(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
..........................................................
May 12,1998
dated as of ...........................
between
BankBoston, N.A. and American Skiing Company
("Party A") ("Party B")
This Annex supplements, form 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 I. 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
with 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 will 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 amont 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:
(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 supply, or posted
Credit Support is made by the Notification Time, then the relevant Transfer will
be made not later than the close of 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 (1) 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 (.U) 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
(1) above Or (Y) the date of Transfer in the case of (II) above, (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 Posted Collateral Without limiting the Secured Parties 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 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 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 Paragraphs 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 paragraphs 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 2 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 (and the date of
calculation will be deemed to be a Valuation Date for this purpose).
(iii) 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 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-,
(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 thereto 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 Transaction (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.
(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 g(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 will 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 term 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 becoming aware of the same, regardless
of whether any portion of that Posted Credit Support is subsequently disposed of
under Paragraph 6(c), except for those taxes, assessments and charges that
result 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 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 Commercally.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.
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(c)(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 term 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; multiplied by
(y) the Interest Rate in effect for that day; divided by
(z) 360.
"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)(E) or 6(d)(i) or released 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).
'Secured Party' means either party, when that Party (i) makes a demand for or is
entitled to receive Eligible Credit Support under Paragraph 3(a) or (ii) ▇▇▇▇▇
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 into one or more bank
accounts specified by the recipient;
(ii) in the case of certificated securities that cannot be paid OT 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 bookentry, 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. "Valulation 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:
(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 to the ISDA Credit Support Annex
BankBoston, N.A. and American Skiing Company
("Party A") ("Party B")
Paragraph 13. Elections and Variables
(a) Security Interest for "Obligations". The term "Obligations" as used
in this Annex means all present and future obligations under this
Agreement or any other contractual arrangement between the Pledgorand
the Secured Party or between the Pledgor and any Affiliate of the
Secured Party.
(b) Credit Support Obligations.
(i) Delivery Amount, Return Amount and Credit Support Amount.
(A) "Delivery Amount" has the meaning specified in Paragraph 3(a).
(B) "Return Amount" has the meaning specified in Paragraph 3(b).
(C) "Credit Support Amount" has the meaning specified in Paragraph 3.
(D) Addition to Paragraph 3. The following subparagraph (c) is hereby
added to Paragraph 3 of this Annex:
(c) No offset. On any Valuation Date, if (i) each party is required to make a
Transfer under Paragraph 3(a) or (ii) each party is required to make a Transfer
under Paragraph 3(b), then such obligations will not offset each other.
(ii) Eligible Collateral. The following items will qualify as "Eligible
Collateral" for Party B:
Valuation
Percentage
(A) Cash 100%
(B) negotiable debt obligations issued by the 98% U.S. Treasury Department
having an original maturity
at issuance of not more than one year ("Treasury Bills")
(C) negotiable debt obligations issued by the U.S. Treasury 95% Department
having an original maturity at issuance of more than one year but not more than
10 years ("Treasury Notes")
(D) negotiable debt obligations issued by the 95%
Department having an original
maturity at issuance of more than 10 years
("Treasury Bonds")
(E) Other:
(aa) Agency Securities regardless 95%
of original maturity at issuance
As used herein, "Agency Securities" means negotiable debt obligations
which are fully guaranteed as to both principal and interest by the Federal
National Mortgage Association, the Government National Mortgage Association or
the Federal Home Loan Mortgage Corporation, but shall exclude (i) interest only
and principal only securities and (ii) Collateralized Mortgage Obligations (i.e.
CMOs), Real Estate Mortgage Investment Conduits (i.e. REMICS) and similar
derivative securities.
(bb) Any other securities as may be acceptable to the Secured Party in its sole
discretion with such Valuation Percentage as determined by the Secured Party, in
its sole discretion, at the time such other securities are offered as Eligible
Credit Support by the Pledgor.
(iii) Other Eligible Support. Except as provided above, there shall be
no "Other Eligible Support" for purposes of this Annex.
(iv) Thresholds.
(A) "Independent Amount" means (i) with respect to Party A, zero and (ii) with
respect to Party B and any Transaction, the amount specified as such in the
relevant Confirmation.
(B) "Threshold" means $13,500,000.
(C) "Minimum Transfer Amount" means $ 100,000.
(D) Rounding. The Delivery Amount and the Return Amount will be rounded up and
down, respectively, to the nearest integral multiple of $ 10,000.
(c) Valuation and Timing.
(i) "Valuation Agent' means Party A.
(ii) "Valuation Date" means any Local Business Day.
(iii)"Valuation Time" means the close of business on the Local Business Day
immediately preceding 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 11:00 a.m., New York time, on a Local Business
Day.
(d) Conditions Precedent and Secured Party's Right and Remedies. The following
Termination Event(s) 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):
Party A Party B
Illegality [X] [X]
Credit Event Upon Merger [X] [X]
(e) Substitution.
(i) "Substitution Date" has the meaning specified in Paragraph 4(d)(ii).
(ii) Consent. Inapplicable; provided that the Pledgor may only request a
substitution if the amount of Posted Credit Support to be substituted for
exceeds the Minimum Transfer Amount applicable to the Pledgor.
(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.
(ii) Value- For the purpose of Paragraphs 5(i)(C) and 5(ii), the
Value of Posted Credit Support consisting of (x) Cash will be the face amount
thereof, and (y) securities will be calculated based on the bid quotations of
any generally recognized dealer in the relevant securities (which may include an
affiliate of Party A) and adding thereto any accrued interest (except to the
extent such accrued interest has been Transferred to a party pursuant to this
Annex or included in the applicable bid quotation), in each case (x) and (y),
multiplied by the applicable Valuation Percentage.
(iii) Alternative. The provisions of Paragraph 5 will apply.
(g) Holding and Using Posted Collateral.
(i) Eligibility to Hold Posted Collateral; Custodians. Party A will be
entitled to hold Posted Collateral pursuant to Paragraph 6(b) without
using a Custodian provided Party A is not a Defaulting Party.
(ii) Use of Posted Collateral The provisions of Paragraph 6(c) will
apply to both parties.
(h) Distributions and Interest Amount.
(i) Interest Rate. The "Interest Rate" for any day will be zero.
(ii) Transfer of interest Amount. The provisions of Paragraph 6(d)(ii) will not
apply.
(i) Additional Representation(s).
Not applicable.
Other Eligible Support and Other Posted Support.
(i) "Value" with respect to Other Eligible Support and Other Posted
Support shall not be applicable.
(ii) "Transfer' with respect to Other Eligible Support and Other Posted
Support shall not be applicable.
(k) Demands 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: ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ 021 1 0
Attention: Derivatives Operations - Collateral
(Mail Stop 01-12-02)
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Party B: Sunday ▇▇▇▇▇ ▇▇▇▇, ▇.▇. ▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇. ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, ▇▇. Vice President
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
(1) Other Provisions.
(i) Severability. Any provision of this Annex which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability, without invalidating the
remaining provisions hereof, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
(ii) Successors. This Annex and all obligations of the Pledgor hereunder
shall be binding upon the successors and assigns of the Pledgor and shall,
together with the rights and remedies of the Secured Party hereunder, inure to
the benefit of the Secured Party and its respective successors and assigns.
(iii)No Third Party Rights. This Annex has been and is made solely for the
benefit of Party A and Party B and their respective successors and assigns, and
no other person or entity shall acquire or have any right under or by virtue of
this Annex.
(iv) Local Business Day. Notwithstanding anything to the contrary contained
in this Annex or the Agreement, the term Local Business Day shall, in addition
to any other meaning specified herein, also include a day on which commercial
banks are open for business (including dealings in foreign exchange and foreign
currency deposits) in New York, New York and Boston, Massachusetts.
(v) Agreement as to Single Secured Party and Pledgor. Party A and Party B
agree that, notwithstanding anything to the contrary in the recital to this
Annex, Paragraph l(b) or in Paragraph 2 or the definitions in Paragraph 12, (A)
the term "Secured Party" as used in this Annex means only Party A, (B) the term
"Pledgor" as used in this Annex means only Party B, (C) only Party B makes the
pledge and grant in Paragraph 2, the acknowledgment in the final sentence of
Paragraph g(a) and the representations in Paragraph 9 and otherwise herein, and
(D) only Party B will be required to make Transfers of Eligible Credit Support
hereunder.
(vi) Liquidation of Equity Collateral.
(x) If the Secured Party wishes to sell any or all Posted Collateral
consisting of equity securities ("Equity Collateral") pursuant to Paragraph 8,
and determines, in its sole and absolute discretion, that it is necessary or
advisable to effect a public registration of all or any of such Equity
Collateral pursuant to the Securities Act of 1933, as amended (or any similar
statutes then in effect) (the "Act"), then Pledgor will, at its own expense:
(A) execute and deliver, and use its best efforts to cause each issuer of the
shares comprising such Equity Collateral (and such issuer's directors and
officers) to execute and deliver, all such instruments and documents, and do or
cause to be done all such other acts and things as may, in the reasonable
judgment of the Secured Party, be necessary or advisable to register the shares
comprising such Equity Collateral under the Act and to cause the related
registration statement to become effective and to remain effective for such
period as may be required by law, and to make all amendments thereto and/or to
the related prospectus that, in the reasonable judgment of the Secured Party,
are necessary or advisable, all in conformity with the Act and the rules and
regulations promulgated thereunder; and
(B) use its best efforts to (1) qualify such shares under, and cause each such
issuer to comply with, the provisions of the securities or "Blue Sky" laws of
any jurisdiction designated by the Secured Party and (2) cause each such issuer
to make available to its security holders, as soon as practicable, an earnings
statement that will satisfy the provisions of Section 11 (a) of the Act.
(y) Notwithstanding anything herein to the contrary, upon an Event of
Default by the Pledgor, the Secured Party may, in its sole and absolute
discretion (subject only to applicable requirements of law), sell all or any of
the Equity Collateral by private sale in such manner and under such
circumstances as the Secured- Party may deem necessary or advisable and
notwithstanding that a registration statement for all or any of such Equity
Collateral could be or shall have been filed under the Act. Without limitation
on the foregoing, the Secured Party may approach and negotiate with a single
possible purchaser to effect such sale and/or require that any such sale
(including one held by auction) be subject to restrictions as to (A) the
financial sophistication and ability of any person permitted to bid or purchase
at such sale, (B) the content of legends to be placed upon any certificates
representing the shares comprising the Equity Collateral sold in such sale,
including restrictions on future transfer thereof, (C) the representations to be
made by each person bidding or purchasing at such sale relating to that person's
access to financial information about the Pledgor, the issuer or the Secured
Party, and such person's intentions as to the holding of the shares comprising
the Equity Collateral so sold for investment, for its own account, and not with
a view to the distribution thereof, and (D) such other matters as the Secured
Party may deem necessary or advisable in order that such sale, notwithstanding
any failure so to register, may be effected in compliance with the Uniform
Commercial Code as in effect in any relevant jurisdiction and other laws
affecting the enforcement of creditors' rights, the Act and all applicable state
securities laws.
IN WITNESS WHEREOF, the parties hereto have executed this Annex on the
respective dates set forth below and with effect from the date of the Agreement
unless otherwise indicated in Paragraph 13(a).
BankBoston, N.A. American Skiing Company
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ By:/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Title: Managing Director Title: Chief Financial Officer
Approval (for BankBoston, N.A. internal purposes only):