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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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SCHEDULE 13D
Under the Securities Exchange Act of 1934
(Amendment No. 10)*
Center Trust, Inc.
(formerly, Center Trust Retail Properties, Inc.;
formerly, Alexander Haagen Properties, Inc.)
(Name of Issuer)
Common Stock, Par Value $.01 Per Share
(Title of Class of Securities)
40443E100
(CUSIP Number)
Marjorie L. Reifenberg, Esq. With a copy to
Prometheus Western Retail, LLC Kevin J. Grehan, Esq.
Prometheus Western Retail Trust Cravath, Swaine & Moore
LF Strategic Realty Investors L.P. 825 Eighth Avenue
Lazard Freres Real Estate Investors L.L.C. New York, New York 10019
30 Rockefeller Plaza (212) 474-1490
New York, NY 10020
(212) 632-6000
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
May 19, 1999
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule
13G to report the acquisition which is the subject of this Schedule 13D, and
is filing this schedule because of ss.ss. 240.13d-1(e), 240.13d-1(f) or
240.13d-1(g), check the following box |_|.
NOTE: Schedules filed in paper format shall include a signed
original and five copies of the schedule, including all exhibits. See ss.
240.13d-7(b) for other parties to whom copies are sent.
* The remainder of this cover page shall be filled out for a
reporting person's initial filing on this form with respect to the subject
class of securities, and for any subsequent amendment containing information
which would alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall
not be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, see the Notes).
Continued on following pages
Page 1 of 62 pages
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<PAGE>
Page 2 of 62 Pages
SCHEDULE 13D
CUSIP No. 40443E100
1 Name of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only).
Prometheus Western Retail, LLC
2 Check the Appropriate Box If a Member of a Group (a) |_|
(See Instructions) (b) |X|
3 SEC Use Only
4 Source of Funds (See Instructions)
OO
5 Check If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) ___
6 Citizenship or Place of Organization
Delaware
Number of Shares 7 Sole Voting Power
Beneficially Owned by Each 0 shares of Common Stock
Reporting Person with
8 Shared Voting Power
15,666,666 shares of Common Stock
9 Sole Dispositive Power
0 shares of Common Stock
10 Shared Dispositive Power
15,666,666 shares of Common Stock
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,666,666 shares of Common Stock
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) __
13 Percent of Class Represented by Amount in Row (11)
60% based on the number of shares of Common Stock outstanding on
August 13, 1999
14 Type of Reporting Person (See Instructions)
OO
<PAGE>
Page 3 of 62 Pages
SCHEDULE 13D
CUSIP No. 40443E100
1 Name of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only).
Prometheus Western Retail Trust
2 Check the Appropriate Box If a Member of a Group (a) |_|
(See Instructions) (b) |X|
3 SEC Use Only
4 Source of Funds (See Instructions)
AF, OO
5 Check If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) ___
6 Citizenship or Place of Organization
Maryland
Number of Shares 7 Sole Voting Power
Beneficially Owned by Each 0 shares of Common Stock
Reporting Person with
8 Shared Voting Power
15,666,666 shares of Common Stock
9 Sole Dispositive Power
0 shares of Common Stock
10 Shared Dispositive Power
15,666,666 shares of Common Stock
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,666,666 shares of Common Stock
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) __
13 Percent of Class Represented by Amount in Row (11)
60% based on the number of shares of Common Stock outstanding on
August 13, 1999
14 Type of Reporting Person (See Instructions)
OO
<PAGE>
Page 4 of 62 Pages
SCHEDULE 13D
CUSIP No. 40443E100
1 Name of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only).
LF Strategic Realty Investors L.P.
2 Check the Appropriate Box If a Member of a Group (a) |_|
(See Instructions) (b) |X|
3 SEC Use Only
4 Source of Funds (See Instructions)
AF, OO
5 Check If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) ___
6 Citizenship or Place of Organization
Delaware
Number of Shares 7 Sole Voting Power
Beneficially Owned by Each 0 shares of Common Stock
Reporting Person with
8 Shared Voting Power
15,666,666 shares of Common Stock
9 Sole Dispositive Power
0 shares of Common Stock
10 Shared Dispositive Power
15,666,666 shares of Common Stock
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,666,666 shares of Common Stock
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) __
13 Percent of Class Represented by Amount in Row (11)
60% based on the number of shares of Common Stock outstanding on
August 13, 1999
14 Type of Reporting Person (See Instructions)
PN
<PAGE>
Page 5 of 62 Pages
SCHEDULE 13D
CUSIP No. 40443E100
1 Name of Reporting Persons. I.R.S. Identification Nos. of Above Persons
(entities only).
Lazard Freres Real Estate Investors L.L.C.
2 Check the Appropriate Box If a Member of a Group (a) |_|
(See Instructions) (b) |X|
3 SEC Use Only
4 Source of Funds (See Instructions)
AF, OO
5 Check If Disclosure of Legal Proceedings Is Required
Pursuant to Items 2(d) or 2(e) ___
6 Citizenship or Place of Organization
New York
Number of Shares 7 Sole Voting Power
Beneficially Owned by Each 0 shares of Common Stock
Reporting Person with
8 Shared Voting Power
15,666,666 shares of Common Stock 1
9 Sole Dispositive Power
0 shares of Common Stock
10 Shared Dispositive Power
15,666,666 shares of Common Stock 1
11 Aggregate Amount Beneficially Owned by Each Reporting Person
15,666,666 shares of Common Stock 1
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares
(See Instructions) __
13 Percent of Class Represented by Amount in Row (11)
60% based on the number of shares of Common Stock outstanding on
August 13, 1999
14 Type of Reporting Person (See Instructions)
OO
- -------------
1 Lazard Freres Real Estate Investors L.L.C. disclaims beneficial
ownership of any of the shares of Common Stock reported in this Schedule 13D.
<PAGE>
Page 6 of 62 Pages
This Amendment No. 10 is filed by Prometheus Western Retail, LLC, a
Delaware limited liability company ("Prometheus"), Prometheus Western Retail
Trust, a Maryland real estate investment trust ("Trust"), LF Strategic Realty
Investors L.P., a Delaware limited partnership ("LF Realty"), and Lazard
Freres Real Estate Investors L.L.C., a New York limited liability company
("LFREI", and together with Prometheus, Trust and LF Realty, the "Reporting
Persons"). Capitalized terms used herein but not defined shall have the
meanings ascribed thereto in the Schedule 13D dated June 10, 1997, as amended,
filed by Prometheus and LF Realty (as amended, the "Initial Schedule 13D").
As previously reported in the Initial Schedule 13D, pursuant to a
Stock Purchase Agreement dated as of June 1, 1997, by and among Prometheus, LF
Realty and Center Trust, Inc. ("Center Trust") (formerly Center Trust Retail
Properties, Inc., formerly Alexander Haagen Properties, Inc.), subject to the
terms and conditions thereof, Prometheus agreed to purchase and Center Trust
agreed to sell 15,666,666 shares of common stock, par value $.01 per share, of
Center Trust (the "Common Stock"). The Initial Schedule 13D is amended as
follows:
Item 2. Identity and Background.
(a), (b), (c) and (f). The name, business address and principal
occupation or employment of the executive officers of Trust and LFREI are set
forth on Schedule I hereto and incorporated by reference herein. LFREI is a
New York limited liability company. Each person noted on such Schedule I is a
citizen of the United States other than Douglas N. Wells, who is a Canadian
citizen. Prometheus and LF Realty have no officers.
(d) and (e). To the best knowledge of the Reporting Persons, during
the last five years none of the persons listed in Schedule I hereto (i) has
been convicted in a criminal proceeding (excluding traffic violations or
similar misdemeanors) or (ii) has been a party to any civil proceeding of a
judicial or administrative body of competent jurisdiction, and is or was, as a
result of such proceeding, subject to a judgment, decree or final order
enjoining future violations of, or prohibiting or mandating activities subject
to, federal or state securities laws, or finding any violation with respect to
such laws.
Item 3. Source and Amount of Funds or Other Consideration.
On May 19, 1999, Prometheus utilized approximately $33,903,480 in
proceeds from its facility with Merrill Lynch International and Merrill Lynch
International Bank Limited (the "Borrowing") pursuant to the terms of a letter
agreement and terms sheet dated as of May 27, 1998, as amended on June 30,
1999 (the "Facility") to fund the purchase of 2,260,232 additional shares of
Common Stock at a price of $15 per share in accordance with the terms of the
Stock Purchase Agreement. The interest rate payable by Prometheus with respect
to the Borrowing is a floating annual rate equal to 1.75% per annum above the
London Interbank Offered Rate as determined by Merrill Lynch International
Bank Limited. Prometheus pays accrued and unpaid interest on the Borrowing
monthly in arrears. According to the terms of an agreement that extended the
maturity date of the Borrowing, the principal amount of and any accrued and
unpaid interest on the Borrowing must be repaid in full not later than
September 30, 1999. The Borrowing is secured by approximately 13,406,434
shares of the Common Stock owned
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Page 7 of 62 Pages
by Prometheus and is guaranteed by Trust and LF Realty pursuant to Guarantees
executed at the same time as the Facility (the "Guarantees").
The foregoing discussion of the Facility, the amendment thereto, and
the Guarantees is qualified in its entirety by the full text of such
agreements, copies of which are attached hereto as Exhibits 7, 9, 10, 11, 12
and 13, respectively, and are incorporated by reference herein. See also Item
6.
Item 5. Interest in Securities of the Issuer.
(a). As of the date of this Amendment, Prometheus, Trust and LF
Realty have beneficial ownership of 15,666,666 shares of Common Stock. Such
shares represent 60% of the issued and outstanding shares of the Company, as
of August 13, 1999. LFREI disclaims beneficial ownership of any of the shares
of Common Stock reported in this Schedule 13D.
(b). Prometheus, Trust, LF Realty and LFREI have shared voting and
shared dispositive power with respect to 15,666,666 shares of Common Stock,
subject to the terms of the Stockholders Agreement.
(c). On May 19, 1999, in a Subsequent Closing made pursuant to the
Stock Purchase Agreement, Prometheus purchased an additional 2,260,232 shares
of Common Stock at a price of $15 per share.
Item 6. Contracts, Arrangements, Understandings or
Relationships with Respect to Securities of
the Issuer.
At the same time that Prometheus obtained the Facility, Prometheus
also entered into a Custodian Agreement with MLI (the "Custodian Agreement").
Pursuant to the terms of the Custodian Agreement and as contemplated by the
Facility, MLI set up a collateral account (the "Collateral Account") to hold
shares of Common Stock purchased by Prometheus. There are currently 13,406,434
shares of Common Stock in the Collateral Account. Under the terms of the
Custodian Agreement, MLI collects, on behalf and for the account of
Prometheus, all income and other payments and distributions in respect of the
shares of Common Stock deposited with MLI. In addition, upon the receipt of
specific instructions from Prometheus, MLI may exercise voting rights with
respect to or sell the shares of Common Stock deposited with MLI. MLI has a
general lien on all shares of Common Stock held by it as security for the
obligations of Prometheus under the Custodian Agreement for amounts becoming
due or owing for safekeeping and administration. If Prometheus fails to
discharge any of its obligations under the Custodian Agreement when due, MLI
is entitled to sell the Common Stock held by it and apply the proceeds of such
sale towards the discharge of such obligations.
Pursuant to the terms of the Facility, Prometheus has pledged in
favor of MLI, for itself and as trustee for MLIB, all of Prometheus's right,
title and interest in and to the shares of Common Stock held in the Collateral
Account, any other shares of Common Stock acceptable to MLI, and all
dividends, distributions and interest on and other proceeds of such Common
Stock. During the term of the Facility and until Prometheus's obligations
under the Facility have been paid in full (i) none of the monies from time to
time standing to the credit of the Collateral Account may be withdrawn,
<PAGE>
Page 8 of 62 Pages
assigned or otherwise disposed of or encumbered except with MLI's prior
written consent or as otherwise specifically provided in the Facility and (ii)
Prometheus may not create or have outstanding any call option, pledge,
assignment, transfer, hypothecation, mortgage, charge, encumbrance, security
interest or lien on or affecting any of the shares of Common Stock credited to
the Collateral Account except with MLI's prior written consent or as
contemplated by the Facility or the Custodian Agreement. The Facility also
provides that where MLI wishes to use shares of Common Stock held as
collateral for any purpose, such shares of Common Stock shall be
simultaneously released from the security created pursuant to the Facility and
the full legal and beneficial right, title and interest in and to such shares
shall be transferred to MLI.
All references to the Custodian Agreement, the Facility and the
amendments thereto are qualified in their entirety by the full text of such
agreements, copies of which are attached hereto as Exhibits 7, 8, 11, 12 and
13, respectively, and are incorporated by reference herein. See also Item 3.
Item 7. Materials to be Filed as Exhibits.
Exhibit 7 -- Letter and Terms Sheet Agreement dated as of May 27,
1998 between Merrill Lynch International, Merrill Lynch
International Bank and Prometheus Western Retail, LLC.
Exhibit 8 -- Custodian Agreement dated as of May 27, 1998
between Merrill Lynch International and Prometheus
Western Retail, LLC.
Exhibit 9 -- Guarantee of LF Strategic Realty Investors to Merrill
Lynch International.
Exhibit 10 -- Guarantee of Prometheus Western Retail Trust to Merrill
Lynch International.
Exhibit 11 -- Letter dated June 30, 1999 from Merrill Lynch
International extending the termination date of the
Letter Agreement and related Terms Sheet dated as of
May 27, 1998.
Exhibit 12 -- Letter dated August 31, 1999 from Merrill Lynch
International extending the termination date of the
Letter Agreement and related Terms Sheet dated as of
May 27, 1998.
Exhibit 13 -- Letter dated September 15, 1999 from Merrill
Lynch International extending the termination date of
the Letter Agreement and related Terms Sheet dated as
of May 27, 1998.
<PAGE>
Page 9 of 62 Pages
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete
and correct.
Dated: September 27, 1999
PROMETHEUS WESTERN RETAIL, LLC,
by Prometheus Western Retail Trust,
its managing member,
by /s/ John A. Moore
Name: John A. Moore
Title: Chief Financial Officer
PROMETHEUS WESTERN RETAIL TRUST,
by /s/ John A. Moore
Name: John A. Moore
Title: Chief Financial Officer
LF STRATEGIC REALTY INVESTORS L.P.
by Lazard Freres Real Estate
Investors L.L.C., its general
partner,
by /s/ John A. Moore
Name: John A. Mooree:
Title: Principal and Chief
Financial Officer
LAZARD FRERES REAL ESTATE INVESTORS L.L.C.
by /s/ John A. Moore
Name: John A. Moore
Title: Chief Financial Officer
<PAGE>
Page 10 of 62 Pages
INDEX TO EXHIBITS
Exhibit No. Description Page
7 Letter Agreement and Terms 13
Sheet dated as of May 27,
1998 among Merrill Lynch
International, Merrill Lynch
International Bank and
Prometheus Western Retail,
LLC.
8 Custodian Agreement dated 41
as of May 27, 1998 between Merrill Lynch
International and Prometheus Western
Retail, LLC.
9 Guarantee of LF Strategic 49
Realty Investors to Merrill
Lynch International.
10 Guarantee of Prometheus 55
Western Retail Trust to
Merrill Lynch International.
11 Letter dated June 30, 1999 60
from Merrill Lynch
International extending the
termination date of the Letter
Agreement and related
Terms Sheet dated as of
May 27, 1998.
12 Letter dated August 31, 1999 61
from Merrill Lynch
International extending the
termination date of the Letter
Agreement and related
Terms Sheet dated as of
May 27, 1998
13 Letter dated September 15, 62
1999 from Merrill Lynch
International extending the
termination date of the Letter
Agreement and related
Terms Sheet dated as of
May 27, 1998.
<PAGE>
Page 11 of 62 Pages
SCHEDULE I
The following is a list of the principals and executive officers of
Trust and LFREI on the date hereof, setting forthe the present and principal
occupation for each such person and the corporation or other organization in
which such employment is conducted. The office is held by each executive
officer at Trust is also listed. The business address of each such person is
30 Rockefeller Plaza, New York, NY 10020.
TRUST
Name Office Present and Principal Occupation
Matthew J. Lustig President of Trust. Managing Director of Lazard
Freres & Co. LLC; Head of Real
Estate Investment Banking Group
at Lazard Freres & Co. LLC.
Mark S. Ticotin Vice President of Chief Operating Officer of
Trust. LFREI.
John A. Moore Vice President and Principal and Chief Financial
Chief Financial Officer of LFREI.
Officer of Trust.
Majorie L. Reifenberg Secretary of Trust. Principal, General Counsel and
Secretary of LFREI.
Anthony E. Meyer Vice President of Principal of LFREI.
Trust.
Henry C. Herms Treasurer of Trust. Controller of LFREI.
<PAGE>
Page 11 of 62 Pages
LFREI
Name Present and Principal Occupation
Robert C. Larson 1 Managing Director of Lazard Freres &
Co. LLC and Chairman of LFREI.
Michael G. Medzigian 1 Managing Director of Lazard Freres &
Co. LLC and Chief Executive Officer of
LFREI.
Mark S. Ticotin Chief Operating Officer of LFREI.
John A. Moore Principal and Chief Financial Officer
of LFREI.
Marjorie L. Reifenberg Principal, General Counsel and
Secretary of LFREI.
Anthony E. Meyer Principal of LFREI.
Klaus P. Kretschmann Principal of LFREI.
Douglas T. Healy Principal of LFREI.
Douglas N. Wells Vice President of LFREI.
Paul A. Froning Vice President of LFREI.
Ellery W. Roberts Vice President of LFREI.
Gregory L. Weinberger Vice President of LFREI.
Henry C. Herms Controller of LFREI.
_________________________
1 Neither Robert C. Larson nor Michael G. Medzigian was a principal or an
executive officer of LFREI on the date of the event that requires filing of
this Statement on Schedule 13D. On the date of the event that requires filing
of this Statement on Schedule 13D Matthew J. Lustig was Chief Executive Officer
of LFREI.
<PAGE>
Page 13 of 62 Pages
EXHIBIT 7
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Telephone: 0171-772 1000
Telex: 9413941
Fax: 0171-772 2917/2980
Merrill Lynch
May 27,1998
Prometheus Western Retail LLC
c/o Lazard Freres
30 Rockefeller Plaza
63rd Floor
New York, NY 10020
USA
Dear Sirs,
We write to set out the terms and conditions on which Merrill Lynch
International ("MLI") and Merrill Lynch International Bank Limited ("MLIB")
offer revolving facilities (the "Facilities") to Prometheus Western Retail LLC
(the "Borrower") under which until further notice from MLI:-
(A) MLI makes available a credit facility, under which MLI is prepared to
consider making to the Borrower cash advances (each such advance to
"Advance") up to a maximum principal amount of US$65,000,000 or
equivalent in other currencies at any one time outstanding
(B) Advances will be secured initially by at least 6,700,000 shares of
Alexander Haagen Properties (ACH) - increasing to approximately
10,700,000 shares by June 30th 1998. (the "Collateral")
(C) New and incremental Advances will not exceed 45% of the market value
of the collateral (i.e. initial and maintenance margin requirement of
55%).
(D) The facility shall terminate on December 31st 1998.
(E) MLI makes available such other facilities as MLI and the Borrower may
from time to time agree
all on the security of, among other things, the collateral provided by the
Borrower as set out in the Terms Sheet referred to below.
The spread tor the purposes of the Facilities shall be 1.75% per annum.
<PAGE>
Page 14 of 62 Pages
The Facilities are subject to the terms and conditions set out in the attached
Terms Sheet, and by its execution of the enclosed copy of this letter, the
Borrower acknowledges receipt of the Terms Sheet and agrees to the terms and
conditions set out in it.
Registered in England (No. 2312079)
Registered Office: 25 Ropemaker Street, London EC2Y 9LY
A Subsidiary of Merrill Lynch & Co. Inc., Delaware, U.S.A.
Regulated by The Securities and Futures Authority Limited
Member of the London Stock Exchange
<PAGE>
Page 15 of 62 Pages
MERRILL LYNCH INTERNATIONAL
TERMS SHEET
1 Definitions
In this Agreement:
"Base Rate" means the floating annual rate equal to the rate of
interest as quoted to MLI determined by MLIB to be its base rate,
being calculated by reference to a weighted average of rates on the
second Business Day before the first Business Day of each week at
which MLIB offers deposits in the relevant currency in the London
inter-bank market for terms of one night, one week and one month, or
if at any time such base rate does not accurately reflect the cost to
MLI of funding the relevant Advance or other amount, the floating
annual rate certified by MLI to be equal to its cost of funding at
the relevant time (Base Rate to change when and as the applicable
floating annual rate changes)
"Business Day" means a day on which (1) Dollar deposits may be dealt
in on the London inter-bank market, (2) if the context so requires,
deposits in any other relevant currency may be dealt in on the London
inter-bank market, (3) banks are open in London and New York City
and, if the context so requires, the principal financial center of
the country of each other relevant currency (or, in relation to ECU,
those banks which operate a clearing system in ECU will clear
payments in ECU through that clearing system), and (4) if the context
so requires, the exchange or settlement system through which
Securities are to be loaned, transferred or redelivered or Equivalent
Securities are to be returned is open to settle such transfer
"Collateral" means all Securities, including any certificates and
documents of or evidencing title to the same (and the claim
represented thereby) and cash balances (and the debt represented
thereby) in or credited to the Collateral Account all right, title
and interest in and to which are, to the satisfaction of MLI subject
to the security created by or pursuant to this Agreement
"Collateral Account" means the one or more accounts, having such
designations as MLI may determine, opened or to be opened by MLI
pursuant to, or used for the purposes of, the Facilities for the
Borrower with the Custodian or any other person (including MLIB or
any other member of the Merrill Lynch Group) chosen by MLI in respect
of Collateral, all such Collateral Accounts to be maintained under
the complete discretion of MLI
"Custodian" means MLI in its capacity as such under the Custodian
Agreement
"Custodian Agreement" means the Custodian Agreement between MLI and the
Borrower, as amended from time to time
"Dollar(s)" and "$" means lawful currency of the United States of
America
"ECU" means European Currency Units, being units of account for the
time being used in the European Monetary System
<PAGE>
Page 16 of 62 Pages
"Equivalent Securities" or "Securities equivalent to" means
securities of an identical type, nominal value, description and
amount to particular Securities the subject of a Securities Loan or,
as the case may be, a utilisation under Clause 13 (including any
certificates and other documents of or evidencing title to the
same). If and to the extent that such Securities are partly paid and
a call is made or have been converted, subdivided, consolidated,
redeemed, made the subject of a takeover, merger, capitalization
issue, rights issue or similar, the Equivalent Securities shall be
as accordingly determined by MLI
"Hedging Contract" means any contract entered into by the Borrower
and designated as such by the Borrower and MLI by exchange of
letters substantially in the form set out in Schedule 1
"Letter" means the cover letter to, and forming part of, this
Agreement
"Merrill Lynch Group" means Merrill Lynch & Co., Inc. together with
any company (whether now existing or hereafter formed) of which
Merrill Lynch & Co., Inc. is or becomes a Subsidiary and all
companies (whether now existing or hereafter formed or acquired)
which are Subsidiaries of Merrill Lynch & Co., Inc. or any such
company including, but not limited to, Merrill Lynch, Pierce, Fenner
& Smith Incorporated, and any partnership, association, firm or other
organisation (whether now existing or hereafter formed or acquired)
which is owned or controlled (whether directly or indirectly and
whether by the ownership of share capital, possession of voting power,
contract or otherwise) by Merrill Lynch & Co., Inc. and/or any such
company and/or one or more of their Subsidiaries including, but not
limited to, Merrill Lynch International & Co.
"Secured Liabilities" means all the Borrower's liabilities under or
in connection with this Agreement, including any Advances,
Securities Loans, FX Transactions and Guarantees (including amounts
payable under Clause 5.2)
"Securities" includes all investments, as defined in the Financial
Services Act 1986 (as amended or re-enacted from time to time) and
physical commodities (or any certificates or documents of or
evidencing title to any of the same), in each case acceptable to MLI
"Subsidiary" means at any time, in relation to a company, any other
company which is directly or indirectly controlled, or more than 50%
of whose issued or outstanding shares or stock having general voting
power in ordinary circumstances is beneficially owned directly or
indirectly, by that first company.
In this Terms Sheet, references to the "Agreement" or "this
Agreement" mean and include (1) the Letter, (2) this Terms Sheet,
(3) all letters (if any) exchanged in respect of Hedging Contracts
and (4) all confirmations (if any), all as amended and supplemented
from time to time, and it is acknowledged and agreed that all
Advances and Securities Loans are made, all FX Transactions are
entered into, and all Guarantees are issued, in reliance on the fact
that this Agreement forms a single agreement between the parties,
and that the parties would not otherwise make or do any of the
foregoing.
Headings shall be ignored in construing this Agreement.
<PAGE>
Page 17 of 62 Pages
2 Credit Facility
2.1 Drawdown: Without prejudice to (A) any other requirements of MLI in
relation to any Advance, and (B) MLI's right to refuse to make an
Advance in its absolute discretion, Advances will be made as follows:
2.1.1 the Borrower may give to MLI notice satisfactory to MLI not
later than 2 p.m. (London time) on the first (in the case of a
Dollar Advance) or (in any other case) third Business Day
before the proposed date (which must itself be a Business Day)
of the relevant Advance requesting the Advance of all or part
of the unused portion of the Facilities or
2.1.2 the Borrower hereby requests and authorises MLI to make
Advances (without any further request by the Borrower) for the
purposes of financing the payment by the Custodian on behalf of
the Borrower pursuant to the Custodian Agreement for Securities
purchased by the Borrower, to reimburse MLI or, as the case may
be, MLIB in accordance with Clause 5.2 for any payment which
has been made by it pursuant to a Guarantee, and for such other
purposes as may be agreed by the Borrower and MLI from time to
time.
For this purpose, the unused portion of the Facilities at any date is
the amount specified in paragraph (A) of the Letter less the
aggregate Dollar equivalent (as determined by MLI as at that date) of
all outstanding Advances.
2.2 Repayment: The Borrower may, if it gives MLI not less than one
Business Day's notice (in the case of a Dollar Advance) or (in any
other case) three Business Days' notice (which shall be irrevocable)
repay any Advance at any time, except that any Advance which has a
fixed Interest Period shall be repaid (and shall, subject as
otherwise provided in this Agreement, only be repaid) on the last day
of that fixed Interest Period. Any such repayment must be accompanied
by interest accrued on the amount repaid.
In addition, the Borrower hereby requests and authorises MLI to apply
funds made available to it by the Custodian pursuant to the Custodian
Agreement in or towards repayment of any Advances (or any other
amount debited to the Collateral Account) in the same currency. Funds
so received which cannot be so applied will be credited to the
Collateral Account.
2.3 Interest: Interest shall be calculated on the outstanding principal
amount from time of each Advance at the rate per annum equal to the
sum of the Spread specified in the Letter and Base Rate. The Borrower
shall pay the unpaid interest accrued on each Advance monthly in
arrears in the currency in which the relevant Advance is denominated.
However, if MLI and the Borrower so agree in relation to an Advance,
that Advance shall have a fixed Interest Period (and shall be repaid
accordingly) and shall bear interest at the rate agreed between MLI
and the Borrower for such Advance. The Borrower shall pay the unpaid
interest accrued on any such Advance in arrears on
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the last day of the Interest Period for which it was made and in the
currency in which the relevant Advance is denominated.
3 Securities Lending Facility
3.1 Making: MLI shall be entitled but not bound to act on the request of
the Borrower to make a Securities Loan to the Borrower.
A Securities Loan shall be effected by MLI delivering or crediting
the relevant Securities in accordance with the Borrower's
instructions, together with any appropriate instruments of transfer
or the like.
3.2 Return: The Borrower shall return Securities equivalent to the
Securities the subject of a Securities Loan by delivering or
crediting those Equivalent Securities in accordance with MLI's
instructions:
3.2.1 in accordance with the terms of the request for that Securities
Loan or
3.2.2 if earlier, upon notice from MLI of not less than the
standard settlement time for those Equivalent Securities
according to the exchange or settlement system through which
the Securities the subject of the relevant Securities Loan
were originally delivered.
All returns of Equivalent Securities must be made together with any
appropriate instruments of transfer or the like, and so that all
right, title and interest in and to those Equivalent Securities shall
vest in MLI, free from all liens, charges and encumbrances.
3.3 Interest and Dividends: Where a Securities Loan is outstanding over
an income payment date or a record date for the relevant Securities,
the Borrower shall, on the date of the payment or distribution of any
interest, dividend or other distribution of any kind whatsoever (each
a "Distribution") on or with respect to any Securities the subject of
a Securities Loan, or on such other date as MLI and the Borrower may
from time to time agree (the "Relevant Payment Date") pay and deliver
a sum of money or property equivalent to the same (with any such
endorsements or assignments as shall be customary and appropriate to
effect the delivery) to MLI, irrespective of whether the Borrower
received the same. In the case of any Distribution comprising a
payment, unless agreed otherwise:
3.3.1 where and to the extent that MLI has funded a Securities Loan
with Securities borrowed by MLI under a securities loan from a
third party, the Borrower shall pay such amount and deliver
such tax vouchers as may be relevant and appropriate so as to
enable MLI (out of those payments/tax vouchers paid/delivered
by the Borrower under this Clause 3.3) to meet its own
obligations to pay amounts and/or deliver tax vouchers to the
third party in respect of those same Distributions under the
securities loan from the third party to MLI, and after taking
account of all taxes of whatever nature arising in connection
with either the payments from the Borrower to MLI under this
Clause 3.3 or the payments from MLI to the third party and
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3.3.2 where and to the extent MLI has funded a Securities Loan with
Securities from MLI's own books, the Borrower shall pay to MLI
such amount and deliver such tax vouchers as may be relevant
and appropriate as shall ensure that MLI is placed in the same
after tax position (including for these purposes and for the
avoidance of doubt any taxation arising under paragraph 4(3) of
Schedule 23A of the Income and Corporation Taxes Act 1988 and
associated provisions concerning manufactured payments, but
ignoring any taxation by reference to MLI's general profits) as
if MLI had been the Holder of the relevant Securities at all
relevant times. For the purposes of this Clause 3.3.2 "Holder"
in relation to registered securities means the person whose
name or whose nominee is shown on the relevant register of
ownership and in relation to bearer Securities means the bearer
thereof.
3.4 Fees: The Borrower shall pay such fees in respect of Securities Loans
as shall be agreed with MLI from time to time. Such fees shall be
payable monthly in arrears.
3.5 Title: Notwithstanding the use of expressions such as "Securities
Loan", "Borrower", "loan", "loaned", "borrowed", "return" and
"returned" which are used in relation to Securities Loans to reflect
market terminology, title to Securities the subject of a Securities
Loan shall pass to the Borrower, and the Borrower shall be obliged to
return Equivalent Securities.
3.6 Rights and Remedies: It is agreed in relation to legal proceedings
that neither party will seek specific performance of the other's
obligation to deliver, redeliver, credit or return Securities or
Equivalent Securities, but without prejudice to any other rights it
may have.
4 Foreign Exchange Facility
4.1 Entry Into: MLIB shall be entitled but not bound to act on the
request of the Borrower to enter into an FX Transaction.
4.2 Payments: MLIB and the Borrower shall each make each payment to be
made by it in accordance with the terms of each FX Transaction, but
subject to the other provisions of this Agreement. Each amount
payable by MLIB shall be paid by it direct into the Collateral
Account.
5 Guarantee Facilities
5.1 Issue: Either MLI or MLIB (in this Clause 5 and Clause 7 and in
relation to a Guarantee provided by it, each an "Issuer") shall be
entitled but not bound to act on the request of the Borrower to
provide a Guarantee.
5.2 Indemnity: The Borrower hereby unconditionally and irrevocably:
5.2.1 agrees on demand to indemnify the Issuer of any Guarantee from
and against any and all actions, proceedings, costs, claims,
demands, damages, expenses, losses, charges and liabilities
which may be brought, made or
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preferred against the Issuer or which the Issuer may suffer, incur
or sustain in relation to or arising out of its providing any
Guarantee (including (A) any payment(s) which may be payable by or
claimed or demanded from the Issuer pursuant to a Guarantee, and (B)
any taxes required to be paid by the Issuer on account of which it
makes any deduction or withholding from any such payment) together
with interest on all such amounts from the date(s) on which the same
are incurred by the Issuer in accordance with Clause 8.2
5.2.2 authorises the Issuer to rely without further enquiry on
documents presented under any Guarantee which appear on their
face to be in compliance with the terms and conditions of that
Guarantee (for which purpose the Issuer shall apply the same
standards and have the same protections as set out in the
Uniform Customs and Practice for Documentary Credits (1993
Revision, ICC Publication No. 500 or its subsequent revisions))
and on first claim or demand to make any payment which may or
may appear to be claimed or demanded from the Issuer in relation
to or arising out of any Guarantee without requiring or obtaining
any evidence or proof that the amount claimed or demanded is due
and payable and without any notice or reference to or the
agreement of or further authority from the Borrower and
5.2.3 agrees that any payment which the Issuer shall make in
accordance or purported accordance with a Guarantee shall be
binding on the Borrower and shall be accepted by the Borrower
as conclusive evidence of the Issuer's liability to make such
payment.
5.3 Fees: The Borrower shall pay to the Issuer of any Guarantee such fees
in respect thereof and at such times as shall be agreed with the
Issuer from time to time.
6 Security
6.1 Charging Provisions:
6.1.1 The Borrower, as continuing security for the due payment of
the Secured Liabilities and with full title guarantee, hereby
(A) pledges and charges by way of first fixed legal mortgage
(in priority to all other security whatsoever, whether fixed or
floating) in favour of MLI for itself and as trustee for MLIB
all the Borrower's right, title and interest in and to all
Securities and all related documents from time to time held by
or for the account or to the order of MLI (whether in its
capacity as Custodian under the Custodian Agreement or
otherwise) or in or credited to the Collateral Account and the
claims represented thereby (together, the "Charged Securities")
and (B) pledges and charges in favour of MLI for itself and as
trustee for MLIB all the Borrower's right, title and interest
in and to all monies, debts, claims, Securities and other
property whatsoever from time to time deposited with or held by
or for the account or to the order of or owed or owing by MLI,
MLIB and/or any other member of the Merrill Lynch Group, in
whatever capacity. The security created by or pursuant to this
Agreement shall affect and include all dividends, distributions
and interest on and other proceeds of the Charged Securities or
other property hereby pledged or charged, whether
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Page 21 of 62 Pages
capital or income, and all property distributed, paid, accruing
or offered at any time on, to, in respect of or in substitution
for, any of the Charged Securities or other property hereby
pledged or charged, and all of the foregoing which relate to
the Charged Securities shall be promptly paid or delivered to
MLI for credit to the Collateral Account
6.1.2 The Borrower, as continuing security for the due payment of
the Secured Liabilities and with full title guarantee, hereby
charges by way of first fixed legal mortgage (in priority to
all other security whatsoever, whether fixed or floating) in
favour of MLI for itself and as trustee for MLIB all monies
(and all the Borrower's right, title and interest in and to
such monies and the debt represented thereby) from time to time
standing to the credit of the Collateral Account, in whatever
currency, and including any interest accrued or accruing
thereon
6.1.3 The Borrower, as continuing security for the due payment of
the Secured Liabilities and with full title guarantee, hereby
assigns absolutely to MLI for itself and as trustee for MLIB
all its rights and benefits under or in connection with the
Custodian Agreement, the FX Transactions, utilisations of
Securities under Clause 13 and the Hedging Contracts, including
in particular all monies paid or payable in respect thereof, in
the case of FX Transactions whether in accordance with Clause
4.2 or 7 or otherwise, all securities delivered or deliverable
in respect thereof, and all other rights or benefits thereunder
or in connection therewith (together, the "Charged Rights").
Provided that, upon receipt from the Borrower of a request made
after termination of the Facilities and subject to the Secured
Liabilities having been duly and properly paid in full, MLI
shall at the expense of the Borrower re-assign to the Borrower
so much (if any) of the Charged Rights as then remains
6.1.4 None of the monies from time to time standing to the credit of
the Collateral Account (nor the Borrower's right, title and
interest in and to such monies) shall, during the continuance
of the Facilities and until the Secured Liabilities have been
duly and properly paid in full, be capable of being withdrawn,
assigned or otherwise disposed of or encumbered except with
MLI's prior written consent or as otherwise specifically
provided in this Agreement. Any such consent of MLI (and any
payment whether with or without such consent) shall operate as
a release of the relevant monies and the provisions of this
Agreement shall continue to apply to the Collateral Account and
the monies from time to time standing to the credit thereof.
6.1.5 The Borrower hereby undertakes to MLI for itself and as
trustee for MLIB that, at all times during the continuance of
the Facility and until the Secured Liabilities have been
properly and duly paid in full:
(i) it will on demand duly pay any calls, subscription monies
and/or other monies payable on or in respect of any of the
Charged Securities and will perform all obligations
undertaken by it under or in connection with Hedging
Contracts in accordance with their terms. If it does not
do so, MLI may (but shall not be obliged to) do
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Page 22 of 62 Pages
so and, if MLI does so, the Borrower shall on demand
indemnify MLI against such payment or performance and
(ii) it will not (nor will it agree, conditionally or
unconditionally, to) create or have outstanding any call
option, pledge, assignment, transfer, hypothecation,
mortgage, charge, encumbrance, security interest or lien
on or affecting any of the Charged Securities (except as
contemplated by this Agreement or the Custodian Agreement
or with MLI's prior written consent).
MLI and MLIB each acknowledge that the Borrower may request
consent to options, assignments and transfers (including
agreements therefor) on or of Charged Securities in the normal
course of its trading operations and MLI will consider any such
request in good faith.
6.1.6 Without prejudice to 6.1.4 above or Clause 11.2, each of MLI
and MLIB is authorised to debit the Secured Liabilities to any
account of the Borrower with MLI and MLI is authorised to
combine or consolidate such account with the Collateral Account
and/or set off, transfer or apply any monies standing to the
credit of the Collateral Account in or towards satisfaction of
any of the Secured Liabilities.
6.1.7 The security created by or pursuant to this Agreement shall be
a continuing security notwithstanding any intermediate payment
or settlement of account and, without prejudice to the
generality of the foregoing, shall continue in full force and
effect until MLI executes a formal release of such security,
which it may do in whole or from time to time in part, and any
withdrawal or other disposal of any of the property subject to
the security created by or pursuant to this Agreement shall
operate as a release of such property, and the provisions of
this Agreement shall continue to apply to the remainder
thereof. The security created by or pursuant to this Agreement
shall be in addition to and shall not prejudice any other
security, guarantee, indemnity, right or remedy of whatever
nature which MLI and/or MLIB may now or at any time have in
respect of any of the Secured Liabilities.
6.2 Further Assurance: The Borrower, at its own expense, will execute or
cause to be executed all such documents, and will do or cause to be
done all such things, which are reasonably requested by MLI (1) to
enable MLI for itself and as trustee for MLIB to enjoy, exercise or
enforce its rights as a secured party under the Facilities and (2) to
evidence, and to establish and maintain the perfection and first
priority of, MLI's security interest in the Charged Securities, the
Collateral Account (and the monies for the time being standing to the
credit thereof and the debt represented thereby) and the Charged
Rights and the perfection of MLI's security interest in the other
property hereby pledged or charged. Without limiting the generality
of the foregoing the Borrower, at its own expense, will execute and
give or file, or both, all notices and documents (including, but not
limited to, notice of the security created by or pursuant to this
Agreement) in such manner, to such persons and at such places as may
be reasonably requested by MLI to establish and maintain the
perfection and, as appropriate, first priority of MLI's said security
interest. The Borrower irrevocably and by way of security authorises
MLI, if the Borrower does
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Page 23 of 62 Pages
not do so, to take any step contemplated by this Clause 6.2 (but MLI
shall have no obligation to do so).
6.3 MLI's Responsibilities: Except as provided in the Custodian Agreement,
MLI shall at all times while any Collateral remains credited to the
Collateral Account use reasonable care in connection therewith but shall
not thereby be responsible for the value of the Collateral or the other
property hereby pledged or charged or, except to the extent otherwise
specifically agreed, for the collection or payment of any dividends,
distributions, interest or other receipts in respect of Charged
Securities, other property hereby pledged or charged or Hedging Contracts
or the delivery or receipt of any securities or other property in respect
of Hedging Contracts nor to ensure the taking up of any securities,
rights, monies or other property distributed, paid, accruing or offered
at any time on, to, in respect of or in substitution for any of the
Collateral or the other property hereby pledged or charged.
6.4 Value and Margin Calls: The Borrower hereby agrees that it will,
immediately upon MLI at any time making a request or delivering to the
Borrower (whether under this Agreement or in its capacity as Custodian
under the Custodian Agreement) a statement reflecting a shortfall in the
margin referred to below, deposit additional Securities acceptable to MLI
and/or monies with MLI for the credit of the Collateral Account as MLI
may require in order to ensure that the aggregate of the market value of
the Charged Securities and the monies standing to the credit of the
Collateral Account will at all times exceed by a margin satisfactory to
MLI the Secured Liabilities (all as determined by MLI).
6.5 Release: Until such time as an Event of Default as set out in Clause 10
occurs, and without prejudice to any other requirements of MLI, the
Borrower may at any time request MLI to release and reconvey to the
Borrower (or as it may direct) Charged Securities and/or monies standing
to the credit of the Collateral Account and, provided that the margin as
aforesaid after any such release or reconveyance would be satisfactory to
MLI, MLI will give effect to such request.
7 Cancelation and Repayment
7.1 General: The Borrower will (A) upon not less than 30 days' written notice
from MLI at any time or (B) after an Event of Default has occurred on
demand of MLI at any time or (C) after MLI has given written notice to
the Borrower that it has determined that it is or will become unlawful or
contrary to any directive or the like (whether or not having the force of
law) of any governmental of other regulatory body or authority for MLI
and/or MLIB to carry out all or any of its obligations under or in
connection with this Agreement on demand of MLI at any time:
7.1.1 repay to MLI all or any Advances then outstanding together with
accrued interest thereon and any other sum then payable under or in
connection with this Agreement and/or
7.1.2 return to MLI Securities equivalent to all or any Securities the
subject of any Securities Loan(s) and/or
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Page 24 of 62 Pages
7.1.3 close out through MLIB all or any FX Transactions which have not
been closed out by entering into a transaction for purchase or sale
(as the case may require) equal and opposite to the relevant FX
Transaction and having the same value date and otherwise matching
the relevant FX Transaction, so as to fix the amount of profit or
loss arising to the Borrower from the relevant FX Transaction (and
the parties' liabilities shall be adjusted accordingly) and/or
7.1.4 pay to the Issuer an amount (as conclusively determined by the
Issuer) equal to the Issuer's maximum outstanding liability (whether
actual or contingent) under all Guarantees provided by it. Without
prejudice to Clause 6 or any other provision of this Agreement any
amount so received by the Issuer in respect of its liability under
Guarantees may be retained by the Issuer for the purpose of payment
and/or paid in accordance with the relevant Guarantee
Upon the making of any such demand under (B) or (C) above the Facilities
shall be canceled and, on giving any notice under (A) above, MLI shall
have the option to cancel the Facilities by notice to the Borrower (but
in each case without prejudice to rights and obligations then existing).
7.2 Securities Loans: If the Borrower fails or is unable to MLI's
satisfaction to return any Securities equivalent to the Securities the
subject of a Securities Loan in accordance with any notice or demand
under 7.1.2 above or on such other date on which in accordance with this
Agreement it is obliged to do so, MLI shall have the right on the
Borrower's behalf to purchase from such source(s), at such time(s) and at
such price(s) as it thinks appropriate Equivalent Securities and the
Borrower shall on demand pay in the currency/ies specified by MLI to MLI
all amounts (including costs, expenses, commissions and taxes thereon)
incurred in connection with such purchase, together with interest on all
such amounts from the date(s) on which the same are incurred by MLI in
accordance with Clause 8.2. However, if for any reason MLI does not or is
unable to exercise such right, upon notice to the Borrower, the
Borrower's obligation to return the relevant Equivalent Securities will
be automatically replaced by an obligation on the Borrower to pay to MLI
an amount in cash equal to the market value of those Equivalent
Securities as derived from rates offered by a dealer reasonably chosen by
MLI or, if in MLI's reasonable belief that would not produce a
commercially reasonable result, the amount it would cost MLI to purchase
those Equivalent Securities, together with all costs, expenses,
commissions and taxes thereon which would be incurred in connection
therewith (such value or, as the case may be, amount and the currency to
be as determined by MLI).
7.3 FX Transactions: If the Borrower fails or is unable to MLI's satisfaction
to close out any FX Transaction in accordance with any notice or demand
under 7.1.3 above (an "Open Transaction"), MLIB shall have the right on
the Borrower's behalf to close out all or from time to time any part of
that Open Transaction at MLIB's
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applicable spot rate of exchange at the relevant time (and the parties'
liabilities shall be adjusted accordingly). However, if for any reason
MLIB does not or is unable to exercise its right to close out any Open
Transaction, upon notice to the Borrower:
7.3.1 no further payments by MLIB or the Borrower under that Open
Transaction shall be required to be made (and the obligations to
make any such payments shall be canceled) and
7.3.2 an amount of compensation (calculated by MLIB in accordance with
(i) to (iii) below) shall automatically become immediately due and
payable by the Borrower to MLIB (or, subject to the proviso in
Clause 11.1, vice versa):
(i) MLIB shall ascertain in relation to each Open Transaction as to
which notice was given to the Borrower in accordance with the
preceding paragraph on the date of such notice (the
"Calculation Date") the amount (if any) which would fall to be
paid to MLIB (expressed as a negative amount) or which would
have to be paid by MLIB (expressed as a positive amount) if it
were to enter into a transaction in the foreign exchange market
at or about 11 a.m. (London time) on that Calculation Date
which would have the effect of closing out that Open
Transaction.
(ii) If any such amount is in a currency other than Dollars, it
shall be converted into Dollars at the rate of exchange at
which, at or about 11 a.m. (London time) on the relevant
Calculation Date, MLIB could enter into a transaction on the
foreign exchange market to purchase or sell, as appropriate,
for delivery on the second Business Day after that Calculation
Date (whichever is later) that other currency in exchange for
Dollars.
(iii) MLIB shall then ascertain the difference between:
(a) the sum of the positive amounts ascertained under (i)
(each converted where applicable in accordance with (ii))
and
(b) the sum of the negative amounts ascertained under (i)
(each converted where applicable in accordance with (ii))
together with any costs and expenses arising as a result
of the operation of 7.3.1 above.
If the amount in (b) exceeds the amount in (a) the difference
shall be due and payable immediately by the Borrower to MLIB.
If the amount in (a) exceeds the amount in (b) the difference
shall be paid by MLIB direct into the Collateral Account or,
subject to the proviso in Clause 11.1, be due and payable by
MLIB to the Borrower,
It is agreed that the amount of compensation recoverable by a party
under this Clause 7.3 is a reasonable pre-estimate of loss in
respect of Open Transactions and not a penalty. Such amount is
payable for the loss of bargain and, except as otherwise provided in
this Agreement, neither MLIB nor the Borrower will be entitled to
recover additional damages as a consequence of such loss of bargain.
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Page 26 of 62 Pages
7.4 Margin Call not Required: Any action referred to in this Clause 7 may be
taken by MLI and/or MLIB without request for additional Securities or
monies by way of margin call.
8 Payments
8.1 Taxes: All sums payable by the Borrower under or in connection with this
Agreement shall be paid free and clear of any restrictions or conditions,
without set-off or counterclaim, and free and clear of, and (subject as
hereinafter provided) without deduction for, any taxes, deductions or
withholdings of any nature. If any deduction or withholding on account of
any such tax or other amount is required by law to be made from any such
sum, the Borrower shall pay in the same manner and at the same time such
additional amounts as will result in receipt by MLI or, as the case may
be, MLIB, free from any liability in respect of any such deduction or
withholding, of such amount as would have been received by it had no such
deduction or withholding been required to be made.
8.2 Default Interest: If the Borrower does not pay any sum payable under or
in connection with this Agreement when due, it shall pay interest on the
amount from time to time outstanding in respect of that overdue sum for
the period beginning on its due date and ending on the date of its
receipt by MLI or (as appropriate) MLIB (the "payee"), both before and
after judgment. Such interest shall be calculated from time to time at
the rate per annum equal to the sum of the Spread and the rate certified
by the payee as being equal to its cost of funding that overdue sum for
such period(s) as the payee may from time to time reasonably select. Such
interest shall be payable on demand. All interest payable under this
Clause 8.2 which is not paid when due shall be added to the overdue sum
and itself bear interest accordingly.
8.3 Non-Business Days: If any payment falls to be made on a day which is not
a Business Day, it shall be postponed so as to fall on the next
succeeding Business Day in the same calendar month (if there is one) or
the preceding Business Day (if there is not). Interest shall be adjusted
accordingly.
9 Warranties
The Borrower represents and warrants to and for the benefit of each of
MLI and MLIB that:
9.1 the Borrower is duly organised and validly existing under the laws of its
jurisdiction of establishment and has the power and authority to own its
assets and to conduct the business which it conducts
9.2 its entry into, exercise of its rights and/or performance of or
compliance with its obligations under this Agreement do not and will not
violate (1) any law to which it is subject, (2) any of its constitutional
documents or (3) any agreement to which it is a party or which is binding
on it or its assets
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9.3 it has the power to enter into, exercise its rights and perform and
comply with its obligations under this Agreement and has taken all
necessary action to authorise the execution, delivery and performance of
this Agreement
9.4 it will obtain and maintain in effect and comply with the terms of all
necessary consents, registrations and the like of or with any government
or other regulatory body or authority applicable to this Agreement
9.5 its obligations under this Agreement are valid, binding and enforceable
at law
9.6 it is not in default under any agreement to which it is a party or by
which it or its assets is or are bound and no litigation, arbitration or
administrative proceedings are current or pending, which default,
litigation, arbitration or administrative proceedings are material in the
context of this Agreement
9.7 it is not necessary or advisable in order to ensure the validity,
effectiveness, performance or enforceability of this Agreement or the
perfection of the security created by or pursuant to this Agreement that
any document be filed, registered or recorded in any public office or
elsewhere
9.8 except by this Agreement and the Custodian Agreement, it has not
assigned, transferred or otherwise disposed of the Collateral (or its
rights, title and interest to and in the Collateral) or its rights and
benefits under or in connection with the Custodian Agreement, the FX
Transactions and the Hedging Contracts, either in whole or in part, nor
agreed to do so, and will not at any time do so or agree to do so, and it
will at all times be the sole beneficial owner of and fully guarantee
title to all Collateral and rights and benefits which are now or may at
any time hereafter become subject to the security created by or pursuant
to this Agreement
9.9 except for the security created by or pursuant to this Agreement and the
Custodian Agreement, no mortgage, charge, pledge, lien or other
encumbrance or security of any kind exists on or over the Collateral (or
its right, title and interest in and to the Collateral) or its rights and
benefits under or in connection with the Custodian Agreement, the FX
Transactions and the Hedging Contracts, either in whole or in part, nor
has it agreed to create any such other security nor will it at any time
do so or agree to do so and
9.10 each of the above representations and warranties will be correct and
complied with in all respects during the continuance of the Facilities
and until all the Secured Liabilities have been duly and properly paid in
full, as if repeated then by reference to then existing circumstances.
10 Events of Default
it shall be an Event of Default if:
10.1 the Borrower does not pay any sum payable under or in connection with
this Agreement or any other agreement with MLI, MLIB or any other member
of the Merrill Lynch Group on its due date or
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10.2 the Borrower does not return any Equivalent Securities required to be
returned under this Agreement on their due date or
10.3 any representation, warranty or statement by the Borrower in this
Agreement or in any document delivered under this Agreement is not
complied with or is or proves to have been incorrect in any material
respect when made or, if it had been made on any later date by reference
to the circumstances then existing, would have been incorrect in any
material respect on that later date or
10.4 the Borrower does not comply with its obligations under Clause 6.4
promptly, which may in the circumstances at MLI's discretion be
immediately, and in any event not later than MLI's close of business on
the next Business Day after the shortfall occurs or
10.5 the Borrower fails duly to perform any one or more of its other
obligations under this Agreement or any other agreement with MLI, MLIB or
any other member of the Merrill Lynch Group and, other than in the case
of Clause 6.4, if, in MLI's opinion, that default is capable of remedy it
is not, in MLI's opinion, remedied within 15 days after notice of that
default has been given to the Borrower or
10.6 any provision of this Agreement which is material to the interests of MLI
and/or MLIB is not (or is claimed by the Borrower not to be) in full
force and effect and, other than in the case of Clause 6.4, if, in MLI's
opinion, such circumstance is capable of remedy it is not, in MLI's
opinion, remedied within 30 days after notice thereof has been given to
the Borrower or
10.7 the net assets represented by the Partner's Capital of LF Strategic
Realty Investors L.P. (the "Guarantor") is less than the sum of i)
$500mm; plus ii) the market value of Collateral or
10.8 MLI reasonably determines by written notice to the Borrower that the
security (in whole or in part) created by or pursuant to this Agreement
is not in full force and effect or does not have the priority stated
herein or
10.9 a distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any item of Collateral by any third
party or
10.10 a distress, attachment, execution or other legal process is levied,
enforced or sued out on or against any other asset of the Borrower and is
not discharged or stayed within 7 days and, in MLI's conclusive opinion,
such event has or could have a material adverse effect on MLI and/or MLIB
or
10.11 any step is taken or legal proceeding started by any person in the
bankruptcy or insolvency of the Borrower or for the appointment of a
receiver, administrator, trustee or similar of the Borrower or of any or
all of the revenues and assets of the Borrower or for the liquidation,
winding-up, administration, dissolution or reorganisation of the Borrower
or its merger with or into any other person(s) (together "Winding-up")
(except on terms approved by MLI before that step is taken) and, in the
case of any such step or proceeding taken or started against it, the same
(1) results in a judgment of bankruptcy or insolvency or the making of
any
<PAGE>
Page 29 of 62 Pages
such appointment or the making of an order for Winding-up, or (2) is not
discharged within 60 days or
10.12 any indebtedness of the Borrower in respect of monies borrowed or raised
of not less than $500,000 or its equivalent (1) is not paid when due nor
within any applicable grace period in any agreement relating to that
indebtedness, or (2) becomes due and payable before its normal maturity
by reason of a default or event of default, however described or
10.13 the Borrower is insolvent, is unable to pay its debts as they fall due,
stops, suspends or threatens to stop or suspend payment of all or a
material part of its debts, begins negotiations or takes any proceeding
or other step with a view to readjustment, rescheduling or deferral of
all of its indebtedness or any part of its indebtedness which it would or
might otherwise be unable to pay when due or proposes or makes a general
assignment or an arrangement or composition with or for the benefit of
creditors or
10.14 any event occurs which under the laws of any relevant jurisdiction has
an effect equivalent to any of the events referred to in this Clause 10.
If any person (the "Guarantor") has provided to MLI and MLIB a guarantee
or other performance assurance (the "Performance Assurance Agreement") of
the Borrower's obligations under this Agreement and the Custodian
Agreement, then it shall also be an Event of Default if any of the events
referred to in any of Clauses 10.1, 10.3, 10.5, 10.6 and 10.10 to 10.14
(all inclusive) occurs in relation to the Guarantor (and for this purpose
references, however expressed, to "the Borrower" and "this Agreement"
respectively shall be deemed to be references to "the Guarantor" and "the
Performance Assurance Agreement").
11 Enforcement
If the Borrower fails or is unable to MLI's satisfaction duly to comply
with any demand under Clause 7. 1 (B) or (C), MLI may at any time
thereafter:
11.1 without further notice to the Borrower and without prejudice to any other
right or remedy, dispose or procure the disposal, by sale or otherwise,
of all or from time to time part of the Charged Securities (including any
securities or other property delivered or deliverable under Clause 13,
any Hedging Contracts or the Custodian Agreement) or other property
hereby pledged or charged or otherwise realise or procure the realisation
of the same, in such manner and at such price or prices (whether payable
or deliverable immediately, on a deferred basis or by instalments)
without being responsible for any loss or diminution in price, as it may
think fit, close out or liquidate any option, future, long position or
short position which the Borrower may have (by sale, purchase or
otherwise howsoever), take possession of all or from time to time part of
such Charged Securities or other property hereby pledged or charged and
proceed forthwith to sell, assign, give options to purchase, contract to
sell or otherwise dispose of and deliver such Charged Securities or other
property hereby pledged or charged or any part thereof in one or more
parts at public or private sale at any exchange, broker's board or at any
of MLI's offices or elsewhere at such prices and on such terms as MLI
deems appropriate, and exercise
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Page 30 of 62 Pages
all or any rights conferred by and collect any proceeds of and monies,
securities or other property paid or delivered under or otherwise receive
and realise the benefits of the Hedging Contracts and the Custodian
Agreement, all without demand for performance, advertisement or other
notice of any kind, and apply the proceeds thereof and all cash balances
in the Collateral Account or otherwise hereby pledged or charged as
follows:
11.1.1 first, in or towards payment of all amounts (including costs,
expenses, commissions and taxes) arising as a result thereof
11.1.2 secondly, in or towards payment and satisfaction of the Secured
Liabilities in such order and manner as MLI may determine
11.1.3 thirdly, in payment of any surplus to the Borrower or other person
entitled thereto.
Provided always that MLI shall not be obliged to apply any part of such
proceeds in accordance with sub-clause 11.1.3 and MLIB shall not be
obliged to pay any amount of compensation in accordance with Clause 7.3
until all liabilities (including future and contingent liabilities) to,
and/or amounts due or owing to, MLI and MLIB under or in connection with
this Agreement have been discharged to the satisfaction of each of MLI
and MLIB and until after each of them has exercised all set-offs and
other rights which it is expressed to be entitled to make or exercise
under this Agreement. Until such time such proceeds and compensation
shall be held in or credited to the Collateral Account or such other
account with MLI as MLI may (in its absolute discretion) decide.
Upon any disposal of any such Charged Securities or other property hereby
pledged or charged or realisation in respect of any Hedging Contracts or
the Custodian Agreement made or purported to be made under the provisions
of this Clause, a certificate of any officer or employee of MLI that a
default has occurred and that the power to do so has become exercisable
shall be conclusive evidence of that fact in favour of any purchaser or
other person to whom any of such Charged Securities or other property
hereby pledged or charged may be transferred under such disposal or, as
the case may be, any person liable under or in respect of any such
Hedging Contract or the Custodian Agreement and the Borrower agrees to
indemnify MLI (on a full indemnity basis) against any claim which may be
made against it by such purchaser or person by reason of any defect in
title to any such Charged Securities or other property hereby pledged or
charged unless such claim has arisen as a result of the negligence or
wilful misconduct of MLI.
11.2 in addition to any general lien, right to combine or consolidate
accounts, set-off or other similar right to which it may be entitled at
law, by contract, or otherwise, each of MLI and MLIB may at any time
without notice to the Borrower, debit any liabilities of the Borrower
under or in connection with this Agreement to any account of the Borrower
with either of them (including without limitation the Collateral Account)
and combine or consolidate all or any one or more of the Borrower's then
existing accounts (including without limitation the Collateral Account)
with, and liabilities of the Borrower to, it and/or set off, transfer or
apply any sum(s) standing to the credit of any one or more of the
Borrower's accounts with it (including without limitation the Collateral
Account) in or towards
<PAGE>
Page 31 of 62 Pages
satisfaction of any of the liabilities of the Borrower to MLI and/or
MLIB, whether present or future, actual or contingent.
11.3 do all such other acts and things as it may consider necessary or
desirable in connection with the realisation of the security created by
or pursuant to this Agreement.
Each of MLI and MLIB shall have authority to purchase one currency with
another for purposes of this Clause 11.
12 Indemnity
The Borrower shall on demand indemnify each of MLI and MLIB (in this
Clause 12, each an "Indemnified Party") against:
12.1 any funding and any other costs, expenses or liabilities (including loss
of profit and including taxes (other than taxes on the overall net income
of the Indemnified Party), any stamp duty or similar tax, legal fees and
value added tax) sustained or incurred by the Indemnified Party (1) to
render this Agreement (including the security created by or pursuant to
this Agreement) enforceable and admissible in evidence in the courts
referred to in Clause 20; (2) in the administration of this Agreement
(including the making of Securities Loans and the return of Equivalent
Securities); (3) as a result of the assignment, exercise or performance
of any Hedging Contract(s); (4) in protecting or enforcing the
Indemnified Party's rights under this Agreement and/or any amendment; (5)
as a result of the occurrence or continuance of any Event of Default or
default by the Borrower under this Agreement (whether in connection with
any act or thing done as set out in Clause 11 or otherwise); or (6) as a
result of the receipt or recovery by the Indemnified Party (whether or
not as a result of any application in accordance with Clause 2.2) of all
or any part of an Advance which has a fixed Interest Period otherwise
than on the last day of that fixed Interest Period and
12.2 all costs, expenses and losses sustained or incurred by the Indemnified
Party as a result of or in connection with the payment of any amount due
under this Agreement, whether as a result of any judgment or order, the
winding up or bankruptcy of the Borrower, or otherwise, in a currency
other than that due under this Agreement, including any variation between
the rate of exchange at which such amount is converted into such currency
for the purpose of such judgment or order or otherwise, and the rate
prevailing on the date on which the Indemnified Party first receives
actual payment of such amount in such currency other than that due under
this Agreement.
13 Utilisation of Collateral by MLI
13.1 Authorisation: The Borrower hereby authorises MLI from time to time to
utilise Securities comprised in the Collateral for MLI's own purposes or
the purposes of any third party to enable MLI so to utilise Securities
comprised in the Collateral the following provisions of this Clause 13
shall have effect.
<PAGE>
Page 32 of 62 Pages
13.2 Transfer of Securities by Borrower to MLI: Where MLI wishes to use
Securities comprised in the Collateral for any purpose the Securities in
question shall be simultaneously released from the security created by or
pursuant to this Agreement and transferred by the Borrower to MLI in
accordance with the provisions of this Clause 13.2. The Borrower
authorises MLI to take such steps to deliver or credit the relevant
Securities to MLI (or, as appropriate, the third party in question) and
execute such instruments of transfer or the like as MLI considers
necessary or desirable to vest the full legal and beneficial right, title
and interest in and to those Securities in MLI (or, as the case may be,
that third party).
13.3 Return of Securities:
13.3.1 Where Securities have been utilised by MLI for any purpose and
those Securities cease to be required for that purpose, MLI shall
thereupon return or procure redelivery of those Securities or of
Equivalent Securities to the Borrower by redelivering or crediting
those Securities or Equivalent Securities to the Collateral Account,
whereupon those Securities or Equivalent Securities shall
automatically be subject to the security created by or pursuant to
this Agreement.
13.3.2 All returns and redeliveries of Securities or Equivalent
Securities must be made together with any appropriate instruments of
transfer or the like, and so that all right, title and interest in
and to those Securities or Equivalent Securities shall vest in the
Borrower, free from all liens, charges and encumbrances, other than
the security created by or pursuant to this Agreement.
13.3.3 MLI shall be obliged to return or procure redelivery of Equivalent
Securities not necessarily the original Securities and Clause 3.6
shall apply (with any necessary modifications) to a return or
redelivery under this Clause 13.3 as it applies to a Securities Loan
under Clause 3.
13.4 Distributions:
13.4.1 Where any Securities have been transferred by the Borrower under
this Clause 13 and have not been returned or redelivered to the
Borrower before an applicable income payment date or record date in
respect of those Securities, MLI shall, on the date of payment of
any dividend, interest or other distribution on or with respect to
the Securities in question or on such other date as MLI and the
Borrower may agree, pay to the Borrower such amount in relation to
such dividend, interest or distribution and deliver such tax
vouchers as may be available or appropriate as shall ensure that the
Borrower is placed in the same after-tax position (but ignoring for
these purposes any tax by reference to the general income or profits
of the Borrower or other similar reference) as if it had been the
Holder of the relevant Securities at all relevant times. However,
MLI's obligations under this sub-clause 13.4.1 are subject to the
Borrower where appropriate delivering to MLI a duly completed and
certified Certificate (MOD2) or a photocopy thereof bearing an
Inland Revenue acknowledgment and unique number which Certificate or
photocopy remains valid and/or taking all such further steps as are
necessary and reasonable to enable MLI to make
<PAGE>
Page 33 of 62 Pages
payment under this Clause 13.4 without accounting to the Inland
Revenue for any relevant withholding tax and/or UK tax. If in
consequence of a failure by the Borrower to observe its
obligations set out in this sub- clause 13.4.1 MLI is or will
become liable to account to the Inland Revenue for any relevant
withholding tax and/or UK tax the amount otherwise payable by
MLI under this Clause 13.4 shall be reduced by the amount of
such tax.
13.4.2 For the purposes of this Clause 13.4 "Holder" in relation to
registered securities means the person whose name or whose nominee
is shown on the relevant register of ownership and in relation to
bearer Securities means the bearer thereof.
13.5 Miscellaneous:
13.5.1 If on the due date for return or redelivery thereof MLI shall for
any reason be unable to return or redeliver any Securities or
Equivalent Securities in connection with any transfer of Securities
to MLI under this Clause 13, MLI's obligation to return or redeliver
those Securities or Equivalent Securities shall be replaced by an
obligation to pay to the Borrower an amount in cash equal to the
market value of those Securities or Equivalent Securities derived
from rates offered by a dealer reasonably chosen by MLI. Any such
amount shall be paid or credited to the Collateral Account.
13.5.2 The Borrower shall, subject as otherwise provided in this
Agreement and in particular to the security created by or pursuant
to this Agreement, have all the incidents of ownership of Securities
transferred under this Clause 13, including the right to transfer
them to others, and such Securities shall continue to be taken into
account for the purpose of Clause 6.4.
14 Successors and Assigns
14.1 The Borrower may not assign or transfer all or any part of its rights or
obligations under this Agreement. However, this Agreement shall be
binding on the Borrower and its successors as from time to time
constituted.
14.2 Where the Borrower is a partnership. This Agreement is being executed on
behalf of the Borrower by one of its general partners and, by such
execution, such general partner agrees and warrants that tile partnership
of which he or it is a general partner is and will be fully bound by this
Agreement as the Borrower.
14.3 Each of MLI and MLIB may at any time assign or transfer all or part of
its rights and/or obligations under this Agreement to any other member of
the Merrill Lynch Group or, with the prior written consent of the
Borrower (such consent not to be unreasonably withheld), to any other
person. MLI shall after any such assignment or transfer and to the extent
(if at all) appropriate or required hold the security created by or
pursuant to this Agreement for itself and as trustee for MLIB and each
assignee or transferee. Any reference in this Agreement to MLI or MLIB
shall be construed accordingly and shall also include their respective
successors. Any such assignee or transferee shall be entitled to the full
benefit of this Agreement to the
<PAGE>
Page 34 of 62 Pages
same extent as if it were an original party in respect of the rights or
obligations assigned or transferred to it.
14.4 Each of MLI and MLIB may disclose to any other member of the Merrill
Lynch Group or, subject to prior notice to the Borrower, any other
potential assignee or transferee or person who has entered or proposes to
enter into contractual arrangements with it in relation to or concerning
this Agreement such information about the Borrower and this Agreement as
it may think fit.
15 Information
During the continuance of the Facilities and until the Secured
Liabilities have been duly and properly paid in full, the Borrower shall
furnish to MLI within 90 days after the end of each of its financial
years its annual accounts and promptly such other financial and other
information as MLI may reasonably request from time to time.
16 Remedies and Waivers
No failure by MLI or MLIB to exercise, and no delay by MLI or MLIB in
exercising, any right or remedy will operate as a waiver thereof, nor
will any single or partial exercise of any such right or remedy preclude
any other or further exercise thereof or the exercise of any other right
or remedy. The authority to debit, charge and pledge and the right of
set-off and other rights and remedies provided in this Agreement are
separate, independent and cumulative and not exclusive of any rights or
remedies (including any other security, right of set-off, lien, right to
combine or consolidate accounts or similar right) to which MLI or MLIB is
at any time entitled anywhere, whether by operation of law or otherwise.
17 Partial Invalidity
If at any time any provision of this Agreement is or becomes illegal,
invalid or unenforceable in any respect under the law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions of this Agreement, nor the legality, validity or
enforceability of such provisions under the law of any other jurisdiction
shall in any way be affected or impaired thereby. If and to the extent
that the security expressed to be created by or pursuant to this
Agreement is at any time and for any reason not effective as a fixed
charge, it shall instead take effect as a floating charge.
18 Miscellaneous
18.1 All interest shall accrue from day to day and shall be calculated on the
basis of a 360-day year (365 days where that is market practice, as
determined by MLI) and the number of days elapsed.
<PAGE>
Page 35 of 62 Pages
18.2 The certificate of an officer or employee of MLI as to any sum payable to
MLI or MLIB under this Agreement shall be final, conclusive and binding
on the Borrower save in the case of manifest error.
18.3 Except to the extent otherwise specifically provided in any other
agreement between MLI and the Borrower, if there is any conflict or
inconsistency between this Agreement and any other such agreement, the
terms of this Agreement shall prevail.
18.4 MLIB appoints MLI its agent for the purposes of this Agreement and
authorises it to take such action as contemplated by this Agreement, and
in particular authorises it to receive payment of any monies payable to
MLIB under or in connection with this Agreement. Notwithstanding that
appointment, and MLI's holding the security created by or pursuant to
this Agreement for itself and as trustee for MLIB, the rights and
obligations of each of MLI and MLIB with respect to the facilities
provided by it shall be several and not joint or joint and several, and
neither of them shall be responsible for the obligations of the other.
19 Notices
19.1 The Borrower and MLI may from time to time issue instructions, notices,
demands or requests either orally or in writing (but in writing only
where so provided under this Agreement) and MLI shall be entitled to rely
on and shall not be liable for any action taken or omitted to be taken in
good faith pursuant to instructions, notices, demands or requests
believed by it to be genuine and to be given or made by the appropriate
person(s). The Borrower shall indemnify each of MLI and MLIB against all
costs, expenses and liabilities arising from MLI's relying on any such
instructions, notices, demands or requests.
19.2 Each oral communication under this Agreement shall be directed, if to
MLI, to such of its officer(s) as may be notified by MLI to the Borrower
from time to time, and if to the Borrower, to such of its
representative(s) as may be notified to MLI from time to time and shall
be confirmed in writing where so provided under this Agreement. Each
written communication under this Agreement shall be addressed as follows:
MLI: 20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Attention: International Prime Brokerage
Fax No: 4471 892 4985
The Borrower: As set out in the Letter
or to such other address, telex or facsimile number or marked for the
attention of such other person as may be notified by the relevant
addressee from time to time to the other party. Notices shall be
deemed to have been received seven days after being posted and
immediately in the case of a telex, fax or oral communication.
<PAGE>
Page 36 of 62 Pages
20 Governing law
This Agreement shall be governed by and construed in accordance with
English law and, in relation to any legal action or proceedings arising
out of or in connection with this Agreement ("Proceeding"), the Borrower
hereby and for the benefit of each of MLI and MLIB irrevocably submits to
the jurisdiction of the courts of England and any New York State or
United States Federal court sitting in New York City, and waives any
objection to Proceedings in such courts on the grounds of venue or on the
grounds that the Proceedings have been brought in an inconvenient forum.
Those submissions shall not affect MLI's or MLIB's right to take
Proceedings in any other court of competent jurisdiction, nor shall the
taking of Proceedings in any court of competent jurisdiction preclude MLI
and/or MLIB from taking Proceedings in any other court of competent
jurisdiction (whether concurrently or not).
<PAGE>
Page 37 of 62 Pages
SCHEDULE 1
* , 199*
[Borrower]
Dear Sirs:
This letter is supplemental to the facility letter (the "Facility Letter")
dated * 199* addressed to you and confirmed and accepted by you on * 199* and
this letter (including your acceptance of it) and the Facility Letter shall be
read and construed as one document.
Further to your request, we agree that the following contracts entered or to
be entered into by you shall, for the purposes of the Facility Letter, be
"Hedging Contracts" (and accordingly are subject to the security created by or
pursuant to the Facility Letter):
[Contract Description]
[All options, futures, etc. now or at any time held in Account No. * with
* of * ]
We also agree that the guarantee dated *199* issued by [us/Merrill Lynch
International Bank Limited] in favour of * in relation to your obligations
under the above Hedging Contract(s) shall be a "Guarantee" for the purpose of
the Facility Letter.
You will [at our request/promptly after execution of the enclosed copy of this
letter] (but without prejudice to Clause 6.2 of the Facility Letter) give
notice in the form attached to * of such security, and you will in any event
ensure that all monies and securities payable or deliverable pursuant to the
above Hedging Contract(s) are paid or delivered direct by * to us, without
set-off or deduction except on account of liabilities under the same Hedging
Contract, for credit to the Collateral Account.
Please signify your agreement to the foregoing by executing and returning the
enclosed copy of this letter.
For and on behalf of
MERRILL LYNCH INTERNATIONAL
By:
Name:
Title:
To: Merrill Lynch International
* hereby confirm agreement to the above, and also that any necessary consent
of * has been obtained.
Dated * 199*
For and on behalf of
[*]
<PAGE>
Page 38 of 62 Pages
By:
Name:
Title:
<PAGE>
Page 39 of 62 Pages
NOTICE OF ASSIGNMENT
* 199*
[
]
We refer to the [Contract Description] (the "Hedging Contract(s)") made
between ourselves and yourselves.
We hereby give you notice:
1 that we have assigned to Merrill Lynch International (for itself and as
trustee for Merrill Lynch International Bank Limited) all our rights and
benefits under or in connection with the Hedging Contract(s) including
(but without prejudice to the generality of the foregoing) any monies
payable to us, any securities deliverable to us, and the right to
exercise any option conferred thereby. Nothing in that assignment or this
notice affects our obligations to you under the Hedging Contract(s).
2 that you are hereby authorised and instructed to:
2.1 pay any such monies to [account details] and
2.2 deliver any such securities to [account details].
3 the authority and instructions herein contained cannot be revoked or
varied by us without the consent of Merrill Lynch International.
Please execute and return the enclosed copy of this notice to Merrill
Lynch International, Ropemaker Place, 25 Ropemaker Street, London EC2Y
9LY, Fax No: 4471-867-4550, Attention: Special Finance Group. Such
execution and return will constitute your agreement to the foregoing and
that you will not exercise any right to net or set-off for any liability
(except for any liability of ours to you under the same Hedging Contract)
or any competing lien, charge or other security interest as against any
Hedging Contract or any monies or securities payable or deliverable to us
under it.
[BORROWER]
By:
<PAGE>
Page 40 of 62 Pages
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Telephone: 0171-772 1000
Telex: 9413941
Fax: 0171-772 2917/2980
Merrill Lynch
Please confirm your agreement to the above and your acceptance of the
provisions of this letter and the Terms Sheet by completing, signing and
returning the enclosed copy of this letter.
Yours faithfully,
For and on behalf of
Merrill Lynch International
/s/ David W. Stockwell
For itself as trustee and agent for
Merrill Lynch International Bank Limited
To: Merrill Lynch International and
Merrill Lynch International Bank Limited
c/o Merrill Lynch International Limited
20 Farringdon Road
P.O. Box 293
London
EC1M 3NH
Dated 1st day of June 1998.
We accept the Facilities on the terms and conditions detailed in your letter
and the attached Terms Sheet.
Our address and other details for the purpose of Clause 19 of the Terms Sheet
are set out below.
Yours faithfully,
Prometheus Western Retail LLC
By: Prometheus Western Retail Trust,
its Sole Member
/s/ John A. Moore
c/o Lazard Freres, 30 Rockefeller Plaza, 63rd Floor, New York, NY 10020, USA
Attention: John A. Moore
Fax No.: 212-332-5980
Telephone No.: 212-632-8258
Registered in England (No. 2312079)
Registered Office: 25 Ropemaker Street, London EC2Y 9LY
A Subsidiary of Merrill Lynch & Co. Inc., Delaware, U.S.A.
Regulated by The Securities and Futures Authority Limited
Member of the London Stock Exchange
<PAGE>
Page 41 of 62 Pages
EXHIBIT 8
CUSTODIAN AGREEMENT
This Agreement is made on May 27, 1998 between
(1) MERRILL LYNCH INTERNATIONAL (the "Custodian") and
(2) Prometheus Western Retail LLC (the "Customer").
It is agreed as follows:
1 Definitions
In this Agreement:
1.1 "Customer Account" means the Collateral Account under Facility Agreement
1.2 "Facility Agreement" means the facility letter dated May 27, 1998 between
Merrill Lynch International ("MLI"), Merrill Lynch International Bank
Limited and the Customer, as amended and supplemented from time to time
1.3 "Instructions" means any instructions given by the Customer in relation
to any specified transaction in writing or by facsimile or telex, signed
or given by any one of the persons specified in or notified pursuant to
Clause 11
1.4 "Rules" means the Rules of The Securities and Futures Authority Limited
as from time to time in effect and
1.5 "Securities" includes all investments, as defined in the Financial
Services Act 1986 (as amended or re-enacted from time to time) and
physical commodities (or any certificates or documents of or evidencing
title to any of the same), which the Customer may at any time deposit
with the Custodian to be held on the terms of this Agreement.
2 Appointment of Custodian
The Customer hereby appoints the Custodian to act as custodian of the
Securities in accordance with the terms and conditions of this Agreement
and to provide the services described in this Agreement.
3 Warranties and Statements under the Rules
3.1 The Customer warrants to and for the benefit of the Custodian that it is
duly organised and validly existing under the laws of its jurisdiction of
establishment, has full capacity and authority to enter into this
Agreement and to carry out all the transactions contemplated in this
Agreement and has taken all necessary action (including the obtaining of
all necessary consents, registrations and the like of or with any
government or other regulatory body or authority) to authorise the
execution, delivery and performance of this Agreement.
3.2 The Customer understands that the Custodian is regulated by of The
Securities and Futures Authority Limited, that its name is as set out at
the beginning of this Agreement and that at the date of this Agreement
its registered office is at the address set out for the Custodian
pursuant to Clause 12.
3.3 The Customer further understands that the Custodian is proposing to and
will treat the Customer as a non-private customer within the meaning of
the Rules for all the purposes of this Agreement and acknowledges that in
accordance with the Rules it has agreed that its monies shall not be
treated by the Custodian as or deemed to be Client Money for the purpose
of the Financial Services (Client Money) Regulations 1991 (as amended).
<PAGE>
Page 42 of 62 Pages
3.4 As respects cash items, the first sum paid in shall be the first paid
out, and a payment in shall discharge the first undischarged debit item,
and no cash item shall be held for a period of a year or more.
3.5 Notwithstanding any of its rights and duties under this Agreement,
nothing in this Agreement shall make the Custodian a manager or adviser
in respect of any Securities and the Custodian is not required to have
regard to any particular investment objectives. The Custodian will not be
subject to any fiduciary duties towards the Customer and will not incur
any duty of disclosure towards the Customer or be subject to any
restriction in dealing for the Custodian's own or its customers' account
by reason of any custodial services provided to the Customer.
4. Deposit of Securities
4.1 The Customer may tender Securities to the Custodian, which may decline to
accept Securities tendered to it if it determines that it would be
illegal or contrary to any applicable rules of any exchange or market for
the Custodian to accept such Securities or if the Custodian reasonably
suspects that such Securities are tainted by fraud.
4.2 The Customer and the Custodian shall agree from time to time the normal
categories of Securities, and the markets in which such Securities are to
be dealt in, to be deposited under the terms of this Agreement and, if
the Customer intends to tender Securities to the Custodian under this
Clause falling outside such categories or to be dealt in on other
market(s), it shall give 30 days' (or such lesser period as the Custodian
may agree) notice to the Custodian of its intention to tender Securities
of such category or to be dealt in on much market(s). At any time during
such period the Custodian may notify the Customer that it will decline to
accept such Securities if it determines that custodianship facilities
suitable for holding Securities of that particular category or to be
dealt in on such market(s) are not reasonably available to it.
4.3 The Custodian shall be entitled to treat Securities accepted by it as
fungible or at any time to allocate specific Securities to the Customer,
any such treatment or allocation to be binding on the Customer.
4.4 Registered Securities accepted by the Custodian may be registered in the
name of a nominee.
4.5 The Securities held in the Customer Account shall, at all times, as
between the Custodian (in its capacity as such) and the Customer be the
property of the Customer, and the Custodian shall not have the power or
authority to transfer, assign, hypothecate, pledge or otherwise dispose
of any of the Securities to any person except as expressly permitted by
the provisions of this Agreement or the Facility Agreement.
5 Transactions Requiring Instructions
The Custodian shall carry out the following transactions in relation to
the Securities upon receipt of specific Instructions:
5.1 Sales: The Custodian shall deliver Securities sold by the Customer and
receive payment for those Securities in such manner as may be specified
by the Customer in its Instructions (and, in the absence of specific
Instructions to the contrary, shall make such payment available to MLI
for application in accordance with the Facility Agreement).
5.2 Purchases: The Custodian shall make payment for and receive Securities
purchased by the Customer (insofar as monies are made available to the
Custodian by the Customer to make such payment), payment to be made by
the Custodian in such manner as may be specified by the Customer in its
Instructions.
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5.3 Exercise of rights, etc: The Custodian shall deal with rights (including
rights to subscribe for securities and conversion rights), warrants and
other similar securities received by it in connection with the Securities
only in the manner and to the extent specified in Instructions.
5.4 Voting: Neither the Custodian nor any of its nominees shall exercise any
voting rights attached to any of the Securities except as directed by
Instructions received by the Custodian.
The Customer shall on demand pay to the Custodian such transaction fees
(together with value added tax, if any) as the Custodian may from time to
time specify in respect of each delivery of Securities to or out of the
Customer Account and such other fees (together with value added tax, if
any) as may be agreed by the Customer and the Custodian from time to
time.
6 Transactions not Requiring Instructions
The Custodian shall be entitled to carry out the following transactions
relating to the Securities without seeking Instructions from the
Customer:
6.1 Signature of Certificates: The Customer hereby authorizes the Custodian
to sign any certificates of ownership or other certificates relating to
the Securities which may be required by any regulations made by the
Commissioners of Inland Revenue, the United States Internal Revenue
Service or any other regulatory authority, whether governmental or
otherwise, relating to income tax, any other tax levied or ownership.
6.2 Collection of Income and other Payments: In the absence of contrary
Instructions:
6.2.1 The Custodian shall collect and receive, for the account of the
Customer, all income and other payments and distributions in respect
of the Securities, and credit the same to the Customer Account.
6.2.2 The Custodian shall take any action necessary and proper in
connection with the receipt of such income and other payments and
distributions as are referred to in above, including (without
limitation) the presentation of coupons and other interest items.
The Custodian may make such deductions, withholdings and payments on
account of tax or otherwise as it reasonably believes are or may be
required by applicable law, in respect of payments and distributions in
respect of Securities, amounts accruing or credited on or in respect of
the Customer Account, or otherwise.
6.3 Receipt of Capital: In the absence of contrary Instructions:
6.3.1 The Custodian shall receive and hold for the account of the
Customer any capital paid in relation to the Securities,
whether as a result of their being called or redeemed or
otherwise becoming payable (other than at the option of the
holder thereof), and shall credit the same to the Customer
Account.
6.3.2 The Custodian shall take any action necessary and proper in
connection with the receipt of any such capital as is referred
to in 6.3.1 above, including (without limitation) the
presentation for payment of Securities which become payable as
a result of their being called or redeemed or otherwise
becoming payable (other than at the option of the holder
thereof) and the endorsement for collection of cheques, drafts
and other negotiable instruments.
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6.4 Receipt of Securities: The Custodian shall in the absence of contrary
Instructions receive and hold for the account of the Customer all
Securities received as a distribution on Securities held by the Custodian
as a result of a stock dividend, share sub-division or reorganisation,
capitalisation of reserves or otherwise.
6.5 Exchange of Interim Receipts: The Custodian shall in the absence of
contrary Instructions exchange interim receipts or temporary Securities
for definitive certificates or Securities.
6.6 Expenses and Disbursements: The Custodian may make cash disbursements for
expenses and stamp duties and transfer taxes in handling Securities and
for similar items in connection with the Custodian's duties under this
Agreement. Any such disbursements, and all transaction and other agreed
fees and expenses charged by the Custodian under this Agreement (together
with value added tax, if any) shall be debited to the Customer Account.
6.7 Delivery of Information and Documents: The Custodian shall deliver to the
Customer transaction advices and/or regular statements of account showing
the Securities held and any cash balances held under the terms of this
Agreement at such intervals as may be agreed with the Customer and shall
notify the Customer of all notices, reports and other financial
information relating to the Securities when received by it which in its
opinion require action and obtain the Customer's Instructions as to the
action to be taken in connection therewith. The Custodian shall check for
errors all transaction advices and/or statements of account received by
it from any agent appointed under Clause 7. 1. Each time the Customer and
the Custodian agree normal categories of Securities, and the markets in
which they are to be dealt in (including acceptance by the Custodian of
Securities outside such categories or to be dealt in on other market(s))
as contemplated by Clause 4.2, the Custodian shall inform the Customer of
the identity of each agent (if any) appointed under Clause 7.1 which will
or may have any such Securities deposited with it. The Custodian shall
also keep the Customer informed about any changes (including additions
and terminations) in any such agents.
6.8 Records: Records of all transactions in the Securities and any cash
balances held by the Custodian under the terms of the Agreement shall be
maintained by the Custodian and shall be made available for inspection
and audit on the Custodian's premises at reasonable times by the
Customer, any representative of the Customer and the independent
accountants employed by the Customer. Wherever practicable, the Custodian
shall endeavour to ensure that the Customer's independent accountants are
afforded access to the records of transactions in the Securities and cash
balances maintained by any agent appointed by the Custodian under Clause
7.1 and pertaining to the Customer.
6.9 Right to take Action: Notwithstanding the provisions of Clause 5 and 6.7
above, the Custodian shall be entitled in its absolute discretion to take
any action in relation to the Securities, including without limitation
the exercise of rights attached thereto and the satisfaction of
liabilities arising therefrom or any other action on behalf of the
Customer which the Custodian considers is necessary or desirable to
safeguard the Securities or further the Customer's interests in the event
that no Instructions to the contrary are received or that circumstances
make it impracticable for the Custodian to obtain any, or any timely,
Instructions.
7 Appointment of Agents and Advisers
7.1 General Agents: The Custodian shall he entitled to appoint agents,
whether in its own name or that of the Customer, to perform any of the
duties undertaken by the Custodian in this Agreement. The Custodian may
delegate to any agent so appointed any of the functions to be performed
by the Custodian under this Agreement including without limitation the
selection of payments due on Securities. The Custodian shall forthwith
notify the Customer upon any such appointment.
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Any such agent shall be a person whom the Custodian reasonably believes
to be a person whose business includes the provision of investment
custodial services, and all cash and Securities deposited with or held by
any such agent will be at the risk of the Customer as regards any act,
omission or insolvency of such agent and any laws, acts, decrees,
regulations, edicts, orders or other mandates, and any acts of warfare,
seizure, confiscation, destruction or impairment of property, promulgated
and/or done by any court or by any governmental, military or civil
authority, whether de jure or de facto in control of or operating at the
place where such agent is located. The Custodian's sole obligation, in the
event of any loss in connection with any cash and Securities held by or
deposited with any such agent will be to assign to the Customer such rights
(if any) as the Custodian may have against such agent.
7.2 Legal and other Advisers: If the Custodian considers it necessary it may
request advice from legal or other professional advisers of its own
choosing in connection with any action to be taken by the Custodian in
relation to the Securities.
7.3 Remuneration for Agents and Advisers: If the Custodian appoints any agent
or adviser pursuant to 7.1 or 7.2 above, it shall be entitled to pay
normal remuneration to such agent or adviser and, in the case of any such
agent, and any such adviser which the Custodian may appoint having
determined that such appointment is necessary or advisable in connection
with the Custodian's protecting or enforcing its rights under this
Agreement and/or any amendment or in any other case where such adviser is
appointed with the prior written approval of the Customer, such
remuneration shall be for the account of the Customer.
8 Scope of Responsibility and Indemnity
8.1 Liability of the Custodian: Subject to the provisions of this Agreement
the Custodian shall use all reasonable care in the performance of its
duties under this Agreement. The Custodian's liability at any time in
connection with any cash and Securities deposited under the terms of this
Agreement shall be subject to Clause 7.1 and shall not in any
circumstances exceed the amount or (as appropriate) market value of such
cash and Securities at the time of failure to exercise reasonable care as
aforesaid whether or not then held by the Custodian.
The Custodian shall have no liability or responsibility to the Customer
with respect to any changes in the standard of currencies of property or
with respect to any fluctuations or changes in the conversion value of
property into other currencies and/or property.
8.2 Custodian's right to rely on Instructions: Subject to Clause 8.1, the
Custodian may rely in the performance of its duties under this Agreement
upon any Instructions believed by it to be genuine and given by any
person specified in or notified pursuant to Clause 11.
8.3 Responsibility for Insurance: Without prejudice to the liability of the
Custodian from time to time pursuant to any other provision of this
Agreement, the Custodian shall not be responsible for insuring any
Securities.
8.4 Customer's Responsibility to examine documents: Upon receipt of each and
every transaction advice and/or statement of account supplied to it by
the Custodian pursuant to Clause 6.7, the Customer shall examine the same
and notify the Custodian within 4 Business Days of the date of receipt of
any such advice or statement of any discrepancy between Instructions
given and the situation shown therein and/or of any other errors therein.
In the absence of such notification by the Customer the Custodian shall
not (in the absence of gross negligence or wilful default on its own
behalf) be liable for the consequences of any such discrepancy or error
which was made or existed during the period covered by such statement or
transaction indicated by such advice.
<PAGE>
Page 46 of 62 Pages
8.5 Indemnity: The Customer agrees to indemnify the Custodian and each of the
Custodian's nominees, and to hold the Custodian and such nominees
harmless, against all costs, liabilities and expenses including (without
limitation) legal fees and disbursements, arising directly or indirectly:
8.5.1 from the fact that Securities are registered in the name of or
deposited with the Custodian or any such nominee or
8.5.2 (without limiting the generality of 8.5.1 above), from any act or
thing which the Custodian takes or does or omits to take or do in
relation to the Securities or
8.5.3 from the Custodian's relying on any Instructions as referred to in
Clause 8.2 provided that neither the Custodian nor any of its
nominees shall be indemnified against any liability arising out of
the Custodian's or such nominee's own gross negligence or wilful
default.
8.6 Right to Deduct: The Custodian shall be entitled to deduct or withhold
from any amount which is received by it for the account of the Customer
or which is payable by it to the Customer or, at its option, to debit to
the Customer Account any amount payable to the Custodian under this
Agreement.
8.7 The Rules: Nothing in this Agreement shall exclude or restrict any
obligation which the Custodian has under the Rules in relation to the
Customer, whether as regards its activities as custodian of Safe Custody
Investments or otherwise, or any liability which the Custodian may incur
under the Financial Services Act 1986 or the Rules in respect of a breach
of any such obligation. It is further agreed that the Custodian will hold
all Securities (whether or not Safe Custody Investments as defined in the
Rules) as though Chapter 4 of the Rules regulated the Custodian's
custodianship thereof, except in so far as any of the Rules regulate the
Custodian's activities under this Agreement in priority to the said
Chapter 4. This Agreement shall be construed accordingly.
9. Lien
The Custodian shall have a general lien on all monies and Securities from time
to time held by it under this Agreement as security for all obligations of the
Customer under this Agreement for amounts becoming due or owing for
safekeeping and administration. In the event of failure by the Customer to
discharge any of such obligations when due, the Custodian shall be entitled to
apply in or towards discharge thereof such monies as aforesaid held by it and
shall be entitled without notice to the Customer to sell or otherwise realise
any of the Securities so held by it and apply the proceeds of such realisation
in or towards discharge of the said obligations.
10. Termination
Either party hereto may terminate this Agreement on giving not less than
thirty days' written notice to the other party. Upon such termination the
Custodian shall, subject to Clause 9, account to any such successor custodian
as the Customer shall, within 14 days of such termination, designate in
writing to the Custodian (and, failing any such designation, to the Customer")
for all monies and Securities then held by it pursuant to this Agreement.
11. Instructions
The Customer hereby authorises the Custodian to act in relation to the
Securities and cash on Instructions received from persons whose names and
signatures are set out in a list which shall be provided by the Customer for
such purpose, shall specify the number of such persons who must give such
Instructions for them to be effective and shall be signed by any two of the
persons whose names and signatures are set out on the next page.
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Page 47 of 62 Pages
NAME SIGNATURES
JOHN MOORE _______________________________
HENRY HERMS _______________________________
KLAUS KRETSCHMANN _______________________________
ANTHONY MEYER _______________________________
Any such list shall be superseded by any later list, signed by any two of the
above persons, which the Customer may from time to time provide. The Customer
may also notify the Custodian by Instructions signed by any two of the above
persons of additional person(s) who may sign any such list and upon whose
signature of such list the Custodian is authorised to rely, any such
Instructions to contain specimen signature(s) of such additional person(s).
12 Notices
12.1 The Customer and the Custodian may from time to time issue Instructions,
notices or other communications either orally or in writing (but in
writing only where so provided under this Agreement) and the Custodian
shall be entitled to rely on and shall not be liable for any action taken
or omitted to be taken in good faith pursuant to Instructions, notices or
other communications so given or made, subject to Clause 8.1.
12.2 Each oral communication under this Agreement shall be directed, if to the
Custodian, to such officer(s) of the Custodian as may be notified by the
Custodian to the Customer from time to time, and if to the Customer, to
such representative(s) of the Customer as may be notified to the
Custodian from time to time. Each written communication under this
agreement shall be addressed as set out under the relevant party's name
at the end of this Agreement, or to such other address, telex or
facsimile number or marked for the attention of such other person as may
be notified by the relevant addressee from time to time to the other
party. Notices to the Customer shall be deemed to have been received
seven days after being posted and immediately in the case of a telex, fax
or oral communication.
13 Governing Law
This Agreement and all contemporaneous and subsequent mandates, Instructions
and agreements between the parties pursuant to this Agreement shall be
governed by and construed in accordance with English law and, in relation to
any legal action or proceedings arising out of or in connection with this
Agreement ("Proceedings"), the Customer hereby and for the benefit of the
Custodian submits to the jurisdiction of the courts of England and any New
York State or United States Federal court sitting in New York City, and waives
any objection to Proceedings in such courts, on the grounds of venue or on the
grounds that the Proceedings have been brought in an inconvenient forum. Those
submissions shall not affect the Custodian's right to take Proceedings in any
other court of competent jurisdiction, nor shall the taking of Proceedings in
any court of competent jurisdiction preclude the Custodian from taking
Proceedings in any other court of competent jurisdiction (whether concurrently
or not).
This Agreement has been entered into in London on the date stated at the
beginning.
<PAGE>
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MERRILL LYNCH INTERNATIONAL
By: /s/ Richard Tomkys
Name: Richard Tomkys
Title: Associate Director
20 Farringdon Road
P.O. Box 293
London
ECIM 3NH
Attention: International Prime Brokerage
Fax No: 4471 892 4985
Telephone:
Prometheus Western Retail LLC
c/o Lazard Freres
30 Rockefeller Plaza
63rd Floor
New York
NY 10020
USA
By: Prometheus Western Retail Trust, Sole Member
/s/ John A. Moore
Name: John A. Moore
Title: Chief Financial Officer
Attention: John Moore, Lazard Freres Real Estate Investors, LLC
Telex No:
Fax No. (212) 332-5980
Telephone: (212) 632-8228
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Page 49 of 62 Pages
EXHIBIT 9
GUARANTEE
TO: Merrill Lynch International ("MLI")
For the attention of: John Piccitto
20 Farringdon Road
P.O. Box 293
London, EC1M 3NH
1. In consideration of MLI entering into a facilities agreement (as amended
and supplemented from time to time the "Facilities Agreement", which
shall include each transaction entered into and each document issued or
given pursuant to the Facilities Agreement) constituted by a letter dated
May 27th 1998 from MLI, to Prometheus Western Retail LLC (the "Customer")
c/o Lazard Freres, 30 Rockefeller Plaza, 63rd Floor, New York, NY 10020,
USA and MLI entering into a custodian agreement (as amended and
supplemented from time to time, the "Custodian Agreement" and, together
with the Facilities Agreement, the "Agreements") dated May 27th 1998 with
the Customer, and of MLI making available to the Customer the facilities
and services provided for in the Agreements, we, LF Strategic Realty
Investors L.P. (the "Guarantor"), a Limited Partnership duly incorporated
or organised under the laws of Delaware and having our principal place of
business c/o Lazard Freres, 30 Rockefeller Plaza, 63rd Floor, New York,
NY 10020, USA hereby unconditionally and irrevocably:-
(A) guarantee that, if for any reason the Customer does not pay any sum
payable by it under the Agreements by the time, on the date and
otherwise in the manner required by the Agreements (whether on the
normal due date, on acceleration or otherwise), the Guarantor will
pay that sum on demand by MLI; and
(B) as separate, independent and alternative stipulations, agree:-
(1) that any sum which , although expressed to be payable by the
Customer under the Agreements, is for any reason (whether or
not now existing and whether or not now known or becoming known
to MLI) not recoverable from the Guarantor on the basis of a
guarantee shall nevertheless be recoverable from it as if it
were the sole principal debtor and shall be paid by it to MLI
on demand; and
(2) as a primary obligation to indemnify MLI against any loss
suffered by it as a result of any sum expressed to be payable
by the Customer under the Agreements not being paid by the
time, on the date and otherwise in the manner required by the
Agreements or any payment obligation of the Customer under the
Agreements being or becoming void, voidable or unenforceable
for any reason (whether or not now existing and whether or not
now known or becoming known to MLI) the amount of that loss
being the amount expressed to be payable by the Customer in
respect of the relevant sum.
2. As between the Guarantor and MLI but without affecting the Customer's
obligations, the Guarantor shall be liable under this Guarantee as if it
were the sole principal debtor and not merely a surety. Accordingly, it
shall not be discharged, nor shall its liability be affected, by anything
which would not discharge it or affect its liability if it were the sole
principal debtor (including (1) any time, indulgence, concession, waiver
or consent at any time given to
<PAGE>
Page 50 of 62 Pages
the Customer or any other person, (2) any amendment or supplement to the
Assignments or to any security or other guarantee, (3) the making or
absence of any demand on the Customer or any other person for payment,
(4) the enforcement or absence of enforcement of the Agreements or of any
security or other guarantee, (5) the taking, existence or release of any
security or other guarantee' (6) the winding-up or dissolution of the
Customer or any other person or (7) the illegality, invalidity, or
unenforceability of or any defect in any provision of the Agreements or
any of the Customer's obligations under them).
3. The Guarantor's obligations under this Guarantee are and will remain in
full force and effect by way of continuing security until the facilities
have terminated and MLI has irrevocably received or recovered all sums
payable under the Agreements. Furthermore, those obligations of the
Guarantor are additional to, and not instead of, any security or other
guarantee at any time existing in favour of MLI, whether from the
Guarantor or otherwise, and may be enforced without first having recourse
to the Customer, any other person, any security or any other guarantee.
The Guarantor irrevocably waives all notices and (except as required by
Clause 1) demands of any kind.
4. So long as the facilities are outstanding or any sum remains payable
under the Agreements:-
(1) any right of the Guarantor, by reason of the performance of any of
its obligations under this Guarantee, to be indemnified by the
Customer or to take the benefit of or enforce any security or other
guarantee shall be exercised and enforced only in such manner and on
such terms as MLI may reasonably require to ensure satisfaction of
the customer's obligation to MLI; and
(2) any amount received or recovered by the Guarantor (a) as a result of
any exercise of any such right or (b) in the winding-up or
dissolution of the Customer shall be held in trust for MLI and
immediately paid to MLI
5. The Guarantor shall on demand by MLI indemnify MLI against any funding or
other cost, loss, expense or liability sustained or incurred by it as a
result of its being required for any reason (including any bankruptcy,
insolvency, winding-up, dissolution or similar law of any jurisdiction)
to refund all or part of any amount received or recovered by it in
respect of any sum payable by the Customer under the Agreements and shall
in any event pay to it on demand by MLI the amount so refunded by it.
6. For the purpose of enabling MLI to maximise its recoveries in any actual
or potential winding-up or dissolution, any amount received or recovered
by MLI (otherwise than as a result of a payment to it by the Customer) in
respect of any sum payable by the Customer under the Agreements may be
placed by the recipient in a suspense account. That amount may be kept
there unless and until MLI is satisfied that it is not obliged to pay any
further sums under the Agreements and that it has irrevocably received or
recovered all sums payable to it under the Agreements.
7. The certificate of an officer or employee of MLI as to any amount payable
to MLI under this Guarantee shall, save for manifest error, be final,
conclusive and binding on the Guarantor.
<PAGE>
Page 51 of 62 Pages
8. All payments by the Guarantor shall be made free and clear of any
restrictions or conditions, without set-off or counterclaim, and free and
clear of, and (subject as hereinafter provided) without deduction for,
any taxes deductions or withholdings of any nature. If any deduction or
withholding on account of any such tax or other amount is required by law
to be made from any payment, the Guarantor shall pay in the same manner
and at the same time such additional amounts as will result in receipt by
MLI free from any liability in respect of any such deduction or
withholding, of such amount as would have been received by it had no such
deduction or withholding been required to be made.
9. The Guarantor shall pay all amounts hereby guaranteed to such account as
MLI may notify to the Guarantor and in the same currency and funds as
such amounts are payable by the Customer under the Agreements (the
"Currency of Account"). Any amount received or recovered by MLI in a
currency other than the appropriate Currency of Account (whether as a
result of, or of the enforcement of, a judgment or order of any court of
jurisdiction, in the winding-up or dissolution of the Customer, the
Guarantor, or otherwise) in respect of any sum due to it from the
Guarantor under this Guarantee shall only constitute a discharge to the
Guarantor to the extent of the amount in that Currency of Account which
MLI is able, in accordance with its usual practice, to purchase with the
amount so received or recovered in that other currency on the date of
that receipt or recovery (or, if it is not practicable to make that
purchase on that date, on the first date on which it is practicable to do
so). If that amount in that Currency of Account is less than the amount
expressed to be due to MLI under this Guarantee, the Guarantor shall
indemnify it against any loss sustained by it as a result. In any event,
the Guarantor shall indemnify it against the cost of making any such
purchase.
10. The Guarantor represents and warrants to MLI that:-
(A) it is a corporation or limited partnership duly organised or
incorporated and existing under the laws of the jurisdiction of its
establishment and has the power and authority to own its assets and
to conduct the business which it conducts, and the execution of and
performance under this Guarantee by it will not violate or exceed
any guaranteeing or other powers or restrictions granted or imposed
under any law to which it is subject, its constitutional documents
or any agreement to which it is a party or which is binding on it or
its assets;
(B) all acts, conditions and things required to be done, fulfilled and
performed in order to enable it lawfully to execute and perform its
obligations under this Guarantee and to ensure that its obligations
are legal, valid and binding have been done, fulfilled and
performed;
(C) it has the power to execute and perform and comply with its
obligations under this Guarantee and has taken all necessary action
to authorise such execution and performance;
(D) it will obtain and maintain in effect and comply with the terms of
all necessary consents, registrations and the like of or with any
governmental or other regulatory body or other regulatory body or
authority applicable to its obligations under this Guarantee;
(E) its obligations under this Guarantee are binding and enforceable at
law;
<PAGE>
Page 52 of 62 Pages
(F) it is not in default under any agreement to which it is a party or
by which it or its assets is or are bound and no litigation,
arbitration or administrative proceedings are current or pending,
which default, litigation, arbitration or administrative proceedings
are material in the context of this Guarantee;
(G) it is not necessary or advisable in order to ensure the validity,
effectiveness, performance, or enforceability of this Guarantee that
any document be filed, registered or recorded in any public office
or elsewhere.
The Guarantor further represents and warrants to MLI that each of the
representations and warranties in (A) to (G) above will be correct and
complied with in all respects during the continuance of' the facilities and so
long as any sum remains payable under the Agreements, as if repeated then by
reference to the then existing circumstances.
12. This Guarantee shall benefit MLI and its successors and assigns, MLI
may at any time assign all or part of its rights under this
Guarantee. Any such assignee shall be entitled to the full benefit
of this Guarantee to the same extent as if it were an original party
in respect of the rights assigned to it. MLI may disclose to any
potential assignee or any other person who has entered or proposes
to enter into contractual arrangements with it in relation to or
concerning the Agreements or this Guarantee such information about
the Customer, the Guarantor, the Agreements and this Guarantee as it
may think fit.
13. MLI is the agent for the purposes of this Guarantee and authorises
it to take such action as contemplated by this Guarantee, and in
particular authorises it to receive payment of any monies payable to
MLI under or in connection with this Guarantee.
14. This Guarantee shall not be discharged nor shall the liability of
the Guarantor be affected by any amalgamation or merger of MLI, or
the Guarantor with any other company, or any reconstruction or
change in the constitution of MLI, or the Guarantor, or any change
in the name, style or constitution of MLI, or the Guarantor or, as
the case may be, in the persons who from time to time constitute the
general and/or limited partners in the Guarantor, and this Guarantee
shall be binding on the Guarantor and on all such persons.
15. Any demand or other notice under this Guarantee shall be made in
writing by MLI acting by one of its officers or employees and may be
sent by post or hand delivered to the address of the Guarantor
specified below, or sent by facsimile to the facsimile number
specified below, or in each case to such other address and/or
facsimile number as the Guarantor has from time to time notified to
MLI. Notices shall be deemed to have been received seven days after
being posted and immediately on the day of delivery or of confirmation
of facsimile receipt in the case of hand delivered or facsimile
communication.
16. No failure by MLI to exercise, and no delay by MLI in exercising,
any right or remedy will operate as a waiver thereof, nor will any
single or partial exercise of any such right or remedy preclude any
other or further exercise thereof or the exercise of any other right
or remedy. The rights and remedies provided in this Guarantee are
separate, independent, and cumulative and not exclusive of any other
rights or remedies (including any other security or guarantee) to
which MLI is at any time entitles anywhere, whether by operation of
law or otherwise.
<PAGE>
Page 53 of 62 Pages
17. If at any time any provision of this Guarantee is or becomes illegal,
invalid or enforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions of this Guarantee, nor the legality, validity or
enforceability of such provisions under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
18. This Guarantee may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
19. This Guarantee shall be governed by and construed in accordance with
English Law.
20. In relation to any legal action or proceedings arising out of or in
connection with the Guarantee ("Proceedings") the Guarantor, for the
benefit of MLI irrevocably submits to the jurisdiction of the courts of
England and any New York State of United States Federal court sitting in
New York City, and waives any objection to Proceedings in such courts on
the grounds of venue or on the grounds that the Proceedings have been
brought in an inconvenient forum. Those submissions shall not affect
MLI's right to take proceedings in any other court of competent
jurisdiction, nor shall the taking or Proceedings in any court of
competent jurisdiction preclude MLI from taking Proceedings in any other
court of competent jurisdiction (whether concurrently or not.)
<PAGE>
Page 54 of 62 Pages
Dated:
LF Strategic Realty Investors, L.P.
BY: LAZARD FRERES REAL ESTATE INVESTORS LLC, its General Partner
BY: /s/
______________________________________
Principal
Facsimile No:
MERRILL LYNCH INTERNATIONAL
BY:______________________________________
<PAGE>
Page 55 of 62 Pages
EXHIBIT 10
GUARANTEE
TO: Merrill Lynch International ("MLI")
For the Attention of: John Piccitto
20 Farringdon Road
P.O. Box 293
London, EC1M 3NH
1. In consideration of MLI entering into a facilities agreement (as amended
and supplemented from time to time the "Facilities Agreement", which
shall include each transaction entered into and each document issued or
given pursuant to the Facilities Agreement) constituted by a letter dated
May 27th 1998 from MLI, to Prometheus Western Retail LLC (the "Customer")
c/o Lazard Freres, 30 Rockefeller Plaza, 63rd Floor, New York, NY 10020,
USA and MLI entering into a custodian agreement (as amended and
supplemented from time to time, the "Custodian Agreement" and, together
with the Facilities Agreement, the "Agreements") dated May 27th 1998 with
the Customer, and of MLI making available to the Customer the facilities
and services provided for in the Agreements, we, Prometheus Western
Retail Trust (the "Guarantor"), a Trust duly incorporated or organised
under the laws of Maryland and having our principal place of business c/o
Lazard Freres, 30 Rockefeller Plaza, 63rd Floor, New York, NY 10020, USA
hereby unconditionally and irrevocably:-
(A) guarantee that, if for any reason the Customer does not pay any sum
payable by it under the Agreements by the time, on the date and
otherwise in the manner required by the Agreements (whether on the
normal due date, on acceleration or otherwise), the Guarantor will
pay that sum on demand by MLI; and
(B) as separate, independent and alternative stipulations, agree:-
(1) that any sum which , although expressed to be payable by the
Customer under the Agreements, is for any reason (whether or
not now existing and whether or not now known or becoming known
to MLI) not recoverable from the Guarantor on the basis of a
guarantee shall nevertheless be recoverable from it as if it
were the sole principal debtor and shall be paid by it to MLI
on demand; and
(2) as a primary obligation to indemnify MLI against any loss
suffered by it as a result of any sum expressed to be payable
by the Customer under the Agreements not being paid by the
time, on the date and otherwise in the manner required by the
Agreements or any payment obligation of the Customer under the
Agreements being or becoming void, voidable or unenforceable
for any reason (whether or not now existing and whether or not
now known or becoming known to MLI) the amount of that loss
being the amount expressed to be payable by the Customer in
respect of the relevant sum.
2. As between the Guarantor and MLI but without affecting the Customer's
obligations, the Guarantor shall be liable under this Guarantee as if it
were the sole principal debtor and not merely a surety. Accordingly, it
shall not be discharged, nor shall its liability be affected, by anything
which would not discharge it or affect its liability if it were the sole
principal debtor (including (1) any time, indulgence, concession, waiver
or consent at any time given to the Customer or any other person, (2) any
amendment or supplement to the Assignments or to any security or other
guarantee, (3) the making or absence of any demand on the Customer or any
other person for payment, (4) the enforcement or absence of enforcement
of the Agreements or of any security or other guarantee, (5) the taking,
existence or release of any security or other guarantee, (6) the
winding-up or dissolution of the Customer or any other person or (7) the
illegality, invalidity, or unenforceability of or any defect
<PAGE>
Page 56 of 62 Pages
in any provision of the Agreements or any of the Customer's obligations
under them).
3. The Guarantor's obligations under this Guarantee are and will remain in
full force and effect by way of continuing security until the facilities
have terminated and MLI has irrevocably received or recovered all sums
payable under the Agreements. Furthermore, those obligations of the
Guarantor are additional to, and not instead of, any security or other
guarantee at any time existing in favour of MLI, whether from the
Guarantor or otherwise, and may be enforced without first having recourse
to the Customer, any other person, any security or any other guarantee.
The Guarantor irrevocably waives all notices and (except as required by
Clause 1) demands of any kind.
4. So long as the facilities are outstanding or any sum remains payable
under the Agreements:-
(1) any right of the Guarantor, by reason of the performance of any of
its obligations under this Guarantee, to be indemnified by the
Customer or to take the benefit of or enforce any security or other
guarantee shall be exercised and enforced only in such manner and on
such terms as MLI may reasonably require to ensure satisfaction of
the customer's obligation to MLI; and
(2) any amount received or recovered by the Guarantor (a) as a result of
any exercise of any such right or (b) in the winding-up or
dissolution of the Customer shall be held in trust for MLI and
immediately paid to MLI
5. The Guarantor shall on demand by MLI indemnify MLI against any funding or
other cost, loss, expense or liability sustained or incurred by it as a
result of its being required for any reason (including any bankruptcy,
insolvency, winding-up, dissolution or similar law of any jurisdiction)
to refund all or part of any amount received or recovered by it in
respect of any sum payable by the Customer under the Agreements and shall
in any event pay to it on demand by MLI the amount so refunded by it.
6. For the purpose of enabling MLI to maximise its recoveries in any actual
or potential winding-up or dissolution, any amount received or recovered
by MLI (otherwise than as a result of a payment to it by the Customer) in
respect of any sum payable by the Customer under the Agreements may be
placed by the recipient in a suspense account. That amount may be kept
there unless and until MLI is satisfied that it is not obliged to pay any
further sums under the Agreements and that it has irrevocably received or
recovered all sums payable to it under the Agreements.
7. The certificate of an officer or employee of MLI as to any amount payable
to MLI under this Guarantee shall, save for manifest error, be final,
conclusive and binding on the Guarantor.
8. All payments by the Guarantor shall be made free and clear of any
restrictions or conditions, without set-off or counterclaim, and free and
clear of, and (subject as hereinafter provided) without deduction for,
any taxes deductions or withholdings of any nature. If any deduction or
withholding on account of any such tax or other amount is required by law
to be made from any payment, the Guarantor shall pay in the same manner
and at the same time such additional amounts as will result in receipt by
MLI free from any liability in respect of any such deduction or
withholding, of such amount as would have been received by it had no such
deduction or withholding been required to be made.
9. The Guarantor shall pay all amounts hereby guaranteed to such account as
MLI may notify to the Guarantor and in the same currency and funds as
such amounts are payable by the Customer under the Agreements (the
"Currency of Account"). Any amount received or recovered by MLI in a
currency other than the appropriate Currency of Account (whether as a
result of, or of the enforcement of, a judgment or order of any court of
jurisdiction, in the
<PAGE>
Page 57 of 62 Pages
winding-up or dissolution of the Customer, the Guarantor, or otherwise)
in respect of any sum due to it from the Guarantor under this Guarantee
shall only constitute a discharge to the Guarantor to the extent of the
amount in that Currency of Account which MLI is able, in accordance with
its usual practice, to purchase with the amount so received or recovered
in that other currency on the date of that receipt or recovery (or, if it
is not practicable to make that purchase on that date, on the first date
on which it is practicable to do so). If that amount in that Currency of
Account is less than the amount expressed to be due to MLI under this
Guarantee, the Guarantor shall indemnify it against any loss sustained by
it as a result. In any event, the Guarantor shall indemnify it against
the cost of making any such purchase.
10. The Guarantor represents and warrants to MLI that:-
(A) it is a corporation or limited partnership duly organised or
incorporated and existing under the laws of the jurisdiction of its
establishment and has the power and authority to own its assets and
to conduct the business which it conducts, and the execution of and
performance under this Guarantee by it will not violate or exceed
any guaranteeing or other powers or restrictions granted or imposed
under any law to which it is subject, its constitutional documents
or any agreement to which it is a party or which is binding on it or
its assets;
(B) all acts, conditions and things required to be done, fulfilled and
performed in order to enable it lawfully to execute and perform its
obligations under this Guarantee and to ensure that its obligations
are legal, valid and binding have been done, fulfilled and
performed;
(C) it has the power to execute and perform and comply with its
obligations under this Guarantee and has taken all necessary action
to authorise such execution and performance;
(D) it will obtain and maintain in effect and comply with the terms of
all necessary consents, registrations and the like of or with any
governmental or other regulatory body or other regulatory body or
authority applicable to its obligations under this Guarantee;
(E) its obligations under this Guarantee are binding and enforceable at
law;
(F) it is not in default under any agreement to which it is a party or
by which it or its assets is or are bound and no litigation,
arbitration or administrative proceedings are current or pending,
which default, litigation, arbitration or administrative proceedings
are material in the context of this Guarantee;
(G) it is not necessary or advisable in order to ensure the validity,
effectiveness, performance, or enforceability of this Guarantee that
any document be filed, registered or recorded in any public office
or elsewhere.
The Guarantor further represents and warrants to MLI that each of the
representations and warranties in (A) to (G) above will be correct and
complied with in all respects during the continuance of' the facilities and so
long as any sum remains payable under the Agreements, as if repeated then by
reference to the then existing circumstances.
12. This Guarantee shall benefit MLI and its successors and assigns, MLI may
at any time assign all or part of its rights under this Guarantee. Any
such assignee shall be entitled to the full benefit of this Guarantee to
the same extent as if it were an original party in respect of the rights
assigned to it. MLI may disclose to any potential assignee or any other
person who has entered or proposes to enter into contractual arrangements
with it in relation to or concerning the Agreements or this Guarantee
such information about the Customer, the Guarantor, the Agreements and
this Guarantee as it may think fit.
<PAGE>
Page 58 of 62 Pages
13. MLI is the agent for the purposes of this Guarantee and authorises it to
take such action as contemplated by this Guarantee, and in particular
authorises it to receive payment of any monies payable to MLI under or
in connection with this Guarantee.
14. This Guarantee shall not be discharged nor shall the liability of the
Guarantor be affected by any amalgamation or merger of MLI, or the
Guarantor with any other company, or any reconstruction or change in the
constitution of MLI, or the Guarantor, or any change in the name, style
or constitution of MLI, or the Guarantor or, as the case may be, in the
persons who from time to time constitute the general and/or limited
partners in the Guarantor, and this Guarantee shall be binding on the
Guarantor and on all such persons.
15. Any demand or other notice under this Guarantee shall be made in writing
by MLI acting by one of its officers or employees and may be sent by post
or hand delivered to the address of the Guarantor specified below, or
sent by facsimile to the facsimile number specified below, or in each
case to such other address and/or facsimile number as the Guarantor has
from time to time notified to MLI. Notices shall be deemed to have been
received seven days after being posted and immediately on the day of
delivery or of confirmation of facsimile receipt in the case of hand
delivered or facsimile communication.
16. No failure by MLI to exercise, and no delay by MLI in exercising, any
right or remedy will operate as a waiver thereof, nor will any single or
partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
The rights and remedies provided in this Guarantee are separate,
independent, and cumulative and not exclusive of any other rights or
remedies (including any other security or guarantee) to which MLI is at
any time entitles anywhere, whether by operation of law or otherwise.
17. If at any time any provision of this Guarantee is or becomes illegal,
invalid or enforceable in any respect under the law of any jurisdiction,
neither the legality, validity or enforceability of the remaining
provisions of this Guarantee, nor the legality, validity or
enforceability of such provisions under the law of any other jurisdiction
shall in any way be affected or impaired thereby.
18. This Guarantee may be executed in any number of counterparts, all of
which taken together shall constitute one and the same instrument.
19. This Guarantee shall be governed by and construed in accordance with
English Law.
20. In relation to any legal action or proceedings arising out of or in
connection with the Guarantee ("Proceedings") the Guarantor, for the
benefit of MLI irrevocably submits to the jurisdiction of the courts of
England and any New York State of United States Federal court sitting in
New York City, and waives any objection to Proceedings in such courts on
the grounds of venue or on the grounds that the Proceedings have been
brought in an inconvenient forum. Those submissions shall not affect
MLI's right to take proceedings in any other court of competent
jurisdiction, nor shall the taking or Proceedings in any court of
competent jurisdiction preclude MLI from taking Proceedings in any other
court of competent jurisdiction (whether concurrently or not.)
<PAGE>
Page 59 of 62 Pages
Dated:
LF Strategic Realty Investors, L.P.
BY: PROMETHEUS WESTERN RETAIL TRUST
BY: /s/
_____________________________________
President
Facsimile No:
MERRILL LYNCH INTERNATIONAL
BY:
____________________________
<PAGE>
Page 60 of 62 Pages
EXHIBIT 11
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Telephone: 0171-772 1000
Telex: 9413941
Fax: 0171-772 2917/2980
Merrill Lynch
30th June 1999
Prometheus Western Retail LLC
C/o Lazard Freres
30 Rockefeller Plaza
63rd Floor
New York, NY 10020
USA
Dear Sirs
We write with reference to our letter of May 27th 1998 whereby Merrill Lynch
International and Merrill Lynch International Bank Limited offered and
commenced revolving facilities to Prometheus Western Retail LLC, and to the
subsequent amendment to Clause (C) dated 30th April 1999.
We hereby confirm that clause (D) is revised to read: The facility shall
terminate on July 30th 1999.
All other terms and conditions remain unchanged.
Yours faithfully
For and on Behalf of
Merrill Lynch International
/s/ David Stockwell
David W. Stockwell
Director of Equity Markets
Global Equity Financing
For itself as trustee and agent for
Merrill Lynch International Bank Limited
Registered in England (No. 2312079)
Registered Office: 25 Ropemaker Street, London EC2Y 9LY
A Subsidiary of Merrill Lynch & Co. Inc., Delaware, U.S.A.
Regulated by The Securities and Futures Authority Limited
Member of the London Stock Exchange
<PAGE>
Page 61 of 62 Pages
EXHIBIT 12
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Telephone: 0171-772 1000
Telex: 9413941
Fax: 0171-772 2917/2980
Merrill Lynch
31st August 1999
Prometheus Western Retail LLC
C/o Lazard Freres
30 Rockefeller Plaza
63rd Floor
New York, NY 10020
USA
Dear Sirs
We write with reference to our May 27th 1998, whereby Merrill Lynch
International and Merrill Lynch International Bank Limited offered and
commenced revolving facilities to Prometheus Western Retail LLC, and to the
subsequent amendment to Clause (C) dated 30th April 1999.
We hereby confirm that clause (D) is revised to read: "The facility shall
terminate on 15th September 1999".
All other terms and conditions remain unchanged.
Yours faithfully
For and on Behalf of
Merrill Lynch International
/s/ Anthony van den Bosch
Anthony van den Bosch
Vice President
Global Equity Financing
For itself as trustee and agent for
Merrill Lynch International Bank Limited
Registered in England (No. 2312079)
Registered Office: 25 Ropemaker Street, London EC2Y 9LY
A Subsidiary of Merrill Lynch & Co. Inc., Delaware, U.S.A.
Regulated by The Securities and Futures Authority Limited
Member of the London Stock Exchange
VAT No. G9 245 1224 D3
<PAGE>
Page 62 of 62 Pages
EXHIBIT 13
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 3NH
Telephone: 0171-772 1000
Telex: 9413941
Fax: 0171-772 2917/2980
Merrill Lynch
15th September 1999
Prometheus Western Retail LLC
C/o Lazard Freres
30 Rockefeller Plaza
63rd Floor
New York, NY 10020
USA
Dear Sirs,
We write with reference to our May 27th 1998, whereby Merrill Lynch
International and Merrill Lynch International Bank Limited offered and
commenced revolving facilities to Prometheus Western Retail LLC, and to the
subsequent amendment to Clause (C) dated 30th April 1999.
We hereby confirm that clause (D) is revised to read: "The facility shall
terminate as of 30th September 1999".
All other terms remain unchanged.
Yours faithfully
For and on Behalf of
Merrill Lynch International
Yours sincerely,
/s/ David Stockwell
David Stockwell
Director of
Equity Markets
Global Equity Financing
For itself as trustee and agent for
Registered in England (No. 2312079)
Registered Office: 25 Ropemaker Street, London EC2Y 9LY
A Subsidiary of Merrill Lynch & Co. Inc., Delaware, U.S.A.
Regulated by The Securities and Futures Authority Limited
Member of the London Stock Exchange
VAT No. G9 245 1224 D3
