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DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT
(1290 Excess Amount)
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Dated: October 10, 1996
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C/M: 11764.0001 346143.8
DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT
THIS DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT (this
"Agreement") made as of the 10th day of October, 1996, between 237/1290 UPPER
TIER ASSOCIATES, L.P., a Delaware limited partnership (the "Company"), and O&Y
NY BUILDING CORP., a Delaware corporation and O&Y EQUITY COMPANY, L.P., a
Delaware limited partnership, as debtor and debtor in possession, both having an
address c/o Olympia & York (U.S.A.), 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000
(collectively referred to hereinafter as the "O&Y Partners"), and BANKERS TRUST
COMPANY, a New York corporation having an office at Four Xxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Trustee").
W I T N E S S E T H:
WHEREAS, 000 Xxxx Xxxxxx Associates, L.L.C. and 1290
Associates, L.L.C. (collectively, the "Debtors") were the Debtors under Chapter
11 Case Nos. 96B42177 and 96B42178 filed with the United States Bankruptcy Court
for the Southern District of New York (the "Bankruptcy Court");
WHEREAS, the Debtors were the obligors under certain notes
(the "Notes") in the original aggregate principal amount of $970,000,000, which
Notes are secured by a first mortgage encumbering the properties described on
Exhibit A attached hereto and made a part hereof (the "Properties") pursuant to
a certain Mortgage Spreader and Consolidation Agreement and Trust Indenture
dated as of March 20, 1984 between Fame Associates, O&Y Equity Corp., Olympia &
York Holdings Corporation (the predecessors-in-interest to the Company), Olympia
& York 2 Broadway Land Company, Olympia & York 2 Broadway Company and
Manufacturers Hanover Trust Company (the predecessor-in-interest to the
Trustee), as the same may have and may be amended from time to time (the
"Indenture");
WHEREAS, the O&Y Partners are partners of the Company;
WHEREAS, pursuant to the order dated September 20, 1996,
entered by the Bankruptcy Court confirming the plan of reorganization of the
Debtors under Chapter 11 of the United States Bankruptcy Code (the "Plan of
Reorganization"), (i) the O&Y Partners assumed the obligation of the Debtors to
pay the 237 Excess Amount (being an amount equal to $60,000,000) pursuant to the
237 Assumption and Security Agreement and the Debtors were released from their
obligation to repay such amount, (ii) the Debtors merged into the Company
pursuant to the Merger Agreement and the Company thereby became the obligor
under the Notes, and (iii) the Company, the O&Y Partners and the Trustee are
entering into this Agreement to evidence (a) the assumption by the O&Y Partners
of the Company's obligation to pay an amount (the "1290 Excess Amount") equal to
the excess of (x) the full amount in the aggregate of all principal, interest,
fees and charges due and owing as of April 23, 1996 (the "Petition Date") under
the Indenture, the Notes and all documents and instruments related thereto after
the prior assumption by the O&Y Partners of the 237 Excess Amount, over (y)
$700,000,000, representing $202,603,492 of the $902,603,492 outstanding
principal under the Indenture as of the Petition Date and all interest, fees and
charges due and owing as of the Petition Date less the 237 Excess Amount
previously assumed by the O&Y Partners, (b) the release by the Trustee of the
Company from the obligation to repay the 1290 Excess Amount assumed by the O&Y
Partners hereunder, and (c) the granting by the O&Y Partners to the Trustee of a
security interest in their interests as partners
C/M: 11764.0001 346143.8
in the Company to secure their obligation to pay the amounts assumed
hereunder; and
WHEREAS, all terms not defined herein shall be as defined in
the Plan of Reorganization;
NOW, THEREFORE, in consideration of the mutual covenants set
forth herein and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the Company, the O&Y Partners and
the Trustee covenant and agree as follows:
1. Assumption of Debt. The O&Y Partners, pursuant to the Plan
of Reorganization, hereby assume the obligations of the Company to repay the
1290 Excess Amount and all interest and other charges which may hereafter accrue
thereon (the "Assumed Debt"), on a pro rata basis with the Company's obligation
to pay the remaining amount evidenced by the Notes and secured by the Indenture.
2. Security Interest. (a) As security for the O&Y Partners'
obligation to repay the Assumed Debt in accordance with this Agreement, and the
observance and performance by the O&Y Partners of all of the terms, covenants
and provisions of this Agreement on the part of the O&Y Partners to be observed
and performed, the O&Y Partners hereby transfer, pledge, assign, set over and
grant to the Trustee, for the benefit of the Noteholders, a first priority
perfected security interest in and to the following collateral wherever located,
whether now existing or hereafter created or acquired (collectively, the
"Collateral"):
(i) all of the O&Y Partners' share, right, title or interest in and to
the Company and in and to the assets of the Company and the business thereof,
including without limitation, all tangible and intangible property and assets of
any nature whatsoever owned by the Company or in which the Company has an
interest, and the Company's goodwill, capital, profits and assets;
(ii) all contract rights, accounts, instruments, documents, chattel
papers, general intangibles, claims, powers, privileges, benefits and remedies
of the O&Y Partners arising under or from any provision of the agreement of
limited partnership of the Company or arising out of the O&Y Partners'
partnership interests in the Company; and
(iii) all cash or non-cash proceeds of any of the foregoing.
(b) The O&Y Partners agree that the security interests granted
by them under the 237 Assumption and Security Agreement in and to their
membership interests in the Debtors shall attach to their interests in the
Collateral and shall be co-equal in lien and priority with the security
interests granted in paragraph (a) above.
3. Release from Debt. The Trustee (for itself and on behalf of
the Noteholders) hereby releases the Company and each partner thereof from any
obligation to repay any portion of the Assumed Debt (including, but not limited
to, any obligation of a partner based on a deficit capital account of such
partner). The foregoing release is without effect to the Company's obligation to
pay the remaining outstanding principal balance under the Notes and secured by
the Indenture (i.e. $700,000,000) and all interest and other charges which may
hereafter accrue thereon or be payable in connection therewith. The Trustee
hereby agrees that the obligation of the O&Y Partners to repay the Assumed Debt
will no longer be secured by the lien of the Indenture encumbering the
Properties.
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4. Covenants. The O&Y Partners jointly and severally covenant
and agree with the Trustee as follows:
(a) The O&Y Partners shall observe and perform each and every term,
covenant and provision to be observed and performed by the O&Y Partners pursuant
to the terms of the operating agreements of the Company and the Indenture
applicable to them or any other agreement, mortgage, deed of trust, lease or
recorded instrument affecting or pertaining to the O&Y Partners or the Company.
(b) The O&Y Partners shall give the Trustee immediate notice of (i) the
occurrence of any Event of Default (as hereinafter defined) under this
Agreement, (ii) the occurrence of any event which with the lapse of time or
notice or both would constitute an Event of Default or cause a dissolution of
the Company, or (iii) any action or proceeding to which the O&Y Partners or the
Company are a party, or affecting the O&Y Partners or the Company, an adverse
determination of which would affect the O&Y Partners, the Company or the
Collateral in a materially adverse manner.
5. Defaults. Any default by the O&Y Partners or the Company
under this Agreement (including a failure to pay the Assumed Debt when due)
which continues beyond five (5) days after written notice thereof by the Trustee
to the O&Y Partners and the Company (without duplication of any cure period
under the Indenture) shall constitute an Event of Default hereunder.
6. Rights and Remedies of Trustee. If an Event of Default
shall occur, then the Trustee may, without the requirement of any notice declare
any or all of the Assumed Debt to be immediately due and payable, and may
immediately and without demand exercise any of its rights under the Uniform
Commercial Code of the State of New York, it being expressly agreed that the
Trustee may, at its sole option, exercise such right with respect to less than
all of the Collateral, such as, more specifically but without limitation, with
respect only to distributions and proceeds of the Company, leaving unexercised
its rights with respect to the remainder of the Collateral; provided, however,
that such partial exercise shall in no way be deemed a waiver of the Trustee's
right to exercise its rights with respect to all or another portion of the
remainder of the Collateral at a later time or times. Notwithstanding anything
to the contrary contained in this Agreement, the Trustee's sole recourse shall
be to the Collateral and the obligations in respect of the Assumed Debt shall be
non-recourse to the O&Y Partners.
7. No Assumptions of Duties; Limitation on Liabilities.
Nothing herein contained shall be construed to constitute the Trustee as either
the O&Y Partners' or the Company's agent or as a partner in the Company for any
purpose whatsoever except for the limited purposes of receiving the Collateral
as provided herein. The Trustee does not by anything contained herein assume any
of the O&Y Partners' or the Company's obligations under any contract, agreement,
document or instrument relating to or binding upon the O&Y Partners or the
Company or constituting a part of or relating to the Collateral and the Trustee
will not be responsible in any way for the O&Y Partners' or the Company's
performance of any of the terms and conditions thereof. Neither the Trustee nor
any of its directors, officers, agents or employees shall be liable to any
person or entity for any action taken or omitted by the Trustee or its officers,
directors, agents or employees hereunder or with respect to any transaction
contemplated by this Agreement except for the Trustee's or such officers',
directors', agents' or employees' gross negligence or wilful misconduct.
8. Cessation of Liability of O&Y Partners. Notwithstanding
anything to the contrary contained in this Agreement, upon execution by the
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C/M: 11764.0001 346143.8
Trustee of the Excess Amount Release, any and all liabilities and obligations of
the O&Y Partners under this Agreement shall cease, including, without
limitation, with respect to any breaches of covenants or failures to perform any
obligations of the O&Y Partners prior to the execution of the Excess Amount
Release.
9. Non-Waiver by Trustee. Neither failure nor delay on the
part of the Trustee to exercise any right, remedy, power or privilege provided
for herein or pursuant to the Plan of Reorganization or by statute or at law or
in equity shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, remedy, power or privilege preclude any other or
further exercise thereof or the exercise of any other right, remedy, power or
privilege. No modification or waiver of any provision of this Agreement, nor
consent to any departure by the O&Y Partners therefrom shall be effective unless
the same shall be in writing and signed by the Trustee, and then such waiver or
consent shall be effective only in the specific instance and for the purpose for
which given. No notice to or demand on the O&Y Partners in any case shall, of
itself, entitle the O&Y Partners to any other or further notice or demand in
similar or other circumstances. If any notice is required by law to be given to
the O&Y Partners by the Trustee, five (5) days notice given by mail and
addressed to the O&Y Partners, at the addresses herein set forth shall be deemed
for all purposes to be reasonable notice.
10. Company Consent. The Company consents in all respects to
the transactions effected by this Agreement, and agrees to be bound by all of
the terms, covenants and provisions of this Agreement, including, without
limitation, the right of the Trustee to declare the Assumed Debt immediately due
and payable in accordance with the provisions hereof.
11. Notices. Any notice, request, demand, statement or consent
made hereunder shall be in writing and shall be sent by registered or certified
mail, return receipt requested, and shall be deemed given when postmarked and
addressed as follows:
If to the O&Y Partners or to the Company:
c/o Olympia & York Companies
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Managing Attorney
If to the Trustee:
Bankers Trust Company
Four Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Corporate Trust and Agency Group
Mr. Xxxxx Xxxxx
With a copy to:
Xxxxxx Xxxx & Xxxxxx LLP
000 Xxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Esq.
Each party may designate a change of address by notice to the other party given
at least 15 days before such change of address is to become effective.
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C/M: 11764.0001 346143.8
12. No Oral Change. This Agreement may not be modified,
amended, changed, discharged or terminated except by an agreement in writing
signed by the parties hereto.
13. Severability. If any term, covenant or provision of this
Agreement shall be held to be invalid, illegal or unenforceable in any respect,
this Agreement shall be construed without such term, covenant or provision.
14. Parties Bound. This Agreement shall be binding upon and
inure to the benefit of the O&Y Partners, the Company and the Trustee and their
respective heirs, executors, administrators, legal representatives, successors
and assigns, including without limitation any successor or co-trustee appointed
in accordance with the provisions of the Indenture.
15. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York applicable to
agreements made and to be performed in New York.
16. Counterparts. This Agreement may be executed in any number
of counterparts and each such counterpart shall be deemed to constitute but one
and the same instrument.
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C/M: 11764.0001 346143.8
IN WITNESS WHEREOF, the O&Y Partners, the Company and the
Trustee have duly executed this Agreement the day and year first written.
237/1290 UPPER TIER ASSOCIATES, L.P.
By: O&Y NY Building Corp.,
General Partner
By:
Name:
Title:
O&Y NY BUILDING CORP.
By:
Name:
Title:
O&Y EQUITY COMPANY, L.P., as debtor
and debtor in possession
By: O&Y Equity General Partner
Corp., General Partner as
debtor and debtor in
possession
By:
Name:
Title:
BANKERS TRUST COMPANY, as Trustee
By:
Name:
Title:
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C/M: 11764.0001 346143.8
ACKNOWLEDGEMENTS
(to be attached)
C/M: 11764.0001 346143.8
EXHIBIT A
(Property Description)
C/M: 11764.0001 346143.8
