transfer will
be made not later than the close of business on the second Local Business Day
thereafter.
(c) CALCULATIONS. All calculations of Value and Exposure for purposes of
Paragraphs 3 and 6(d) will be made by the Valuation Agent as of the Valuation
Time. The Valuation Agent will notify each party (or the other party, if the
Valuation Agent is a party) of its calculations not later than the Notification
Time on the Local Business Day following the applicable Valuation Date (or in
the case of Paragraph 6(d), following the date of calculation).
(d) SUBSTITUTIONS.
(i) Unless otherwise specified in Paragraph 13, upon notice to
the Secured Party specifying the items of Posted Credit Support to be
exchanged, the Pledgor may, on any Local Business Day, Transfer to the
Secured Party substitute Eligible Credit Support (the "Substitute
Credit Support"); and
(ii) subject to Paragraph 4(a), the Secured Party will Transfer
to the Pledgor the items of Posted Credit Support specified by the
Pledgor in its notice not later than the Local Business Day following
the date on which the Secured Party receives the Substitute Credit
Support, unless otherwise specified in Paragraph 13 (the "Substitution
Date"); provided that the Secured Party will only be obligated to
Transfer Posted Credit Support with a Value as of the date of Transfer
of that Posted Credit Support equal to the Value as of that date of
the Substitute Credit Support.
PARAGRAPH 5. DISPUTE RESOLUTION
If a party (a "Disputing Party") disputes (I) the Valuation Agent's calculation
of a Delivery Amount or a Return Amount or (II) the Value of any Transfer of
Eligible Credit Support or Posted Credit Support, then (1) the Disputing Party
will notify the other party and the Valuation Agent (if the Valuation Agent is
not the other party) not later than the close of business on the Local Business
Day following (X) the date that the demand is made under Paragraph 3 in the case
of (I) above or (Y) the date of Transfer in the case of (II) above, (2) subject
to Paragraph 4(a), the appropriate party will Transfer the undisputed amount to
the other party not later than the close of business on the Local Business Day
following (X) the date that the demand is made under Paragraph 3 in the case of
(I) above or (Y) the date of Transfer in the case of (II) above,
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(3) the parties will consult with each other in an attempt to resolve the
dispute and (4) if they fail to resolve the dispute by the Resolution Time,
then:
(i) In the case of a dispute involving a Delivery Amount or
Return Amount, unless otherwise specified in Paragraph 13, the
Valuation Agent will recalculate the Exposure and the Value as of the
Recalculation Date by:
(A) utilizing any calculations of Exposure for the
Transactions (or Swap Transactions) that the parties have agreed are
not in dispute;
(B) calculating the Exposure for the Transactions (or
Swap Transactions) in dispute by seeking four actual quotations at
mid-market from Reference Market-makers for purposes of calculating
Market Quotation, and taking the arithmetic average of those obtained;
provided that if four quotations are not available for a particular
Transaction (or Swap Transaction), then fewer than four quotations may
be used for that Transaction (or Swap Transaction); and if no
quotations are available for a particular Transaction (or Swap
Transaction), then the Valuation Agent's original calculations will be
used for that Transaction (or Swap Transaction); and
(C) utilizing the procedures specified in Paragraph 13
for calculating the Value, if disputed, of Posted Credit Support.
(ii) In the case of a dispute involving the Value of any Transfer
of Eligible Credit Support or Posted Credit Support, the Valuation
Agent will recalculate the Value as of the date of Transfer pursuant
to Paragraph 13.
Following a recalculation pursuant to this Paragraph, the Valuation Agent will
notify each party (or the other party, if the Valuation Agent is a party) not
later than the Notification Time on the Local Business Day following the
Resolution Time. The appropriate party will, upon demand following that notice
by the Valuation Agent or a resolution pursuant to (3) above and subject to
Paragraphs 4(a) and 4(b), make the appropriate Transfer.
PARAGRAPH 6. HOLDING AND USING POSTED COLLATERAL
(a) CARE OF POSTED COLLATERAL. Without limiting the Secured Party's rights
under Paragraph 6(c), the Secured Party will exercise reasonable care to assure
the safe custody of all Posted Collateral to the extent required by applicable
law, and in any event the Secured Party will be deemed to have exercised
reasonable care if it exercises at least the same degree of care as it would
exercise with respect to its own property. Except as specified in the preceding
sentence, the Secured Party will have no duty with respect to Posted Collateral,
including, without limitation, any duty to collect any Distributions, or enforce
or preserve any rights pertaining thereto.
(b) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS.
(i) GENERAL. Subject to the satisfaction of any conditions specified
in Paragraph 13 for holding Posted Collateral, the Secured Party will
be entitled to
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hold Posted Collateral or to appoint an agent (a "Custodian") to
hold Posted Collateral for the Secured Party. Upon notice by the
Secured Party to the Pledgor of the appointment of a Custodian,
the Pledgor's obligations to make any Transfer will be discharged
by making the Transfer to that Custodian. The holding of Posted
Collateral by a Custodian will be deemed to be the holding of
that Posted Collateral by the Secured Party for which the
Custodian is acting.
(ii) FAILURE TO SATISFY CONDITIONS. If the Secured Party or
its Custodian fails to satisfy any conditions for holding Posted
Collateral, then upon a demand made by the Pledgor, the Secured
Party will, not later than five Local Business Days after the
demand, Transfer or cause its Custodian to Transfer all Posted
Collateral held by it to a Custodian that satisfies those
conditions or to the Secured Party if it satisfies those
conditions.
(iii) LIABILITY. The Secured Party will be liable for the acts
or omissions of its Custodian to the same extent that the Secured
Party would be liable hereunder for its own acts or omissions.
(c) USE OF POSTED COLLATERAL. Unless otherwise specified in
Paragraph 13 and without limiting the rights and obligations of the parties
under Paragraph 3, 4(d)(ii), 5, 6(d) and 8, if the Secured Party is not a
Defaulting Party or an Affected Party with respect to a Specified Condition and
no Early Termination Date has occurred or been designated as the result of an
Event of Default or Specified Condition with respect to the Secured Party, then
the Secured Party will, notwithstanding Section 9-207 of the New York Uniform
Commercial Code, have the right to:
(i) sell, pledge, rehypothecate, assign, invest, use,
commingle or otherwise dispose of, or otherwise use in its
business any Posted Collateral it holds, free from any claim or
right of any nature whatsoever of the Pledgor, including any
equity or right of redemption by the Pledgor, and
(ii) register any Posted Collateral in the name of the Secured
Party, its Custodian or a nominee for either.
For purposes of the obligation to Transfer Eligible Credit Support or Posted
Credit Support pursuant to Paragraph 3 and 5 and any rights or remedies
authorized under this Agreement, the Secured Party will be deemed to continue to
hold all Posted Collateral and to receive Distributions made thereon, regardless
of whether the Secured Party has exercised any rights with respect to any
Posted Collateral pursuant to (i) or (ii) above.
(d) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) DISTRIBUTIONS. Subject to Paragraph 4(a), if the Secured
Party receives or is deemed to receive Distributions on a Local
Business Day, it will Transfer to the Pledgor not later than the
following Local Business Day any Distributions it receives or is
deemed to receive to the extent that a Delivery Amount would not
be created or increased by that Transfer, as calculated by the
Valuation Agent
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(and the date of calculation will be deemed to be a Valuation
Date for this purpose).
(ii) INTEREST AMOUNT. Unless otherwise specified in Paragraph 13
and subject to Paragraph 4(a), in lieu of any interest, dividends
or other amounts paid or deemed to have been paid with respect to
Posted Collateral in the form of Cash (all of which may be
retained by the Secured Party), the Secured Party will Transfer
to the Pledgor at the times specified in Paragraph 13 the
Interest Amount to the extent that a Delivery Amount would not be
created or increased by that Transfer, as calculated by the
Valuation Agent (and the date of calculation will be deemed to be
a Valuation Date for this purpose). The Interest Amount or
portion thereof not Transferred pursuant to this Paragraph will
constitute Posted Collateral in the form of Cash and will be
subject to the security interest granted under Paragraph 2.
PARAGRAPH 7. EVENTS OF DEFAULT
For purposes of Section 5(a)(iii)(1) of this Agreement, an Event of Default will
exist with respect to a party if:
(i) that party fails (or fails to cause its Custodian) to
make, when due, any Transfer of Eligible Collateral, Posted
Collateral or the Interest Amount, as applicable, required to be
made by it and that failure continues for two Local Business Days
after notice of that failure is given to that party;
(ii) that party fails to comply with any restriction or
prohibition specified in this Annex with respect to any of the
rights specified in Paragraph 6(c) and that failure continues for
five Local Business Days after notice of that failure is given to
that party; or
(iii) that party fails to comply with or perform any agreement
or obligation other than those specified in Paragraphs 7(i) and
7(ii) and that failure continues for 30 days after notice of that
failure is given to that party.
PARAGRAPH 8. CERTAIN RIGHTS AND REMEDIES
(a) SECURED PARTY'S RIGHTS AND REMEDIES. If at any time (1) an Event
of Default or Specified Condition with respect to the Pledgor has occurred and
is continuing or (2) an Early Termination Date has occurred or been designated
as the result of an Event of Default or Specified Condition with respect to the
Pledgor, then, unless the Pledgor has paid in full all of its Obligations that
are then due, the Secured Party may exercise one or more of the following rights
and remedies:
(i) all rights and remedies available to a secured party under
applicable law with respect to Posted Collateral held by the
Secured Party;
(ii) any other rights and remedies available to the Secured
Party under the terms of Other Posted Support, if any;
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(iii) the right to Set-off any amounts payable by the Pledgor with
respect to any Obligations against any Posted Collateral or the Cash
equivalent of any Posted Collateral held by the Secured Party (or any
obligation of the Secured Party to Transfer that Posted Collateral);
and
(iv) the right to liquidate any Posted Collateral held by the
Secured Party through one or more public or private sales or other
dispositions with such notice, if any, as may be required under
applicable law, free from any claim or right of any nature whatsoever
of the Pledgor, including any equity or right of redemption by the
Pledgor (with the Secured Party having the right to purchase any or
all of the Posted Collateral to be sold) and to apply the proceeds (or
the Cash equivalent thereof) from the liquidation of the Posted
Collateral to any amounts payable by the Pledgor with respect to any
Obligations in that order as the Secured Party may elect.
Each party acknowledges and agrees that Posted Collateral in the form of
securities may decline speedily in value and is of a type customarily sold on a
recognized market, and, accordingly, the Pledgor is not entitled to prior notice
of any sale of that Posted Collateral by the Secured Party, except any notice
that is required under applicable law and cannot be waived.
(b) PLEDGOR'S RIGHTS AND REMEDIES. If at any time an Early Termination
Date has occurred or been designated as the result of an Event of Default or
Specified Condition with respect to the Secured Party, then (except in the case
of an Early Termination Date relating to less than all Transactions (or Swap
Transactions) where the Secured Party has paid in full all of its obligations
that are then due under Section 6(e) of this Agreement):
(i) the Pledgor may exercise all rights and remedies available
to a pledgor under applicable law with respect to Posted Collateral
held by the Secured Party;
(ii) the Pledgor may exercise any other rights and remedies
available to the Pledgor under the terms of Other Posted Support, if
any;
(iii) the Secured Party will be obligated immediately to Transfer
all Posted Collateral and the Interest Amount to the Pledgor; and
(iv) to the extent that Posted Collateral or the Interest Amount
is not so Transferred pursuant to (iii) above, the Pledgor may:
(A) Set-off any amounts payable by the Pledgor with respect
to any Obligations against any Posted Collateral or the Cash
equivalent of any Posted Collateral held by the Secured Party (or any
obligation of the Secured Party to Transfer that Posted Collateral);
and
(B) to the extent that the Pledgor does not Set-off under
(iv)(A) above, withhold payment of any remaining amounts payable by
the Pledgor with respect to any Obligations, up to the Value of any
remaining Posted Collateral held by the Secured Party, until that
Posted Collateral is Transferred to the Pledgor.
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(c) DEFICIENCIES AND EXCESS PROCEEDS. The Secured Party will Transfer to
the Pledgor any proceeds and Posted Credit Support remaining after liquidation,
Set-off and/or application under Paragraphs 8(a) and 8(b) after satisfaction in
full of all amounts payable by the Pledgor with respect to any Obligations; the
Pledgor in all events will remain liable for any amounts remaining unpaid after
any liquidation, Set-off and/or application under Paragraphs 8(a) and 8(b).
(d) FINAL RETURNS. When no amounts are or thereafter may become payable
by the Pledgor with respect to any Obligations (except for any potential
liability under Section 2(d) of this Agreement), the Secured Party will Transfer
to the Pledgor all Posted Credit Support and the Interest Amount, if any.
PARAGRAPH 9. REPRESENTATIONS
Each party represents to the other party (which representations will be deemed
to be repeated as of each date on which it, as the Pledgor, Transfers Eligible
Collateral) that:
(i) it has the power to grant a security interest in and lien on
any Eligible Collateral it Transfers as the Pledgor and has taken all
necessary actions to authorize the granting of that security interest
and lien;
(ii) it is the sole owner of or otherwise has the right to Transfer
all Eligible Collateral it Transfers to the Secured Party hereunder,
free and clear of any security interest, lien, encumbrance or other
restrictions other than the security interest and lien granted under
Paragraph 2;
(iii) upon the Transfer of any Eligible Collateral to the Secured
Party under the terms of this Annex, the Secured Party will have a
valid and perfected first priority security interest therein (assuming
that any central clearing corporation or any third-party financial
intermediary or other entity not within the control of the Pledgor
involved in the Transfer of that Eligible Collateral gives the notices
and takes the action required of it under applicable law for
perfection of that interest); and
(iv) the performance by it of its obligations under this Annex will
not result in the creation of any security interest, lien or other
encumbrance on any Posted Collateral other than the security interest
and lien granted under Paragraph 2.
PARAGRAPH 10. EXPENSES
(a) GENERAL. Except as otherwise provided in Paragraphs 10(b) and 10(c),
each party will pay its own costs and expenses in connection with performing its
obligations under this Annex and neither party will be liable for any costs and
expenses incurred by the other party in connection herewith.
(b) POSTED CREDIT SUPPORT. The Pledgor will promptly pay when due all
taxes, assessments or charges of any nature that are imposed with respect to
Posted Credit Support held by the Secured Party upon becoming aware of the same,
regardless of whether any portion of
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that Posted Credit Support is subsequently disposed of under Paragraph 6(c),
except for those taxes, assessments and charges that results from the exercise
of the Secured Party's rights under Paragraph 6(c).
(c) LIQUIDATION/APPLICATION OF POSTED CREDIT SUPPORT. All reasonable costs
and expenses incurred by or on behalf of the Secured Party or the Pledgor in
connection with the liquidation and/or application of any Posted Credit Support
under Paragraph 8 will be payable, on demand and pursuant to the Expenses
Section of this Agreement, by the Defaulting Party or, if there is no
Defaulting Party, equally by the parties.
PARAGRAPH 11. MISCELLANEOUS
(a) DEFAULT INTEREST. A Secured Party that fails to make, when due, any
Transfer of Posted Collateral or the Interest Amount will be obligated to pay
the Pledgor (to the extent permitted under applicable law) an amount equal to
interest at the Default Rate multiplied by the Value of the items of property
that were required to be Transferred, from (and including) the date that Posted
Collateral or Interest Amount was required to be Transferred to (but excluding)
the date of Transfer of that Posted Collateral or Interest Amount. This interest
will be calculated on the basis of daily compounding and the actual number of
days elapsed.
(b) FURTHER ASSURANCES. Promptly following a demand made by a party, the
other party will execute, deliver, file and record any financing statement,
specific assignment or other document and take any other action that may be
necessary or desirable and reasonably requested by that party to create,
preserve, perfect or validate any security interest or lien granted under
Paragraph 2, to enable that party to exercise or enforce its rights under this
Annex with respect to Posted Credit Support or an Interest Amount or to effect
or document a release of a security interest on Posted Collateral or an Interest
Amount.
(c) FURTHER PROTECTION. The Pledgor will promptly give notice to the
Secured Party of, and defend against, any suit, action, proceeding or lien that
involves Posted Credit Support Transferred by the Pledgor or that could
adversely affect the security interest and lien granted by it under Paragraph 2,
unless that suit, action, proceeding or lien results from the exercise of the
Secured Party's rights under Paragraph 6(c).
(d) GOOD FAITH AND COMMERCIALLY REASONABLE MANNER. Performance of all
obligations under this Annex, including, but not limited to, all calculations,
valuations and determinations made by either party, will be made in good faith
and in a commercially reasonable manner.
(e) DEMANDS AND NOTICES. All demands and notices made by a party under
this Annex will be made as specified in the Notices Section of this Agreement,
except as otherwise provided in Paragraph 13.
(f) SPECIFICATIONS OF CERTAIN MATTERS. Anything referred to in this Annex
as being specified in Paragraph 13 also may be specified in one or more
Confirmations or other documents and this Annex will be construed accordingly.
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PARAGRAPH 12. DEFINITIONS
As used in this Annex:--
"CASH" means the lawful currency of the United States of America.
"CREDIT SUPPORT AMOUNT" has the meaning specified in Paragraph 3.
"CUSTODIAN" has the meaning specified in Paragraphs 6(b)(i) and 13.
"DELIVERY AMOUNT" has the meaning specified in Paragraph 3(a).
"DISPUTING PARTY" has the meaning specified in Paragraph 5.
"DISTRIBUTIONS" means with respect to Posted Collateral other than Cash, all
principal, interest and other payments and distributions of cash or other
property with respect thereto, regardless of whether the Secured Party has
disposed of that Posted Collateral under Paragraph 6(c). Distributions will not
include any item of property acquired by the Secured Party upon any disposition
or liquidation of Posted Collateral or, with respect to any Posted Collateral in
the form of Cash, any distributions on that collateral, unless otherwise
specified herein.
"ELIGIBLE COLLATERAL" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"ELIGIBLE CREDIT SUPPORT" means Eligible Collateral and Other Eligible Support.
"EXPOSURE" means for any Valuation Date or other date for which Exposure is
calculated and subject to Paragraph 5 in the case of a dispute, the amount, if
any, that would be payable to a party that is the Secured Party by the other
party (expressed as a positive number) or by a party that is the Secured Party
to the other party (expressed as a negative number) pursuant to Section
6(e)(ii)(2)(A) of this Agreement as if all Transactions (or Swap Transactions)
were being terminated as of the relevant Valuation Time; provided that Market
Quotation will be determined by the Valuation Agent using its estimates at mid-
market of the amounts that would be paid for Replacement Transactions (as that
terms is defined in the definition of "Market Quotation").
"INDEPENDENT AMOUNT" means, with respect to a party, the amount specified as
such for that party in Paragraph 13; if no amount is specified, zero.
"INTEREST AMOUNT" means, with respect to an Interest Period, the aggregate sum
of the amounts of interest calculated for each day in that Interest Period on
the principal amount of Posted Collateral in the form of Cash held by the
Secured Party on that day, determined by the Secured Party for each such day as
follows:
(x) the amount of that Cash on that day; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360
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"INTEREST PERIOD" means the period from (and including) the last Local Business
Day on which an Interest Amount was Transferred (or, if no Interest Amount has
yet been Transferred, the Local Business Day on which Posted Collateral in the
form of Cash was Transferred to or received by the Secured Party) to (but
excluding) the Local Business Day on which the current Interest Amount is to be
Transferred.
"INTEREST RATE" means the rate specified in Paragraph 13.
"LOCAL BUSINESS DAY", unless otherwise specified in Paragraph 13, has the
meaning specified in the Definitions Section of this Agreement, except that
references to a payment in clause (b) thereof will be deemed to include a
Transfer under this Annex.
"MINIMUM TRANSFER AMOUNT" means, with respect to a party, the amount specified
as such for that party in Paragraph 13; if no amount is specified, zero.
"NOTIFICATION TIME" has the meaning specified in Paragraph 13.
"OBLIGATIONS" means, with respect to a party, all present and future obligations
of that party under this Agreement and any additional obligations specified for
that party in Paragraph 13.
"OTHER ELIGIBLE SUPPORT" means, with respect to a party, the items, if any,
specified as such for that party in Paragraph 13.
"OTHER POSTED SUPPORT" means all Other Eligible Support Transferred to the
Secured Party that remains in effect for the benefit of that Secured Party.
"PLEDGOR" means either party, when that party (i) receives a demand for or is
required to Transfer Eligible Credit Support under Paragraph 3(a) or (ii) has
Transferred Eligible Credit Support under Paragraph 3(a).
"POSTED COLLATERAL" means all Eligible Collateral, other property,
Distributions, and all proceeds thereof that have been Transferred to or
received by the Secured Party under this Annex and not Transferred to the
Pledgor pursuant to Paragraph 3(b), 4(d)(ii) or 6(d)(i) or release by the
Secured Party under Paragraph 8. Any interest Amount or portion thereof not
Transferred pursuant to Paragraph 6(d)(ii) will constitute Posted Collateral in
the form of Cash.
"POSTED CREDIT SUPPORT" means Posted Collateral and Other Posted Support.
"RECALCULATION DATE" means the Valuation Date that gives rise to the dispute
under Paragraph 5; provided, however, that if a subsequent Valuation Date occurs
under Paragraph 3 prior to the resolution of the dispute, then the
"Recalculation Date" means the most recent Valuation Date under Paragraph 3.
"RESOLUTION TIME" has the meaning specified in Paragraph 13.
"RETURN AMOUNT" has the meaning specified in Paragraph 3(b).
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"SECURED PARTY" means either party, when that party (i) makes a demand for or is
entitled to received Eligible Credit Support under Paragraph 3(a) or (ii) holds
or is deemed to hold Posted Credit Support.
"SPECIFIED CONDITION" means, with respect to a party, any event specified as
such for that party in Paragraph 13.
"SUBSTITUTE CREDIT SUPPORT" has the meaning specified in Paragraph 4(d)(i).
"SUBSTITUTION DATE" has the meaning specified in Paragraph 4(d)(ii).
"THRESHOLD" means, with respect to a party, the amount specified as such for
that party in Paragraph 13; if no amount is specified, zero.
"TRANSFER" means, with respect to any Eligible Credit Support, Posted Credit
Support or Interest Amount, and in accordance with the instructions of the
Secured Party, Pledgor or Custodian, as applicable:
(i) in the case of Cash, payment or delivery by wire transfer into
one or more bank accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid or
delivered by book-entry, payment or delivery in appropriate physical
form to the recipient or its account accompanied by any duly executed
instruments of transfer, assignments in blank, transfer tax stamps and
any other documents necessary to constitute a legally valid transfer
to the recipient;
(iii) in the case of securities that can be paid or delivered by
book-entry, the giving of written instructions to the relevant
depository institution or other entity specified by the recipient,
together with a written copy thereof to the recipient, sufficient if
complied with to result in a legally effective transfer of the
relevant interest to the recipient, and
(iv) in the case of Other Eligible Support or Other Posted Support,
as specified in Paragraph 13.
"VALUATION AGENT" has the meaning specified in Paragraph 13.
"VALUATION DATE" means each date specified in or otherwise determined pursuant
to Paragraph 13.
"VALUATION PERCENTAGE" means, for any item of Eligible Collateral, the
percentage specified in Paragraph 13.
"VALUATION TIME" has the meaning specified in Paragraph 13.
"VALUE" means for any Valuation Date or other date for which Value is calculated
and subject to Paragraph 5 in the case of a dispute, with respect to;
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(i) Eligible Collateral or Posted Collateral that is:
(A) Cash, the amount thereof; and
(B) a security, the bid price obtained by the Valuation Agent
multiplied by the applicable Valuation Percentage, if any;
(ii) Posted Collateral that consists of items that are not specified
as Eligible Collateral, zero; and
(iii) Other Eligible Support and Other Posted Support, as specified
in Paragraph 13.
PARAGRAPH 13. ELECTIONS AND VARIABLES
(a) SECURITY INTEREST FOR "OBLIGATIONS". The term "Obligations" as
used in this Annex included the following additional obligations:
With respect to Party A: None____________________________________
With respect to Party B: None____________________________________
(b) CREDIT SUPPORT OBLIGATIONS.
(i) DELIVERY AMOUNT, RETURN AMOUNT AND CREDIT SUPPORT AMOUNT.
(A) "DELIVERY AMOUNT" has the meaning specified in
Paragraph 3(a), unless otherwise specified here: ________________
(B) "RETURN AMOUNT" has the meaning specified in Paragraph
3(b), unless otherwise specified here: __________________________
(C) "CREDIT SUPPORT AMOUNT" has the meaning specified in
Paragraph 3, unless otherwise specified here: ___________________
(ii) ELIGIBLE COLLATERAL. The following items will qualify as
"ELIGIBLE" COLLATERAL for the party specified:
PARTY A PARTY B VALUATION
PERCENTAGE
(A) Cash [_] [X] [_]% 100%
(B) negotiable debt obligations issued [_] [X] [_]% 100%
by the U.S. Treasury Department
having an original maturity
at issuance of not more than one
year ("Treasury Bills")
(C) negotiable debt obligations issued [_] [X] [_]% 99%
by the U.S. Treasury Department
having an original
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maturity at issuance of more than one year but
not more than 10 years ("Treasury Notes")
(D) negotiable debt obligations issued by the U.S. [_] [X] [_]% 98%
Treasury Department having an original
maturity at issuance of more than 10 years
("Treasury Bonds")
(E) other: U.S. dollar denominated certificates of [_] [X] [_]% 97%
deposit with a maturity date of one year or
less issued by a U.S. financial institution
whose deposits are insured by the FDIC and
which has a long-term unsecured debt rating of
at least A by both Standard & Poor's
Corporation and Xxxxx'x Investors Service Inc.
(iii) OTHER ELIGIBLE SUPPORT. The following items qualify as
"OTHER ELIGIBLE SUPPORT" for the party specified:
PARTY A PARTY B
(A) _____________________________________ [_] [_]
(B) _____________________________________ [_] [_]
(iv) THRESHOLDS.
(A) "INDEPENDENT AMOUNT" means with respect to Party A: $NONE________________
"INDEPENDENT AMOUNT" means with respect to Party B: $ the meaning, if any,
specified in the
Confirmation
(B) "THRESHOLD" means with respect to Party A: $0___________________
"THRESHOLD" means with respect to Party B: $0___________________
(C) "MINIMUM TRANSFER AMOUNT" means with respect to $100,000_____________
Party A:
"MINIMUM TRANSFER AMOUNT" means with respect to $ 20,000_____________
Party B:
(D) ROUNDING. The Delivery Amount and the Return Amount will be rounded up and
down to the nearest integral multiple of $1,000, respectively.
(c) VALUATION AND TIMING.
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(i) "VALUATION AGENT" means, for purposes of Paragraphs 3 and 5,
the party making the demand under Paragraph 3, and, for purposes of
Paragraph 6(d), the Secured Party receiving or deemed to receive the
Distributions or the Interest Amount, as applicable, unless otherwise
specified here:
(ii) "VALUATION DATE" means: Unless otherwise specified in the
Confirmation, every day that is a Business Day in New York.
(iii) "VALUATION TIME" means:
[_] the close of business in the city of the Valuation
Agent on the Valuation Date or date of calculation, as
applicable;
[_] the close of business on the Local Business Day before
the Valuation Date or date of calculation, as
applicable;
provided that the calculations of value and Exposure will be made as
of approximately the same time on the same date.
(iv) "NOTIFICATION TIME" means 1:00 p.m., New York time, on a Local
Business Day, unless otherwise specified here:........................
(d) CONDITIONS PRECEDENT AND SECURED PARTY'S RIGHTS AND REMEDIES. The
following Termination Event will be a "SPECIFIED CONDITION" for the party
specified (that party being the Affected Party if the Termination Event occurs
with respect to that party):
Illegality PARTY A PARTY B
Tax Event [X] [X]
Tax Event Upon Merger [X] [X]
Credit Event Upon Merger [X] [X]
Additional Termination Event(s):/1/ [X] [X]
................................... [_] [_]
................................... [_] [_]
(e) SUBSTITUTION
(i) "SUBSTITUTION DATE" has the meaning specified in Paragraph
4(d)(ii), unless otherwise specified here:
______________________________
/1/If the parties elect to designate an Additional Termination Event as a
"Specified Condition", then they should only designate one or more Additional
Termination Events that are designated as such in their Schedule.
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(ii) CONSENT. The Pledgor must obtain the Secured Party's consent
which consent shall not be unreasonably withheld to any substitution
pursuant to Paragraph 4(d) except that the Pledgor may substitute cash
for any publicly traded shares without the Secured Party's consent./2/
(f) DISPUTE RESOLUTION.
(i) "RESOLUTION TIME" means 1:00 p.m., New York time, on the Local
Business Day following the date on which the notice is given that
gives rise to a dispute under Paragraph 5, unless otherwise specified
here:_____________________________________
(ii) VALUE. For the purpose of Paragraphs 5(i)(C) and 5(ii), the Value
of Posted Credit Support will be calculated as follows:_______________
(iii) ALTERNATIVE. The provisions of Paragraph 5 will apply, unless
an alternative dispute resolution procedure is specified here:
__________________________________________
(g) HOLDING AND USING POSTED COLLATERAL
(i) ELIGIBILITY TO HOLD POSTED COLLATERAL; CUSTODIANS. Party A and
its Custodian will be entitled to hold Posted Collateral pursuant to
Paragraph 6(b); provided that the following conditions applicable to
it are satisfied;
(1) Party A is not a Defaulting Party.
(2) Posted Collateral may be held only in the following
jurisdictions
(3) _________________________________________________________
Initially, the CUSTODIAN for Party A is Xxxxx Brothers Xxxxxxxx
& Co.
Party B and its Custodian will be entitled to hold Posted Collateral
pursuant to Paragraph 6(b); provided that the following conditions
applicable to it are satisfied:
(1) Party B is not a Defaulting Party__________________________
(2) Posted Collateral may be held only in the following
jurisdictions:__________________________________________________
(3) ___________________________________________________________
Initially, the Custodian for Party B is
________________________
/2/ Parties should consider selecting "applicable" where substitution without
consent could give rise to a registration requirement to perfect properly the
security interest in Posted Collateral (e.g., where a party to the Annex is the
New York branch of an English bank).
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(ii) USE OF POSTED COLLATERAL. The provisions of Paragraph 6(c)
will not apply to the party specified here:
[X] Party A
[_] Party B
and [that party/those parties/3/] will not be permitted to:
(h) DISTRIBUTIONS AND INTEREST AMOUNT.
(i) INTEREST RATE. The "INTEREST RATE" will be: 0.0% _______________
(ii) TRANSFER OF INTEREST AMOUNT. The Transfer of the Interest Amount
will be made on the last Local Business Day of each calendar month and
on any Local Business Day that Posted Collateral in the form of Cash
is Transferred to the Pledgor pursuant to Paragraph 3(b), unless
otherwise specified here:_____________________________________________
(iii) ALTERNATIVE TO INTEREST AMOUNT. The provisions of Paragraph 6(d)
(ii) will apply, unless otherwise specified here: ____________________
(i) ADDITIONAL REPRESENTATION(S). [Party A/Party B/4/] represents to the
other party (which representation(s) will be deemed to be repeated as of each
date on which it, as the Pledgor, Transfers Eligible Collateral) that:
(i) _______________________________________________________________
(ii) _______________________________________________________________
(j) OTHER ELIGIBLE SUPPORT AND OTHER POSTED SUPPORT.
(i) "VALUE" with respect to Other Eligible Support and Other Posted
Support means:________________________________________________________
(ii) "TRANSFER" with respect to Other Eligible Support and Other
Posted Support means:_________________________________________________
(k) DEMAND AND NOTICES. All demands, specifications and notices under
this Annex will be made pursuant to the Notices Section of this Agreement,
unless otherwise specified here:
Party A: BankBoston, N.A., 000 Xxxxxxx Xxxxxx, Xxxxxx, XX 02110_______
___________________________
/3/ Delete as applicable.
/4/ Delete as applicable.
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Party B: CMGI, Inc., 000 Xxxxxxxxxx Xxxxxx, Xxxxxx Xxxxx, Xxxxxxx, XX
00000
(l) ADDRESSES FOR TRANSFERS.
Party A: To be advised________________________________________________
Party B: To be advised________________________________________________
(m) OTHER PROVISIONS.
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