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ble standby letter of credit initially in the amount of
$8,872,245 (Partnership letter of credit) that was to be issued
by CIBC and that was to name Partnership as beneficiary in order
to secure Partnership's obligations under the TIAA letter of
credit; and (3) Partnership, the obligor under the TIAA term loan
and the lessor under the lease agreement, to assign collaterally
the Partnership letter of credit to CIBC. During the 11.5-month
period of zero rent, the TIAA letter of credit and the Partner-
ship letter of credit were intended to secure the obligation of
BCE and/or of PFI, the partners of Partnership, to make addi-
tional capital contributions to Partnership during that period as
required by the partnership agreement in order to service the
TIAA term loan.
As required by the purchase agreement, as of the time of its
closing, (1) Partnership delivered to TIAA the TIAA letter of
credit that was issued by CIBC, effective June 15, 1988, in an
amount not exceeding $8,872,245 and that named TIAA as benefi-
ciary;9 (2) BCE delivered to Partnership the Partnership letter
of credit that was issued by CIBC, effective June 15, 1988, in
the amount of $8,872,245 and that named Partnership as benefi-
9 The TIAA letter of credit that Partnership delivered to TIAA
expired on Mar. 1, 1989, and was deemed automatically extended
without amendment for 1 year from that or any future expiration
date until no later than June 30, 1991 (unless CIBC notified TIAA
and Partnership at least 40 days prior to any such expiration
date that it decided not to extend the TIAA letter of credit).
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