Amendment to General Statement of Beneficial Ownership — Schedule 13D
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 13D/A Amendment to General Statement of Beneficial 58 124K
Ownership
2: EX-1 Underwriting Agreement 4 14K
3: EX-2 Plan of Acquisition, Reorganization, Arrangement, 24 78K
Liquidation or Succession
4: EX-3 Articles of Incorporation/Organization or By-Laws 6 21K
5: EX-4 Instrument Defining the Rights of Security Holders 17 50K
6: EX-5 Opinion re: Legality 12 38K
EX-2 — Plan of Acquisition, Reorganization, Arrangement, Liquidation or Succession
Exhibit Table of Contents
Merrill Lynch International
20 Farringdon Road
P.O. Box 293
London EC1M 2NH
Telephone: 0171 892 4920
Fax: 0171 892 4860
London EC1M 3NH
Telephone: 0171 892 4920
Fax: 0171 892 4860
17 November 1999
------
Commonwealth Atlantic Properties Investors Trust
Prometheus Investment Holding Corp.
Prometheus Western Retail LLC
c/o Lazard Freres Real Estate Investors L.L.C.
30 Rockefeller Plaza
50th Floor
New York, NY 10020
Dear Sirs
We write to set out the terms and conditions on which Merrill Lynch
International ("MLI") offers revolving facilities (the "Facilities") to
Commonwealth Atlantic Properties Investors Trust, Prometheus Investment
Holding Corp. and Prometheus Western Retail, LLC, acting jointly and
severally, as co-borrowers (collectively, 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 an
"Advance").
(B) MLI makes available a securities lending facility, under which MLI is
prepared to consider lending Securities to the Borrower (each such loan
a "Securities Loan").
(C) MLI makes available a guarantee facility, under which MLI is prepared to
consider issuing guarantees and/or indemnities in respect of the
obligations of the Borrower to third parties (each such guarantee and/or
indemnity ("Guarantee")), and
(D) 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 Prometheus Western Retail, LLC as set out in the
Terms Sheet referred to below and the collateral provided by LF
Strategic Realty Investors L.P. and Prometheus AAPT Holdings, L.L.C.
(collectively, the "Guarantor") as set out in the Collateralised
Guaranty dated of even date herewith executed by each Guarantor.
The spread for the purposes of the Facilities shall be 2.625% per annum.
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.
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.
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. GB 245 1224 93
Yours faithfully,
For and on behalf of
MERRILL LYNCH INTERNATIONAL
/s/ John Piccitto
............................................................................
To: Merrill Lynch International
c/o Merrill Lynch International Limited
20 Farringdon Road
P.O. Box 293
London
EC1M 3NH
Dated 17 day of November, 1999
2
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,
.............................................................................
Commonwealth Atlantic Properties Investors Trust,
a Maryland real estate investment trust
c/o Lazard Freres Real Estate Investors L.L.C.
30 Rockefeller Plaza, 50th Floor
New York, NY 10020
By: /s/ John A. Moore
-----------------------------
Name: John A. Moore
Title: Chief Financial Officer
Prometheus Investment Holding Corp.,
a Delaware corporation
c/o Lazard Freres Real Estate Investors, L.L.C.
30 Rockefeller Plaza, 50th Floor
New York, NY 10020
By: /s/ John A. Moore
-----------------------------
Name: John A. Moore
Title: Chief Financial Officer
Prometheus Western Retail, LLC,
a Delaware limited liability company
c/o Lazard Freres Real Estate Investors, L.L.C.
30 Rockefeller Plaza, 50th Floor
New York, NY 10020
By: Prometheus Western Retail Trust,
a Maryland real estate investment trust
its managing member
By: /s/ John A. Moore
-----------------------------
Name: John A. Moore
Title: Chief Financial Officer
3
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 Merrill Lynch International Bank Limited
("MLIB") to be its base rate, being calculated by reference to a
weighted average of rates (at the weighted percentage indicated below)
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 (25%), one week (50%) and one month
(25%), 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 centre of the
country of each other relevant currency (or, in relation to Euro, on any
day on which the Trans-European Automated Real-Time Gross Settlement
Express Transfer (TARGET) System is open), 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 or such other person in each case pursuant to
the Custodian Agreement.
"Custodian" means MLI in its capacity as such under the Custodian
Agreement.
"Custodian Agreement" means the Custodian Agreement between MLI,
Prometheus Western Retail LLC, LF Strategic Realty Investors L.P. and
Prometheus AAPT Holdings LLC, as amended from time to time.
"Dollar(s)" and "$" means lawful currency of the United States of
America.
"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 (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, capitalisation 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
as amended by First Amendment to Facility Letter ("First Amendment")
dated 17 November 1999.
"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
and Guarantees (including amounts payable under Clause 5.2).
-2-
"Securities" means the Collateral Securities (as set forth in Schedule
2) and shall include all other 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 may at any time be deposited with the
Custodian to be held on the terms of the Custodian Agreement, 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 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.
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 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.
-3-
For this purpose, the unused portion of the Facilities at any date is
the "Total Amount Available" specified in the First Amendment 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 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:
-4-
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
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
-5-
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 Intentionally Omitted
5 Guarantee Facilities
5.1 Issue: MLI (in this Clause 5 and Clause 7 and in relation to a Guarantee
provided by it, 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 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
-6-
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 Security Provisions:
6.1.1 The Borrower, as continuing security for the due payment of
the Secured Liabilities and with full title guarantee, and for
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby
irrevocably pledges, grants and creates a first priority lien
on, and security interest in favour of MLI 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 and all security entitlements related thereto
(together, the "Pledged Securities"). The security created by
or pursuant to this Agreement shall affect and include all
dividends, distributions and interest on and other proceeds of
-7-
the Pledged Securities or other property hereby pledged or
charged, whether 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 Pledged
Securities or other property hereby pledged or charged, in
each case only to the extent that any of the foregoing are
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, and for
other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, hereby
irrevocably pledges, grants and creates a first priority lien
on, and security interest in favour of MLI all monies and
investment property (and all the Borrower's right, title and
interest in and to such monies and the debt represented
thereby and investment property) 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
conveys and assigns absolutely to MLI the Hedging Contracts
and all its rights and benefits under or in connection with
the Hedging Contracts, including in particular all monies paid
or payable in respect thereof and all other rights or benefits
thereunder or in connection therewith (together, the "Pledged
Contracts"). Provided that, upon receipt from the Borrower of
a request made after termination of the Facilities and subject
to the Secured Liabilities (other than contingent liabilities
under (a) the Guarantees and (b) any indemnification
provisions contained in this Agreement, the Custodian
Agreement or any other document evidencing or securing the
Facilities (as defined in the Letter) (collectively, the
"Contingent 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 Pledged Contracts and the
Pledged Securities as then remains and/or execute a formal
release with respect thereto.
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 (other
than the Contingent 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
-8-
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 that, at all times
during the continuance of the Facility and until the Secured
Liabilities (other than the Contingent 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
Pledged 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 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 Pledged Securities (except as contemplated by this
Agreement or the Custodian Agreement or with MLI's prior
written consent).
MLI acknowledges that the Borrower may request consent to options,
assignments and transfers (including agreements therefor) on or of
Pledged 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, MLI 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, subject to the last
sentence of Clause 6.1.3, continue in full force and effect
-9-
until MLI reassigns or executes a formal release with respect
to 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 now or at any time has 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
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 Pledged
Securities, the Collateral Account (and the monies for the time being
standing to the credit thereof and the debt represented thereby) and the
Pledged Contracts 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 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 Pledged
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.
-10-
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 Customer Account (as
defined in the custodian Agreement) as MLI may require in order to
ensure that the amount of the outstanding Advances divided by the
aggregate of the market value of the Securities and the monies standing
to the credit of the Customer Account will at no time exceed the
Maintenance Margin (as defined in the Letter), the Secured Liabilities
(all as determined by MLI).
6.5 MLI shall have all rights and remedies as a secured party at law or in
equity including, without limitation, the rights of a secured party
under the Uniform Commercial Code.
7 Cancellation and Repayment
7.1 General: The Borrower will (A) after an Event of Default has occurred on
demand of MLI at any time or (B) 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 of any governmental or other
regulatory body or authority for MLI 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
7.1.3 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 and/or paid into the Collateral
Account and retained there for the purpose of application
and/or applied by MLI in or towards satisfaction of the
Borrower's obligations under or in connection with this
Agreement.
-11-
Upon the making of any such demand under (A) or (B) above the Facilities
shall be cancelled (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 Intentionally Omitted.
7.4 Margin Call not Required: Any action referred to in this Clause 7 may be
taken by MLI 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 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. Notwithstanding
-12-
the foregoing, the Borrower shall not be responsible for income and
"doing business" taxes imposed upon MLI.
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(the "payee"), both before and after judgement. 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 MLI 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
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
(other than any "doing business" consents, registrations and the like
which MLI is required by applicable law to obtain or maintain)
-13-
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 that have not already been filed, registered or recorded
9.8 except by this Agreement, the Custodian Agreement and the Collateralised
Guaranty (as defined in the Custodian Agreement), neither Prometheus
Western Retail LLC nor any Guarantor (as defined in the Letter)
(collectively, the "Securities Holders") has 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 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 owned by
any such Securities Holder
9.9 except for the security created by or pursuant to this Agreement, the
Custodian Agreement and the Collateralised Guaranty, no mortgage,
charge, pledge, lien, claim or other similar 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 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 (other than the Contingent
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:
-14-
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
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 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 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
10.8 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
10.9 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
or
-15-
10.10 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
judgement of bankruptcy or insolvency or the making of any such
appointment or the making of an order for Winding-up, or (2) is not
discharged within 60 days or
10.11 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
10.12 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
10.13 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 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 10.9 to 10.13 (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").
-16-
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 Pledged 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 Pledged 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 Pledged
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 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 until all Secured
Liabilities (other than the Contingent Liabilities) have been discharged
to the satisfaction of MLI 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
-17-
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 Pledged 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 Pledged 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 Pledged 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, MLI 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 it
(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 satisfaction of any of the liabilities of the Borrower to
MLI, 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.
MLI shall have authority to purchase one currency with another for
purposes of this Clause 11.
12 Indemnity
The Borrower shall on demand indemnify MLI (in this Clause 12, the
"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
-18-
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 judgement 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 judgement 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 Intentionally Omitted.
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 the partnership
of which he or it is a general partner is and will be fully bound by
this Agreement as the Borrower.
14.3 MLI 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
-19-
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 each assignee or transferee. Any reference in
this Agreement to MLI shall be construed accordingly and shall also
include its successors. Any such assignee or transferee shall be
entitled to the full benefit of this Agreement to the same extent as if
it were an original party in respect of the rights or obligations
assigned or transferred to it.
14.4 MLI 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 (other than the Contingent 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 audited 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 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 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 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
-20-
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.
18.2 The certificate of an officer or employee of MLI as to the calculation
of any sum payable to MLI under the terms of 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.
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 MLI 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. 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
-21-
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 two days after being deposited for overnight
delivery with any reputable overnight courier service and immediately in
the case of a telex, fax or oral communication.
20 Governing law
This Agreement (except as set forth below) 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 Borrower hereby and for the benefit of
MLI 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. Section 6 of this Agreement and the
provisions regarding the creation, perfection, priority and enforcement
of the lien of this Agreement, and the determination of deficiency
judgments, shall be governed by the laws of New York State. Those
submissions shall not affect MLI'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 from
taking Proceedings in any other court of competent jurisdiction (whether
concurrently or not).
-22-
↑Top
Filing Submission 0000893750-99-000665 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)
Copyright © 2024 Fran Finnegan & Company LLC – All Rights Reserved.
About — Privacy — Redactions — Help —
Sun., Apr. 28, 8:14:05.1am ET 