Document:

Exhibit 10.80

 

SCHEDULE

 

to the

 

Master Agreement

 

dated as of November 20, 2003

 

between

 

 

	
  CREDIT
  SUISSE FIRST

  BOSTON INTERNATIONAL

  	
   

  	
  and

  	
   

  	
  PRICELINE.COM

  INCORPORATED

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  (“Party
  A”)

  	
   

  	
   

  	
   

  	
  (“Party
  B”)

  
							

 

 

Part 1

 

Termination
Provisions

 

In this Agreement:

 

(a)                                  “Specified
Entity” means “Affiliates”, in relation to Party A for the purpose of:

 

Section 5(a)(v), Applicable.

Section 5(a)(vi), Not Applicable.

Section 5(a)(vii), Not Applicable.

Section 5(b)(iv), Not Applicable.

 

in relation to Party B for the purpose of:

 

Section 5(a)(v), Applicable.

Section 5(a)(vi), Not Applicable.

Section 5(a)(vii), Not Applicable.

Section 5(b)(iv), Not Applicable.

 

(b)                                 “Specified
Transaction” will have the meaning specified in Section 14 of this
Agreement.

 

(c)                                  The
“Cross Default” provisions of Section 5(a)(vi), as amended herein, will apply
to Party A and to Party B.  Section
5(a)(vi) is hereby amended by deleting in the seventh line thereof the words “,
or becoming capable at such time of being declared,”.

 

If such provisions apply:

 

“Specified Indebtedness”, has the meaning specified in Section 14 of
this Agreement.

 

1

 

“Threshold Amount” means, in respect of Party A, the greater of (i) an
amount equal to three percent of Party A’s consolidated shareholders’ equity,
determined in accordance with generally accepted accounting principles in the
United States of America (“GAAP”), consistently applied, based on the most
recent consolidated financial statements of Party A and (ii) U.S.
$25,000,000; and in respect of Party B, the greater of (i) an amount equal to
three percent of Party B’s consolidated shareholders’ equity, determined in
accordance with generally accepted accounting principles in the United States
of America (“GAAP”), consistently applied, based on the most recent consolidated
financial statements of Party B and (ii) U.S. $10,000,000 .

 

(d) The “Credit Event Upon Merger” provisions of Section 5(b)(iv) will
apply to Party A and Party B; provided, however, that the phrase “materially
weaker” means (i) the senior long-term debt or deposits of the resulting,
surviving or transferee entity is or are, as the case may be, unrated by
Standard & Poor’s Corporation or Moody’s Investors Service, Inc., and the
Policies (as defined below) in effect at the time, of the party which is not
the Affected Party, would lead such non-Affected Party, solely as a result of a
change in the nature, character, identity or condition of the Affected Party,
from its state prior to such consolidation, amalgamation, merger or transfer,
to decline to make an extension of credit to, or enter into a Transaction with,
the resulting, surviving or transferee entity. 
“Policies”, for the purposes of this definition means written or
customary:  (1)(A) internal credit
limits applicable to individual entities or (B) other limits on doing business
with entities domiciled or doing business in jurisdictions or engaging in
certain activities, or (2) internal restrictions on doing business with
entities with whom the party which is not the Affected Party has had prior
adverse business relations.

 

(e)                                  Additional
Termination Events shall not apply.

 

(f)                                    The “Automatic
Early Termination” provision of Section 6(a) will apply to Party A and to Party
B.

 

(g)                                 Payments on Early
Termination.  For the purpose of
Section 6(e) of this Agreement the Second Method and Market Quotation will
apply.

 

(h)                                 “Termination Currency”
means United States Dollars.

 

Part 2

 

Tax
Representations

 

(a)                                  Payer
Representations.  For the purpose of
Section 3(e) of this Agreement, Party A will make the following
representation and Party B will make the following representation:

 

It is not required by any applicable law, as modified by the practice
of any relevant governmental revenue authority, of any Relevant Jurisdiction to
make any deduction or withholding for or on account of any Tax from any payment
(other than interest under Section 2(e), 6(d)(ii) or 6(e) of this
Agreement) to be made by it to the other party under this Agreement.  In making this representation, it may rely
on (i) the accuracy of any representations made by the

 

2

 

other party pursuant to Section 3(f) of this Agreement,
(ii) the satisfaction of the agreement contained in Section 4(a)(i)
or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any
document provided by the other party pursuant to Section 4(a)(i) or
4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of
the other party contained in Section 4(d) of this Agreement, provided
that it shall not be a breach of this representation where reliance is placed
on clause (ii) and the other party does not deliver a form or document under
Section 4(a)(iii) by reason of material prejudice of its legal or
commercial position.

 

(b)                                 Payee
Representations.  For the purposes of
Section 3(f), Party A and Party B make the representations
specified below, if any:

 

The following representations will apply to Party A:

 

(i)  Party A
represents that it is entering into each Transaction in the ordinary course of
its trade as, and is, a recognized U.K. bank as defined in Section 840A of the
U.K. Income and Corporation Taxes Act of 1988.

 

(ii)  Party A
is a “foreign person” within the meaning of Treas. Reg. section 1.6041-4(a)(4).

 

(iii)  Party A represents that,
with respect to each Transaction and with respect to any payment received or to
be received by Party A pursuant thereto, either (A) the entire amount of such
payment is, or is treated as, income effectively connected with the conduct of
a trade or business in Specified Jurisdiction B (“ECI”), (B) a portion of such
payment is, or is treated as, ECI and, with respect to the portion of such
payment which is not, or is not treated as, ECI, Party A is a resident of
Specified Jurisdiction A fully eligible for the benefits of the “Business
Profits” provision, the “Interest” provision or the “Other Income” provision of
the Specified Treaty with respect to such portion and such portion is not
attributable to a trade or business carried on by Party A through a permanent
establishment in Specified Jurisdiction B or (C) with respect to the entire
amount of such payment, Party A is a resident of Specified Jurisdiction A fully
eligible for the benefits of the “Business Profits” provision, the “Interest”
provision or the “Other Income” provision of the Specified Treaty with respect
to such payment and such payment is not attributable to a trade or business
carried on by Party A through a permanent establishment in Specified
Jurisdiction B.

 

(iv)  With
respect to each transaction, unless Party A advises Party B to the contrary at least
20 business days prior to the earliest date on which any Specified Jurisdiction
B tax return or report in respect of such Transaction is due, Party A shall be
deemed to have advised Party B, for Specified Jurisdiction B tax reporting
purposes, to treat the entire amount of all payments received by Party A in
connection with such Transaction as ECI.

 

For purposes of (iii) and (iv) above,

 

3

 

“Specified Jurisdiction A” means the United Kingdom
of Great Britain and Northern Ireland.

 

“Specified Jurisdiction B” means the United States
of America.

 

“Specified
Treaty” means the income tax treaty between Specified Jurisdiction A and
Specified Jurisdiction B, entered into force on March 31, 2003, upon the
exchange of Instruments of Ratification.

 

The following representation will apply to Party B:

 

Party B is a corporation created or organized in the United States
or under the laws of the United States or of any State or of the District of
Columbia and it is not a foreign person for United States federal income tax
purposes.

 

4

 

Part 3

 

Documents
to be delivered

 

For the purpose of Section 4(a):

 

(1)                                  Tax forms, documents,
or certificates to be delivered are:

 

	
  Party required

  to deliver

  document

  	
   

  	
  Form/Document/

  Certificate

  	
   

  	
  Date by
  which to

  be delivered

  	
   

  	
  Covered by
  Section

  3(d) Representation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A and Party B

  	
   

  	
  Any
  document required or reasonably requested to allow the other party to make
  payments under the Agreement without any deduction or withholding for or on
  the account of any Tax or with such deduction or withholding at a reduced
  rate

  	
   

  	
  (i)
  Before the first payment date under this Agreement, (ii) promptly upon
  reasonable demand by the other party, [and (iii) promptly upon learning that
  any such form previously provided has become obsolete or incorrect]

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A

  	
   

  	
  United
  States Internal Revenue Service Form [W-8 BEN] [W-8 ECI], or any successor
  form, duly completed and executed and in a form reasonably satisfactory to
  Party B

  	
   

  	
  (i)
  Before the first scheduled Payment Date with respect to each Transaction,
  (ii) promptly upon reasonable demand by Party B and (iii) promptly upon
  learning that any such form previously provided by Party A has become
  obsolete or incorrect

  	
   

  	
  Yes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  United
  States Internal Revenue Service Form W-9, or any successor form, duly
  completed and executed and in a form reasonably satisfactory to Party A

  	
   

  	
  (i)
  Before the first scheduled Payment Date with respect to each Transaction,
  (ii) promptly upon reasonable demand by Party A and (iii) promptly upon learning
  that any such form previously provided by Party B has become obsolete or
  incorrect

  	
   

  	
  Yes

  	
   

  

 

5

 

(2)                                  Other documents to be
delivered are:

 

	
  Party required

  to deliver

  document

  	
   

  	
  Form/Document/

  Certificate

  	
   

  	
  Date by
  which to

  be delivered

  	
   

  	
  Covered by
  Section 3(d) Representation

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A and B

  	
   

  	
  Certified
  copies of all corporate authorizations and any other documents with respect
  to the execution, delivery and performance of this Agreement

  	
   

  	
  Upon
  execution and delivery of this Agreement

  	
   

  	
  Yes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A and  Party B

  	
   

  	
  Certificate
  of Authority and specimen signatures of individuals executing this Agreement
  and Confirmations

  	
   

  	
  Upon
  execution and delivery of this Agreement and thereafter upon request of the
  other party

  	
   

  	
  Yes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  A

  	
   

  	
  Audited
  annual consolidated financial statements of Party A

  	
   

  	
  Upon
  Request

  	
   

  	
  Yes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  Audited
  annual consolidated Financial Statements of Party B

  	
   

  	
  Upon
  Request

  	
   

  	
  Yes

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Party
  B

  	
   

  	
  Unaudited
  quarterly consolidated Financial Statements of Party B

  	
   

  	
  Upon
  Request

  	
   

  	
  Yes

  	
   

  

 

Part 4

 

Miscellaneous

 

(a)                                  Address
for Notices:  For the purposes of
Section 12(a) of this Agreement:

 

Address for notices or communications to Party A:

 

Notwithstanding section 12 (a) of the Agreement all notices including
those to be given under Section 5 or 6 may be given by facsimile transmission
or electronic messaging system.

 

(i)             (1)                                  Address
for notices or communications to Party A:

 

6

 

	
  Address:

  	
   

  	
  One Cabot Square

  	
   

  	
   

  
	
   

  	
   

  	
  London E14 4QJ

  	
   

  	
   

  
	
   

  	
   

  	
  England

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Attention:

  	
   

  	
  (1)                                  Head
  of Credit Risk Management;

  	
   

  	
   

  
	
   

  	
   

  	
  (2)                                  Global
  Head of OTC Operations, Operations Department;

  	
   

  	
   

  
	
   

  	
   

  	
  (3)                                  General
  Counsel Europe - Legal and Compliance Department.

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Swift:

  	
   

  	
  Credit Suisse First Boston International CSFP GB2L

  	
   

  	
   

  

 

(2)                                  For the purpose of
facsimile notices or communications under this Agreement:

 

	
  Facsimile No.:

  	
   

  	
  +44 (0) 20 7888 2686

  
	
  Attention:

  	
  General Counsel Europe - Legal and Compliance Department

  
				

 

Telephone number for oral confirmation of receipt
of facsimile in legible form:     + 44
(0) 20 7888 4465

 

Designated responsible employee for the
purposes of Section 12(a)(iii):  Senior
Legal Secretary

 

	
  With a copy to:

  	
   

  	
  Facsimile No: +44 (0) 207 888 3715

  
	
   

  	
   

  	
  Head of Credit Risk Management

  

 

	
  With a copy to:

  	
   

  	
  Facsimile No: +44 (0) 207 888 9503

  
	
   

  	
   

  	
  Global Head of OTC Operations, Operations Department.

  

 

 

Address for notices or communications to Party B:

 

	
  Address:

  	
   

  	
  Priceline.com Incorporated

  
	
  Attention:

  	
   

  	
  Peter Millones

  
	
   

  	
   

  	
  Priceline.com

  
	
   

  	
   

  	
  Office of the General Counsel

  
	
   

  	
   

  	
  800 Connecticut Avenue

  
	
   

  	
   

  	
  Norwalk, Connecticut 06854

  
	
   

  	
   

  	
  Fax:
  (203) 299-8915

  

 

 

(For all purposes)

 

(b)                                 Process
Agent.  For the purpose of Section
13(c):

 

	
  Party A appoints as its Process Agent:

  	
   

  	
  Credit Suisse First Boston LLC,

  
	
   

  	
   

  	
  One Madison Avenue, New York, NY 10010 (Attention:

  
	
   

  	
   

  	
  General Counsel, Legal and Compliance Department)

  

 

7

 

Party B appoints as its Process Agent:     Not
Applicable

 

(c)                                  Offices.  The provisions of Section 10(a) will apply
to this Agreement.

 

(d)                                 Multibranch
Party.  For the purpose of
Section 10(c) of this Agreement:

 

Party A is not a Multibranch Party.

 

Party B is not a Multibranch Party.

 

(e)                                  Calculation
Agent.  The Calculation Agent is Party A
unless otherwise specified in a Confirmation in relation to the relevant
transaction; provided, however, if an Event of Default has occurred and is
continuing with respect to Party A, then a third party will be selected to be
the Calculation Agent by Party B from Annex A.

 

(f)                                    Credit
Support Document.  Details of any Credit
Support Document.

 

	
  Party B:

  	
   

  	
  Not Applicable.

  
	
   

  	
   

  	
   

  
	
  Party A:

  	
   

  	
  Not Applicable.

  

 

Any Credit Support Document required pursuant to a Confirmation shall
be deemed to be incorporated into, and is hereby made a part of, this
Agreement, and this Agreement together with all Credit Support Documents shall
be deemed to constitute one swap agreement pursuant to 11 U.S.C.
Section 546(g) and 12 U.S.C. Section 1821(e)(8)(D)(vii).

 

(g)                                 Credit
Support Provider.

 

	
  Party B:

  	
   

  	
  Not Applicable.

  
	
   

  	
   

  	
   

  
	
  Party A:

  	
   

  	
  Not Applicable

  

 

(h)                                 Governing
Law.  This Agreement will be governed by
and construed in accordance with the laws of the State of New York, and each
party hereby submits to the jurisdiction of the Courts of the State of New York.

 

(i)                                     Netting
of Payments.  Section 2(c)(ii) of this Agreement will apply to any Transactions from
the date of this Agreement. 
Nevertheless, to reduce settlement risk and operational costs, the
parties agree that they will endeavor to net across as many Transactions as
practicable wherever the parties can administratively do so.

 

(j)                                     “Affiliate”
will have the meaning specified in Section 14 of this Agreement.

 

(k)                                  Severability.  If any term, provision, covenant, or
condition of this Agreement, or the application thereof to any party or
circumstance, shall be held to be invalid or unenforceable (in whole or in
part) for any reason, the remaining terms, provisions, covenants, and
conditions hereof shall continue in full force and effect as if this Agreement
had been executed with the invalid or unenforceable portion eliminated, so

 

8

 

long as this
Agreement as so modified continues to express, without material change, the
original intentions of the parties as to the subject matter of this Agreement
and the deletion of such portion of this Agreement will not substantially
impair the respective benefits or expectations of the parties.

 

Part 5

 

Other
Provisions

 

(1)                                  Upon the designation
or deemed designation of any Early Termination Date as a result of an Event of
Default, in addition to and not in limitation of or with prejudice to any other
right or remedy (including any right to setoff, counterclaim, or other right to
withhold payment) under applicable law:

 

the Non-defaulting Party or the party that is not the Affected Party
(in either case, “X”) may, without prior notice to any person, set off any sum
or obligation (whether or not arising under this Agreement, whether matured or
unmatured and irrespective of the currency, place of payment or booking office
of the sum or obligation) owed by the Defaulting Party or Affected Party (in
either case, “Y”) to X or to any Affiliate of X, against any sum or obligation
(whether or not arising under this Agreement or any other agreement, whether
matured or unmatured and irrespective of the currency, place of payment or
booking office of the sum or obligation) owed by X or any Affiliate of X to Y,
and, for this purpose, may convert one currency into another, at the rate of
exchange at which such party would be able, acting in a reasonable manner and
in good faith, to purchase the relevant amount of such currency.  If any sum or obligation is unascertained, X
may in good faith estimate that sum or obligation and set off in respect of
that estimate, subject to X or Y, as the case may be, accounting to the other
party when such sum or obligation is ascertained.  X will give notice to the other party of any set-off effected
under this Part 5(1).

 

Nothing in this Agreement shall be effective or deemed to create any
charge under English law.

 

Nothing in this Part 5(1) shall be effective to create a charge or
other security interest.  This Part 5(1)
shall be without prejudice and in addition to any right of set-off, combination
of accounts, lien or other right to which any part is at any time otherwise
entitled (whether by operation of law, contract or otherwise).

 

(2)                                  Section 3 of the
Agreement is hereby amended by adding at the end thereof:

 

(g)  Eligible Contract
Participant.  It is an “eligible
contract participant” as defined in Section 1a(12) of the Commodity Exchange
Act.

 

(h)  Relationship Between
Parties.  Each party will be deemed
to represent to the other party on the date on which it enters into a
Transaction that (absent a written agreement between the parties that expressly
imposes affirmative obligations to the contrary for that Transaction):

 

9

 

(i)  Non Reliance.  It is acting for its own account, and it has
made it own independent decisions to enter into that Transaction and as to
whether that Transaction is appropriate or proper for it based upon its own
judgment and upon advice from such advisers as it has deemed necessary.  It is not relying on any communication (written
or oral) of the other party as investment advice or as a recommendation to
enter into that Transaction; it being understood that information and
explanations related to the terms and conditions of a Transaction shall not be
considered investment advice or a recommendation to enter into that
Transaction.  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 that Transaction.

 

(ii)  Evaluation and
Understanding.  It is capable of
assessing the merits of and understanding (on its own behalf or through
independent professional advice) and understands and accepts the terms,
conditions and risks of that Transaction. 
It is also capable of assuming, and assumes, the risks of that
Transaction.

 

(iii)  Status of Parties.  The other party is not acting as a fiduciary
for or an advisor to it in respect of that Transaction.

 

(3)                                  Consent to
Recording.  Each party hereto consents
to the monitoring or recording, at any time and from time to time, by the other
party of any and all communications between officers or employees for the
parties, waives any further notice of such monitoring or recording, and agrees
to notify its officers and employees of such monitoring or recording.

 

(4)                                  With respect to each
Transaction entered into pursuant to this Agreement, Party A will send to Party
B a Confirmation within ten (10) Local Business Days after such entry.  Party B shall, within ten (10) Local Business
Days after receipt of such Confirmation, confirm the accuracy of such
Confirmation or provide notice to Party A of its disagreement with such
Confirmation (indicating how it believes the terms of such Confirmation should
be correctly stated).

 

(5)           Scope of Agreement.  Any Specified Transaction (whether now
existing or hereafter entered into) between the parties, the confirmation of
which fails by its terms  expressly to exclude application of this
Agreement, shall be governed by and be subject to this Agreement.  Any such confirmation shall be a
“Confirmation”, and any such Specified Transaction shall be a “Transaction”,
for all purposes of this Agreement.

 

(6)                                  Definitions. 
Unless otherwise specified in a Confirmation, each
Transaction between the parties shall be subject to the 2000 ISDA Definitions
as published by the International Swaps and Derivatives Association, Inc. (the
“2000 Definitions”), and will be governed in all relevant respects by the
provisions of the 2000 Definitions, without regard to any amendments thereto
subsequent to the date hereof.  The
provisions set forth in the 2000 Definitions are incorporated by reference in
and shall be deemed a part of this Agreement except that references in the 2000
Definitions to a “Swap Transaction” shall be deemed references to a
“Transaction” for purposes of this Agreement.

 

10

 

(7)                                  Change of Account.  Section 2(b) of this
Agreement is hereby amended by the addition of the following after the word
“delivery” in the first line thereof:

 

“to another account in the same legal and tax
jurisdiction as the original account”

 

(8)                                  Waiver
of Jury Trial.  TO THE FULLEST EXTENT
PERMITTED BY LAW, EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO A
TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT.

 

11

 

IN WITNESS WHEREOF, the parties have executed this Schedule by their
duly authorized representatives as of the date hereof.

 

	
   

  	
  PRICELINE.COM
  INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Robert J. Mylod

  
	
   

  	
  Name: 
  Robert J. Mylod

  
	
   

  	
  Title: 
  Chief Financial Officer

  
	
   

  	
   

  
	
   

  	
  CREDIT
  SUISSE FIRST BOSTON

  INTERNATIONAL

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Paul Chelsom

  
	
   

  	
   

  	
  Name:  Paul Chelsom

  
	
   

  	
   

  	
  Title:  Attorney-in-Fact

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Andrew Walton

  
	
   

  	
  Name:  Andrew
  Walton

  
	
   

  	
  Title:  Attorney-in-Fact

  
				

 

12Exhibit 10.81

 

 

 

26 November 2003

 

Priceline.com Incorporated

800 Connecticut Tumpike

Norwalk, CT 06854

 

Attn: Peter Millones / Joy Willing (Sullivan & Cromwell)

Fax: 203-299-8795 / 203-293-6330

 

 

Dear Sirs:

 

The purpose of this letter agreement (this “Confirmation”) is to
confirm the terms and conditions of the Transaction entered into between Party
A and Party B on the Trade Date Specified below (the “Transaction”) on the
terms set out below.  This Confirmation constitutes
a “Confirmation” as referred to in the Agreement specified below.

 

1.                                       The definitions
and provisions contained in the 200 ISDA Definitions (as published by the
International Swaps and Derivatives Association, Inc.) are incorporated into
this Confirmation.  In the event of any
inconsistency between those definitions and provisions and this Confirmation,
this Confirmation will govern. 
References herein to a “Transaction” shall be deemed to be references to
a “Swap Transaction” for the purposes of the 2000 ISDA Definitions.

 

If you and we are parties to the 1992 ISDA Master Agreement, (the
“Agreement”), this Confirmation supplements, forms a part of, and is subject to
such Agreement. Upon execution and delivery by you and us of the Agreement,
this Confirmation shall supplement, form a part of, and be subject to such
Agreement.  This Confirmation (together
with all other Confirmation of Transactions previously entered into between us,
notwithstanding anything to the contrary therein) supplement, form a part of,
and are subject  to the Agreement.

 

The Agreement and each Confirmation thereunder will be governed by and
construed in accordance with the law of the State of New York and each party
hereby submits to the jurisdiction of the Courts of the State of New York.  For purposes of Section 6 of the Agreement,
Second Method and Market Quotation shall apply to this Transaction.

 

Party A and Party B each represents to the other that it has entered
into this Transaction in reliance upon such tax, accounting, regulatory, legal,
and financial advice as it deems necessary and not upon any view expressed by
the other.

 

 

	
  External ID: 8679461/V/NY

  	
   

  	
  TCN: 533250002

  
	
  A subsidiary of CREDIT SUISSE FIRST BOSTON

  	
  Registered Office as above. 
  Regulated by the Financial Services Authority

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON INTERNATIONAL is registered as unlimited
  in England under No. 2500199

  
				

 

 

In this Confirmation, “Party A” means Credit
Suisse First Boston International, “Party B” means Priceline.com Incorporated.

 

	
  2.

  	
   

  	
  General terms of the Transaction:

  
	
   

  
	
   

  	
  Notional Amount:

  	
   

  	
  $45,000,000 subject to a Conversion Event, Redemption Event,
  Amendment Event, Repayment Event (as each term is defined below) or any other
  similar occurrences as determined by the Calculation Agent.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Trade Date:

  	
   

  	
  November 20, 2003

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Effective Date:

  	
   

  	
  November 24, 2003

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Termination Date:

  	
   

  	
  The earlier of: (i) August 1, 2010, subject to adjustment in
  accordance with the Following Business Day Convention, and (ii) the Early
  Termination Date, subject to the Early Termination and Additional Termination
  Event provisions set forth below

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Fixed Amounts:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed Rate Payer:

  	
   

  	
  Party A

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed Rate Payer Payment Dates:

  	
   

  	
  Each February 1st and August 1st, commencing on
  February 1, 2004 and ending on August 1, 2010, inclusive with the final
  Payment Date on August 1, 2010, subject to adjustment in accordance with the
  Following Business Day Convention, using no Adjustment of Period End Dates; provided, however, that upon a
  Redemption Event or Conversion Event, Party A’s obligation to pay the Fixed
  Amount in respect of the related Terminated Amount (as defined below) shall
  terminate.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed Rate:

  	
   

  	
  1.00%

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Accrued Fixed Amounts Upon a Redemption or Conversion Event:

  	
   

  	
  In the event of a Redemption Event, Party A shall pay any accrued but
  unpaid fixed

  
						

 

2

 

	
   

  	
   

  	
   

  	
  Amounts in respect of the related Terminated Amount to, but
  excluding, the date fixed for such redemption pursuant to the terms of the
  Indenture. In the event a Conversion Event, no Fixed Amounts accrued but
  unpaid since the most recent Fixed Rate Payer Payment Date in respect of the
  related Terminated Amount shall be paid upon such Conversion Event.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Fixed Rate Day Count Fraction:

  	
   

  	
  30/360 unadjusted

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Floating Amounts:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate Payer:

  	
   

  	
  Party B

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate Payer Payment Dates:

  	
   

  	
  Each March 31st, June 30th, September 30th
  and December 31st, commencing on December 31, 2003, and ending on
  August 1, 2010, inclusive with the final Payment Date on August 1, 2010,
  subject to adjustment in accordance with the Modified Following Business Day
  Convention, using Adjustment of Period End Dates, subject to Early
  Termination ; provided, however,
  that upon a Redemption Event or Conversion Event, Party B’s obligation to pay
  the Floating Amount in respect of the related Terminated Amount shall
  terminate.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate for initial Calculation Period:

  	
   

  	
  1.17% (not including Floating Rate Spread)

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate Option:

  	
   

  	
  USD-LIBOR-BBA

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Accrued Floating Amounts Upon a Redemption or Conversion Event:

  	
   

  	
  In the event of a Redemption Event, Party B shall pay any accrued but
  unpaid Floating Amounts in respect of the related Terminated Amount to, but
  excluding, the date fixed for such redemption pursuant to the terms of the
  Indenture.  In the event of a
  Conversion Event,

  
						

 

3

 

	
   

  	
   

  	
   

  	
  no Floating Amounts accrued but unpaid since the most recent Floating
  Rate Payer Payment Date in respect of the related Terminated Amount shall be
  paid upon such Conversion Event.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Designated Maturity:

  	
   

  	
  3 months; except in respect of the first and last interest periods,
  for which an interpolation of 3 month and 1 month U.S. Dollar LIBOR-BBA rate
  shall apply.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate Spread:

  	
   

  	
  -2.21% through August 1, 2008; provided that on August 1, 2008 (the
  “Floating Rate Spread Reset Date”), the Floating Rate Spread shall be reset
  to a level which is commercially reasonable, in the sole judgment of Party A.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Floating Rate Day Count Fraction:

  	
   

  	
  Actual/360 adjusted

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Reset Dates:

  	
   

  	
  The First day of each Calculation Period

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Compounding:

  	
   

  	
  Inapplicable

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Early Termination:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Early Termination Upon Redemption or Conversion:

  	
   

  	
  If Party B receives notice of a Conversion Event (defined below) with
  respect to any Reference Bonds or in the event of a Redemption Event (defined
  below), Party B shall immediately (and no later than one (1) Business Day
  following receipt of such notice) provide written notice (each a “Termination
  Notice”) to Party A, specifying the details of such event, including the
  principal amount of Reference Bonds being converted or redeemed.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Notional Adjustment:

  	
   

  	
  If Party A receives a Termination Notice, then a portion of this
  Transaction shall terminate equal to the Notional Amount multiplied by the
  Termination Ratio (defined below) (the

  
					

 

4

 

	
   

  	
   

  	
   

  	
  “Terminated Amount”) and the Calculation Agent shall reduce the
  Notional Amount of this Transaction by the Terminated Amount.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  There shall be no payment due to either party hereunder under Section
  6 of the Agreement in respect of a Terminated Amount.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Notwithstanding any right of Party B to reissue or resell the
  Reference Bonds, Party A has no obligation to increase or otherwise take into
  consideration any such reissued or resold Reference Bonds in respect of the
  Notional Amount.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Conversion Event:

  	
   

  	
  The Conversion of all or a portion of the Reference Bonds into Shares
  by the Issuer pursuant to the terms of the Indenture.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Redemption Event:

  	
   

  	
  The redemption of all or a portion of the Reference Bonds by the
  Issuer pursuant to the Indenture

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Termination Ratio:

  	
   

  	
  With respect to any Conversion Event or Redemption Event, the ratio of
  (a) the principal amount of the Reference Bonds converted or redeemed in
  connection therewith to (b) the total principal amount of Reference Bonds
  originally issued.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Reference Bonds:

  	
   

  	
  Party B’s (also sometimes referred to as the Issuer’s) $125,000,000
  aggregate principal amount of 1.00% Convertible Senior Notes, CUSIP
  741503AB24, convertible into shares of $0.008 par value common stock of Party
  B (the “Shares”).

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Indenture:

  	
   

  	
  The Indenture dated as of February 20, 2002 between the Issuer and U.S.
  Bank National Association, as trustee, as amended or supplemented from time
  to time.

  
					

 

5

 

	
   

  	
  Business Days:

  	
   

  	
  London and New York

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Calculation Agent:

  	
   

  	
  Party A; provided, however, if an Event of Default has occurred and
  is continuing with respect to Party A, then a third party mutually acceptable
  to both Party A and Party B will be selected to be the Calculation Agent by
  Party B, from the list of preapproved third parties.

  

 

3.                                       Additional
Termination Events:

 

3.1                                 The
parties hereto agree that (i) the occurrence of any of the following shall
automatically be an Additional Termination Event with respect to Party B in
which Party B is the sole Affected Party and this Transaction is the only
Affected Transaction, and (ii) notwithstanding anything to the contrary in the
Agreement, Party A may designate the date of the occurrence of any of the
following events, or any date thereafter, as the Early Termination Date and
Party B hereby agrees that, upon prior written notice thereof by Party A, such
notice shall be deemed effective for purposes of Section 6 of the Agreement.

 

(a)                                  An Amendment Event
occurs (in which case the entirety of this Transaction shall be subject to
termination); or

 

(b)                                 A Repayment Event occurs
(in which case this Transaction shall only be subject to termination in respect
of the Additional Terminated Amount (defined below)).  The Calculation Agent shall reduce the Notional Amount by the
Additional Terminated Amount and, for the avoidance of doubt, the terms of this
Transaction shall continue to apply to the remaining Notional Amount, if any.

 

3.2                                 As
used in this Section 3:

 

“Amendment Event” means that the Issuer amends, modifies, supplements
or waives any term of the Indenture or the Reference Bonds if such amendment,
modification, supplement or waiver has a material effect on this transaction or
a material adverse effect on Party A’s ability to hedge all or a portion of
this Transaction.

 

“Repayment Event” means that (a) any Reference Bonds are repurchased or
redeemed (in each case whether in connection with or as a result of a change of
control, howsoever defined, or for any other reason) by the Issuer, (b) any
Reference Bonds are delivered to the Issuer in exchange for delivery of any property
or assets of the Issuer or any of its affiliates

 

6

 

(howsoever described), (c) any principal of any of the Reference Bonds
is repaid prior to the scheduled maturity date of the Reference Bonds (whether following
acceleration of the Reference Bonds or otherwise), or (d) any Reference Bonds
are exchanged by or for the benefit of holders thereof for any other securities
of the Issuer or any of its affiliates (or any other property, or any
combination thereof) pursuant to any exchange offer or similar transaction.

 

“Additional Terminated Amount” means the Notional Amount multiplied by
the ratio of (a) the principal amount of the Reference Bonds subject to the
Repayment Amount to (b) the total principal amount of Reference Bonds
originally issued

 

4.                                       Additional
Party B Covenants and Representations:

 

4.1                                 Party
B agrees to notify Party A in writing immediately, and in no event later than
within one (1) Business Day of the date Party B receives, or is deemed to receive,
notice of such Event, of the occurrence of any Conversion Event, Redemption
Event, Amendment Event or Repayment Event. 
Such notice shall include a detailed description of any such Amendment
Event, shall identify the nature of any such Repayment Event and the principal
amount of the Reference Bonds being paid and contain details of any Conversion
Event or Redemption Event.

 

4.2                                 Party
B hereby represents that, on the Trade Date, it is not in possession of any
material non-public information concerning the Issuer or the Reference Bonds
and it has publicly disclosed all material information concerning the Issuer
and the Reference Bonds as may be required to allow Party B to purchase or sell
Shares or the Reference Bonds in compliance with the applicable federal
securities laws and that it has publicly disclosed all material information
with respect to its condition (financial or otherwise) required to be
disclosed.

 

5.                                       Master
Agreement Provisions:

 

The following terms will apply to this Transaction as if such terms
were in the Schedule to the 1992 ISDA Master Agreement referenced in the third
paragraph of the Confirmation.  Any
reference to the “Agreement” shall be deemed a reference to such 1992 ISDA
Master Agreements supplemented by the following terms.

 

(a)                                  Credit Support Document.  Details of any Credit Support Document:
Collateral Appendix, attached.

 

(b)                                  Governing
Law.  The Agreement and each
Confirmation thereunder will be governed by and construed in accordance with
the law of the State of New York and each party hereby submits to the
jurisdiction of the Courts of the State of New York.

 

7

 

(c)                                  Recording of Conversation.  Each party to this Agreement acknowledges
and agrees to the tape recording of conversations between the parties to this
Agreement whether by one or other or both of the parties and each party hereby
consents to such recordings being used as evidence in Proceedings.

 

(d)                                  Waiver of Right to Trial by Jury.  Each party waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in
respect of any suit, action or proceeding relating to this Agreement or any
Credit Support Document.  Each party (i)
certifies that no representative, agent or attorney of the other party or any
Credit Support Provider has represented, expressly or otherwise, that such
other party would not, in the event of such a suit action or proceeding, seek
to enforce the foregoing waiver and (ii) acknowledges that it and the other party
have been induced to enter into this Agreement and provide for any Credit
Support Document, as applicable by, among other things, the mutual waivers and
certifications in this Section.

 

6.                                       Account
Details:

 

Interest Rate Swap Transaction:

 

	
  Payments to Party A:

  	
   

  	
  To be advised

  
	
   

  	
   

  	
   

  
	
  Payments to Party B:

  	
   

  	
  To be advised

  

 

8

 

Credit Suisse first Boston International is regulated by The Financial
Services Authority and has entered into this transaction as principal.  The time at which the above transaction was
executed will be notified to Party B on request.

 

Please confirm that the foregoing correctly sets forth the terms of our
agreement by signing and returning this Confirmation.

 

	
   

  	
  Yours faithfully,

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CREDIT SUISSE FIRST BOSTON

  INTERNATIONAL

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Damian Brettkelly

  	
   

  
	
   

  	
  Name:

  	
  Damian Brettkelly

  	
   

  
	
   

  	
  Title:

  	
  Assistant Vice President

  	
   

  
	
   

  	
   

  	
  OTC Derivative Support Group

  	
   

  
	
   

  	
   

  	
   

  
	
  Confirmed as of the date first written above:

  	
   

  
	
   

  	
   

  
	
  PRICELINE.COM INCORPORATED

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Robert J. Mylod

  	
   

  	
   

  
	
  Name:

  	
  Robert
  J. Mylod

  	
   

  
	
  Title:

  	
  Chief
  Financial Officer

  	
   

  
								

 

9

 

COLLATERAL APPENDIX IN RESPECT OF THE
CONFIRMATION

OF THE TRANSACTION BETWEEN

CREDIT SUISSE FIRST BOSTON INTERNATIONAL

AND

PRICELINE.COM INCORPORATED

 

(External ID: 8679461; TCN: 533250002)

 

This Appendix constitutes a security agreement under Articles 8 and 9
of the Uniform Commercial Code of the State of New York (the “UCC”) with
respect to any Collateral.

 

1.                                       Definitions:

 

1.1                                 In
this Appendix, the following expressions have the following meanings:

 

“Agency” means the
Government National Mortgage Association (“GNMA”), the Federal National Mortgage
Association (“Fannie Mae”), and
the Federal Home Loan Mortgage Corporation (“Freddie
Mac”).

 

“Agency Notes” means
registered, unsecured, unsubordinated negotiable debt obligations issued by
Fannie Mac or Freddie Mac, other than Agency Pass-Through Mortgage Securities
or Agency CMO/REMICs, or issued on behalf of all the Federal Home Loan Banks in
the Federal Home Loan Bank System and constituting the joint and several
obligation of all the Federal Home Loan Banks, and, in any such case, having a
remaining maturity of no more than fifteen (15) years.

 

“Agency Pass-Through Mortgage Securities”
means registered securities commonly referred to as “Pass-Through Securities”
representing fractional undivided interests in pools of mortgages issued and/or
guaranteed by an Agency.

 

“Banking Day” means
any day on which commercial banks are open for business (including dealings in
foreign exchange and foreign currency deposits) in (a) London and New York, and
(b) in the case of a Transfer of Permitted Collateral (i) the location of the
account into which such Transfer is to be made, and (ii) either, in the case of
a Transfer of Cash, the principal financial centre of the currency of such Cash
or, in the case of a Transfer of other Permitted Collateral, the location of
the account out of which such Transfer shall be made and, if different, the
place where the Transfer will be registered (if applicable);

 

“Cash” means US
Dollars and such other currency or currencies as may from time to time be
acceptable to the Secured Party for the purposes of this Appendix;

 

“Cash Collateral” means
Collateral comprising Cash;

 

10

 

“Collateral” means
all the Permitted Collateral Transferred to and held by or for the Secured
Party pursuant to this Appendix (for the avoidance of doubt including, without
limitation, Initial Collateral) together 
with all proceeds, distributions, substitutions for and additions to the
foregoing in accordance with this Appendix and which has not been retransferred
to the Pledgor;

 

“Initial Collateral”
means Permitted Collateral Delivered to Party A by Party B pursuant to
Paragraph 4;

 

“Permitted Collateral” means
collectively Cash, US Treasuries and such other assets as may from time to time
be acceptable to the Secured Party for the purposes of this Appendix;

 

“Pledgor” means
Party B;

 

“Quasi Agency Obligations”  means the negotiable debt obligations of the
US Government National Mortgage Association, the US Federal National Mortgage
Association, the US Federal Home Loan Mortgage Corporation, the US Student Loan
Marketing Association or a US Federal Home Loan Bank;

 

“Relevant Percentage”
means, on any date, the percentage appearing below opposite the relevant
Permitted Collateral:

 

	
  Type of Permitted Collateral

  	
   

  	
  Relevant

  Percentage

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  US Government Obligations:

  	
   

  	
   

  	
   

  
	
  with a Residual Maturity of less than one
  year

  	
   

  	
  100

  	
  %

  
	
  with a Residual Maturity equal to or
  greater than 1 year but less than 5 years

  	
   

  	
  98

  	
  %

  
	
  with a Residual Maturity equal to or
  greater than 5 year but less than 10 years

  	
   

  	
  97

  	
  %

  
	
  with a Residual Maturity equal to or
  greater than 10 year but less than 30 years

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Agency Notes

  	
   

  	
  93

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Agency Pass-Through Mortgage Securities

  	
   

  	
  95

  	
  %

  
	
   

  	
   

  	
   

  	
   

  
	
  Vanilla Agency CMO/REMIC

  	
   

  	
  92

  	
  %

  

 

	
  Other Permitted Collateral (excluding US Dollars)

  	
   

  	
  such percentage as shall from time to time be specified by the
  Valuation Agent;

  	
   

  

 

Notwithstanding anything to the contrary contained in this Appendix, on
any date, for either party:

 

11

 

(i)             the aggregate value of Agency Notes,
Agency Pass-Through Mortgage Securities and Vanilla Agency CMO/REMICs
comprising the Posted Collateral of a party shall not exceed USD 70,000,000.

 

(ii)          In the case of Agency Pass-Through Mortgage
Securities, the underlying mortgages are required to be issued AFTER July 18,
1984.

 

“Required Amount”
means, in respect of any party on any date, an amount expressed in US Dollars,
agreed upon (orally or in writing) by Party A and Party B on such date or, if
Party A and Party B are unable promptly to agree upon an amount on such date,
the sum of:

 

(a)                                  the Value of the
Permitted Collateral required to be Delivered and maintained pursuant to
Paragraph 4; and

 

(b)                                 the amount, if any,
determined by the Valuation Agent, which would be payable by the Pledgor to the
Secured Party under Section 6(e)(ii)(1) of the Agreement if an Early
Termination Date were to occur in respect of this Transaction on such date, as
a result of a Termination Event on the basis that the Secured Party is not the
Affected Party and provided that Loss will be determined by the Valuation Agent
using its estimates of the total losses and costs (or gain, in which case
expressed as a negative number) that would be borne by Party A upon an Early
Termination of this Transaction (as that term is defined in the definition of Loss);
provided that the amount calculated under this provision (b) shall be deemed to
be zero whenever the calculation described herein produces a number less than
zero;

 

“Residual Maturity”
means, on any date, in respect of any Permitted Collateral comprising
securities, the residual maturity of such securities as of such date;

 

“Secured Party”
means Party A;

 

“Transfer”  or “Transferred” means the transfer by one
party to the other party (or its account) of Permitted Collateral:

 

(a)                                  in the case of Cash,
by wire transfer into one or more bank accounts specified by the recipient;

 

(b)                                 in the case of
Permitted Collateral that cannot be delivered by book entry, by delivery in
appropriate physical form for transfer and accompanied by duly executed
instruments of transfer in blank and such other documentation as the recipient
of such transfer may at any time reasonably request; or

 

(c)                                  in the case of
Permitted Collateral (other than Cash) that can be delivered by book entry, by
giving written instructions to a Federal Reserve Bank, or the Euroclear

 

12

 

S.A./N.V. or Clearstream Bank, société
anonyme clearing systems, or any other depositary institution or
entity agreed between the parties, together with a written copy thereof to the
recipient of such Permitted Collateral, which if complied with would result in
a legally effective transfer of the relevant interest to such recipient; or

 

(d)                                 by any other method
mutually acceptable to the parties;

 

As used herein, “Transfer” is intended to have the same meaning as when
used in UCC Section 8-313 or, where applicable, in any federal regulation
governing transfers of Permitted Collateral;

 

“Treasury Securities”
means negotiable, registered debt obligations issued by the U.S. Treasury
Department, but excluding principal-only and interest-only Treasury strips.

 

“US Dollars”  and “US$” means the lawful currency of the
United States of America;

 

“US Government Obligations”
means the negotiable debt obligations of the United States of America issued by
the US Treasury Department or any other agency thereof, or negotiable debt
obligations which are fully guaranteed or guaranteed as to principal and
interest by the United States of America, provided that such obligations shall
have a Residual Maturity as of the date of their Transfer to the Secured Party
of less than ten (10) years, and, for the avoidance of doubt, Quasi Agency
obligations shall not constitute US Government Obligations;

 

“Valuation Agent”
means Party A;

 

“Valuation Date”
means any New York Business Day during the operation of this Collateral
Appendix; and

 

“Value” means on any
date:

 

(a)                                  with respect to US
Dollars, the amount thereof;

 

(b)                                 with respect to Cash
comprising currencies other than US Dollars, the equivalent amount thereof in
US Dollars, determined by the Valuation Agent, multiplied by the applicable
Relevant Percentage.

 

(c)                                  with respect to any
US Government Obligations, the bid price for such US Government Obligations,
obtained by the Valuation Agent and expressed in US Dollars, multiplied by the
applicable Relevant Percentage; and

 

13

 

(d)                                 with respect to any
other Permitted Collateral, the fair market value thereof (expressed in US
Dollars) on such date as determined in any reasonable manner by the Valuation
Agent multiplied by the applicable Relevant Percentage.

 

“Vanilla Agency CMO/REMICs”  means registered, negotiable certificates
representing undivided interests in a pool of Agency Pass-Through Mortgage Securities
that (i) rank pari passu with the highest debt class for payment priority in
the relevant issuance; (ii) are listed on the Bloomberg or Intex (or a
respective successor) listing service, as planned amortization class (“PAC”) or
sequential obligations with modeled cash flows; (iii) pay principal and
interest on a monthly basis; and (iv) have pool numbers; but excluding: (A)
interest-only or principal-only securities; (B) securities commonly known as
“Z”, ‘accural’, or ‘accretion’ bonds; (C) securities commonly known as
‘compartion’ or ‘support’ bonds; (D) Derivatives; and (E) securities
representing residual interests in any mortgage pool.

 

1.2                                 References
to Paragraphs are to Paragraphs of this Appendix.

 

2.                                       Grant of Security Interest:

 

2.1                                                                                 As
continuing security for the payment and discharge of all its obligations under
the Agreement and subject to Paragraph 2.2, the Pledgor, as sole beneficial
owner hereby pledges and grants to the Secured Party a first priority security
interest in, lien on, and right of set-off against, the Collateral and agrees
to do all acts and execute and deliver all documents necessary to ensure that
the Collateral remains at all times subject to the pledge and security interest
referred to in this Paragraph 2.

 

2.2                                 Although the parties
intend that the Pledgor shall have no continuing right, title or interest in or
to Cash Collateral, in the event that the Pledgor is deemed to have any right,
title or interest therein, the foregoing Paragraph 2.1 shall apply to such Cash
Collateral.

 

2.3                                 The rights of the
Secured Party with respect to any Collateral Transferred hereunder shall
include, in addition to and without limiting any other rights provided for in
this Appendix, the right on any terms to use, commingle, sell, pledge, repledge,
hypothecate, assign, or otherwise dispose of such Collateral, provided that no
such transaction shall relieve the Secured Party of its obligations to return
such Collateral pursuant to this Appendix.

 

3.                                       Conditions Precedent:

 

Any obligation on the part of the Secured Party to make a Transfer
pursuant to this Appendix is subject to the following conditions precedent:

 

(a)                                  no Event of Default,
Termination Event and/or any event or condition that with the giving of notice
or passage of time, or both, would constitute such an Event of

 

14

 

Default or Termination Event, has occurred and is continuing as of the
date for such Transfer with the Pledgor as the Defaulting Party or the Affected
Party (as the case may be); and

 

(b)                                 no breach by the
Pledgor hereunder of any obligation to the Secured Party for any payment or
delivery arising otherwise than under the Agreement has occurred and is
continuing as of the date for such Transfer.

 

4.                                       Initial and On-going Collateral:

 

On the Trade Date, Pledgor shall Deliver to Secured Party Permitted
Collateral, having a Value not less than 3.00% of the Notional Amount, in
accordance with the delivery instructions in Section 6 of the Confirmation.

 

5.                                       Delivery of Collateral:

 

Where, on any Valuation Date, the Required Amount exceeds the Value of
the Collateral held by the Secured Party on such date, the Pledgor shall, if
requested by the Secured party. 
Transfer to the Secured Party Permitted Collateral having a Value equal
to such excess (rounded upwards to the nearest integral multiple of US$100,000)
within two (2) Banking Days of such request.

 

6.                                       Return of Collateral:

 

6.1                                                                                 Where,
on any Valuation Date, the Value of Collateral held by the Secured Party
exceeds the Required Amount on such date, the Secured Party shall notify
Pledgor of such excess and, if requested by the Pledgor and subject to
Paragraph 3, Transfer to the Pledgor Collateral having a Value equal to such
excess (rounded downwards to the nearest integral multiple of US$100,000)
within three (3) Banking Days of such request.

 

6.2                                 The Secured Party may
in lieu of returning to the Pledgor any Collateral comprising securities (as
such term is defined in the UCC) return securities which are fungible (as such
term is used in Section 1-201(17) of the UCC) therewith in satisfaction of its
obligations under this Paragraph 6.

 

7.                                       Interest on Cash Collateral:

 

7.1                                                                                 Cash
Collateral shall accrue interest for the benefit of the Pledgor at a rate equal
to the overnight rate for deposits in US Dollars as displayed on Telerate page
118 and will be compounded on each Business Day provided that if, for any
reason, Telerate page 118 shall be unavailable or any Cash Collateral shall
comprise a currency other than US Dollars interest shall accrue at such rate
and be compounded on such days as the Secured Party shall reasonably determine.

 

15

 

7.2                                 Interest accruing
hereunder on Cash Collateral shall accrue from the date that the deposit of such
Cash is confirmed to or to the order of the Secured Party and, subject to
Paragraph 3, shall be paid to the Pledgor within three (3) Banking Days of the
last day of each month, provided that such interest shall only be paid to the
Pledgor to the extent that such interest when added to the Value of the
Collateral, as of the date of such payment, exceeds the Required Amount on such
date and any such interest not paid to the Pledgor shall be an accretion to the
Collateral.

 

8.                                       Substitution:

 

The Pledgor may, with the prior consent of the Secured Party (such
consent not to be unreasonably withheld, conditioned or delayed ), substitute
other Permitted Collateral for existing Collateral.  In the event of the Secured Party granting its consent thereto
the pledgor shall pay all the costs involved in effecting such substitution
and, subject to Paragraph 3, the Secured Party shall Transfer to the Pledgor
the existing Collateral which is the subject of the substitution as soon as
practicable after the Secured Party shall be satisfied that it has received
Permitted Colleteral in replacement therefor having a value, on the date of
Transfer, not less than that of the Collateral being substituted.

 

9.                                       Responsibility
for and Care of Collateral:

 

9.1                                 Subject to Paragraph 12
all rights and powers conferred on or exercisable by the registered holder,
bearer or legal owner of the Collateral (excluding Cash Collateral) shall be
exercisable by the Pledgor or as the Pledgor shall direct and the Pledgor shall
remain liable to observe and perform all conditions and obligations in respect
of the Collateral (excluding Cash Collateral). 
The secured Party shall, upon its receiving express and unequivocal
instructions from the Pledgor, take all action necessary on its part to ensure
that all such rights and powers are exercised in accordance with the Pledgor’s
instructions, provided that the Secured Party shall not be obliged to act in
accordance with the Pledgor’s instructions where: (a) such instructions involve
any expense, and such expense has not been funded in advance by the Pledgor; or
(b) to act in accordance with such instructions may reduce or in any way
prejudice the value of such Collateral. 
The Secured Party agrees to promptly forward to the Pledgor all
communications, notices or other information received by the Secured Party in
respect of the Collateral.

 

9.2                                 The Pledgor hereby
undertakes not to exercise such rights as it may have retained in respect of
the Collateral in such a way as to reduce or prejudice in any way the value of
the Collateral.

 

9.3                                 The Parties
acknowledge and agree that upon the Transfer of Collateral to the Secured
Party, or to an agent or custodian to receive and hold Collateral for or on
behalf of the Secured Party, such Collateral will not necessarily be registered
in the Pledgor’s name.

 

16

 

10.                                 Representations,
Warranties and Undertakings:

 

Each of the Secured Party and the Pledgor represents and Warrants that
the provisions of section 3 of the Agreement apply in full force and effect
and, without limiting the foregoing:

 

(a)                                  it has the power to
enter into the Transaction and to execute and deliver this Confirmation and
perform its obligations hereunder (including, for the avoidance of doubt, under
this Appendix);

 

(b)                                 its obligations under
the Transaction (including, for the avoidance of doubt, under this Appendix)
constitute its legal, valid and binding obligations, enforceable in accordance
with their respective terms;

 

(c)                                  it has taken all
necessary action to authorise such entry, execution, delivery and performance;

 

(d)                                 such entry, execution,
delivery and performance do not violate or conflict with any applicable law,
any provision of its constituent documents, any order or judgement of any court
or other agency of government applicable to it or any of its assets or any
contractual restriction binding on or affecting it or any of its assets;

 

(e)                                  with respect to the
Pledgor only, it is and, subject to the Transaction, the Pledge created
hereunder and the terms of this Confirmation (including this Annex), will at
all times to the sole, lawful and beneficial owner of the Collateral free from
all encumbrances and forms of security interests (except for the charge or
other security interest, howsoever described, created hereby), and no other
person (other that the Secured Party) has, or will at any time have, any
proprietary right or interest therein;

 

(f)                                    with respect to the
Pledgor only, except for the first priority security interest (howsoever
described) in favor of the Secured Party and subject to the Transaction, the
Pledge created hereunder and the terms of this Confirmation (including this
Annex), no person has, (or in the case of after-acquired Collateral, at the
time the Pledgor acquires rights therein, will have) any right, title, claim or
interest (by way of charge, lien, mortgage, pledge, security interest (however
described) or other encumbrance, or otherwise) in, against or to the
Collateral;

 

(g)                                 it will not (without
the prior written consent of the Secured Party at any time) sell or agree to
sell or otherwise dispose of, or agree to dispose of, the Collateral; and

 

(h)                                 it will ensure, so far
as it is able, that the Collateral is and at all times remains free from any
restrictions on transfer.

 

17

 

11.                                 Events of Default:

 

Notwithstanding anything to the contrary in the Agreement, the
occurrence at any time of any of the following events constitutes an Event of
Default with respect to the defaulting Party for the purposes of the Agreement:

 

(a)                                  failure by either
Party to Transfer Permitted Collateral in accordance with Paragraph 4,5 and 6,
if such failure is not remedied within one (1) Banking Day of notice of such
failure being given to such defaulting Party;

 

(b)                                 failure by either
Party to comply with or perform any other provision required to be complied
with or performed by it if such failure is not remedied within seven (7) days
of notice of such failure given to such defaulting Party;

 

(c)                                  the failing or
ceasing of any provision of the Confirmation (including this Appendix) to be in
full force and effect prior to the satisfaction by the Pledgor of all its
obligations to the Secured Party under the Agreement; or

 

(d)                                 either Party
disaffirms, disclaims, repudiates or rejects, in whole or in part, or
challenges the validity of, any part of the Confirmation (including this
Appendix).

 

12.                                 Secured Party’s Rights and Remedies:

 

Upon the occurrence and continuance of any Event of Default with
respect to the Pledgor or any Termination Event, or the breach by the Pledgor
of any payment or delivery to the Secured Party otherwise than under the
Agreement, the Secured Party may, to the extent permitted by applicable law,
exercise as to all Collateral then held by the Secured Party the rights and
remedies of a secured party under the UCC and as otherwise provided by law and,
in addition, at its sole option and without notice to or demand upon the
Pledgor, may exercise any or all of the following remedies:

 

(a)                                  set off the Secured
Party’s obligation to repay any Cash to the Pledgor, against any amounts owing
to the Secured Party by the Pledgor; and/or

 

(b)                                 liquidate and apply
all or any part of any Collateral other than Cash in any manner deemed
commercially reasonable by the Secured Party, with the proceeds of such
liquidation constituting Cash Collateral hereunder; and/or

 

(c)                                  set off the Value of
such Collateral against any amounts owing to the Secured party by the Pledgor.

 

18

 

13.                                 Delivery Default:

 

If the Pledgor fails to make, when due, any Transfer of Collateral, it
shall pay to the Secured Party, to the extent permitted under applicable law,
an amount equal to interest at the [Default Rate] (as that expression is
defined in the Agreement) multiplied by the Value of the Collateral which was
required to be Transferred, from (and including) the date that such Collateral
was required to be Transferred to (but excluding) the date of the Transfer.  This interest will be calculated on a daily
rate by reference to the actual number of days elapsed.

 

14.                                 Currency Conversion:

 

The equivalent on any day in one currency (the “first currency”) of an
amount denominated in another currency (the “second currency”) shall be an
amount in the first currency equal to the amount which the Valuation Agent
would have received if the Valuation Agent had on such day made a purchase of
the first currency with such amount of the second currency at its then
prevailing offered spot rate of exchange.

 

15.                                 Security and Performance Assurance:

 

For the avoidance of doubt the parties agree that:

 

(a)                                  Cash
Collateral, is not and shall not be deemed to be “client money” for the
purposes of the Financial Services Authority Client Assets Rules (the “Rules”),
as amended from time to time, and as a consequence such Cash will not be
segregated from that of the Secured Party, will be used by the Secured Party in
the ordinary course of its business and will not be subject to the protections
conferred by the Rules.  In such
circumstances the Pledgor will be a general creditor of the Secured Party; and

 

(b)                                 Collateral
constitutes security and performance assurance without which the Secured Party
would not otherwise enter into and continue any and all Transactions.

 

17.                                 Notices:

 

Any notice or demand to be given to or made by the Secured Party or the
Pledgor pursuant to this Appendix shall be made as specified in Section 12 of
the Agreement save that such notice or demand:

 

(a)                                  if given to the
Secured Party, shall be given to or made in accordance with the following
details:-

 

19

 

	
  Address:

  	
   

  	
  One Cabot Square, London E14 4QJ England

  
	
  Telephone:

  	
   

  	
  0207 883 8083

  
	
  Facsimile:

  	
   

  	
  0207 883 7987

  
	
  Telex:

  	
   

  	
  264521

  	
   

  	
  Answerback:

  	
   

  	
  CSFBIG

  
	
  Swift:

  	
   

  	
  CSFP GB 2L

  
	
  Attention:

  	
   

  	
  CSFBi Operations Settlements

  

 

or in accordance with such other details as the Secured Party may from
time to time notify (in acordance with the terms of this Paragraph 17) to the
Pledgor; and

 

(b)                                 shall be deemed to be
effective at the time such notice is actually received unless such notice is
received on a day which is not a Banking Day, or after 4.00 p.m. London time on
any Banking Day, in which event such notice shall be deemed to be effective at
9.00 a.m. London time on the next succeeding Banking Day.

 

18.                                 Documentation and Inconsistency:

 

The parties agree to execute a collateral agreement (or such other of
documentation as Party A deems appropriate) in the form provided by Party A,
subject to good faith negotiation, as an appendix to the Agreement

 

20

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00062-of-00352.parquet"}]]