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DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT
(237 Excess Amount)
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Dated: October 10, 1996
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C/M: 11764.0001 374509.4
DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT
(237 Excess Amount)
THIS DEBT ASSUMPTION, RELEASE AND SECURITY AGREEMENT (this
"Agreement") made as of the 10th day of October, 1996, between 000 XXXX XXXXXX
ASSOCIATES, L.L.C., a New York limited liability company and 1290 ASSOCIATES,
L.L.C., a New York limited liability company (collectively referred to
hereinafter as the "Companies"), 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 Members"), 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, the Companies 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 Companies are 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 Companies),
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 Members are members of the Companies;
WHEREAS, pursuant to the order dated September 20, 1996,
entered by the Bankruptcy Court confirming the plan of reorganization of the
Companies under Chapter 11 of the United States Bankruptcy Code (the "Plan of
Reorganization"), the Companies, the O&Y Members and the Trustee are entering
into this Agreement to evidence (i) the assumption by the O&Y Members of the
Companies' obligation to pay $60,000,000 (the "237 Excess Amount") of 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, (ii) the release by the Trustee of the
Companies from the obligation to repay the 237 Excess Amount assumed by the O&Y
Members hereunder, and (iii) the granting by the O&Y Members to the Trustee of a
security interest in their interests as members in the Companies 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 Companies, the O&Y Members and
the Trustee covenant and agree as follows:
C/M: 11764.0001 374509.4
1. Assumption of Debt. The O&Y Members, pursuant to the Plan
of Reorganization, hereby assume the obligations of the Companies to repay the
237 Excess Amount and all interest and other charges which may hereafter accrue
thereon (the "Assumed Debt"), on a pro rata basis with the Companies' obligation
to pay the remaining amount evidenced by the Notes and secured by the Indenture.
2. Security Interest. As security for the O&Y Members'
obligation to repay the Assumed Debt in accordance with this Agreement, and the
observance and performance by the O&Y Members of all of the terms, covenants and
provisions of this Agreement on the part of the O&Y Members to be observed and
performed, the O&Y Members 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"):
(a) all of the O&Y Members' share, right, title or interest in and to
the Companies and in and to the assets of the Companies and the business
thereof, including without limitation, all tangible and intangible property and
assets of any nature whatsoever owned by the Companies or in which the Companies
have an interest, and the Companyies' goodwill, capital, profits and assets;
(b) all contract rights, accounts, instruments, documents, chattel
papers, general intangibles, claims, powers, privileges, benefits and remedies
of the O&Y Members arising under or from any provision of the operating
agreement of the Companies or arising out of the O&Y Members' membership in the
Companies; and
(c) all cash or non-cash proceeds of any of the foregoing.
3. Release from Debt. The Trustee (for itself and on behalf of
the Noteholders) hereby releases the Companies and each Member thereof (other
than the O&Y Members) from any obligation to repay any portion of the Assumed
Debt (including, but not limited to, any obligation of a Member based on a
deficit capital account of such Member). The foregoing release is without effect
to the Companies' obligation to pay the remaining outstanding principal balance
and interest, fees and charges due and owing under the Notes and secured by the
Indenture 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 Members to repay the Assumed Debt will no longer be
secured by the lien of the Indenture encumbering the Properties.
4. Covenants. The O&Y Members jointly and severally covenant
and agree with the Trustee as follows:
(a) The O&Y Members shall observe and perform each and every term,
covenant and provision to be observed and performed by the O&Y Members pursuant
to the terms of the operating agreements of the Companies 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 Members or the Companies.
(b) The O&Y Members 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 Companies, or (iii) any action or proceeding to which the O&Y Members or the
Companies are a party, or affecting the O&Y Members or the Companies, an adverse
determination of which would
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C/M: 11764.0001 374509.4
affect the O&Y Members, the Companies or the Collateral in a materially
adverse manner.
5. Defaults. Any default by the O&Y Members or the Companies
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 Members and the Companies (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 Companies, 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 Members.
7. No Assumptions of Duties; Limitation on Liabilities.
Nothing herein contained shall be construed to constitute the Trustee as either
the O&Y Members' or the Companies' agent or as a member in the Companies 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 Members' or the Companies' obligations under any contract, agreement,
document or instrument relating to or binding upon the O&Y Members or the
Companies or constituting a part of or relating to the Collateral and the
Trustee will not be responsible in any way for the O&Y Members' or the
Companies' 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
Trustee of the Excess Amount Release, any and all liabilities and obligations of
the O&Y Members 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 Members 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 Members 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 Members in any case shall, of
itself, entitle the O&Y Members to any other or further notice
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C/M: 11764.0001 374509.4
or demand in similar or other circumstances. If any notice is required by law to
be given to the O&Y Members by the Trustee, five (5) days notice given by mail
and addressed to the O&Y Members, at the addresses herein set forth shall be
deemed for all purposes to be reasonable notice.
10. Companies Consent. The Companies consent in all respects
to the transactions effected by this Agreement, and agree 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 Members or to the Companies:
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.
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 Members 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.
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C/M: 11764.0001 374509.4
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 374509.4
IN WITNESS WHEREOF, the O&Y Members, the Companies and the
Trustee have duly executed this Agreement the day and year first written.
000 XXXX XXXXXX ASSOCIATES, L.L.C.
By: O&Y NY Building Corp.,
Managing Member
By:
Name:
Title:
1290 ASSOCIATES, L.L.C.
By: O&Y NY Building Corp.,
Managing Member
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 374509.4
ACKNOWLEDGEMENTS
(to be attached)
C/M: 11764.0001 374509.4
EXHIBIT A
(Property Description)
C/M: 11764.0001 374509.4
