Exhibit 4.2
AMENDED AND RESTATED
COLLATERAL AND SECURITY AGREEMENT
among
MORTGAGE AND REALTY TRUST,
THE SUBSIDIARIES LISTED ON
THE SIGNATURE PAGES HERETO,
THE LENDERS LISTED ON THE
SIGNATURE PAGES HERETO
and
WILMINGTON TRUST COMPANY,
and
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
as Collateral Agent
Dated as of September 29, 1995
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION . . . . . . . . . . 2
1.01 Definitions Used in the Indenture. . . . . . . . . . . . . . 2
1.02 Definitions Used in this Collateral Agreement. . . . . . . . 2
1.03 Other Terms. . . . . . . . . . . . . . . . . . . . . . . . . 3
1.04 Rules of Construction. . . . . . . . . . . . . . . . . . . . 3
1.05 Documents in Recordable Form . . . . . . . . . . . . . . . . 3
ARTICLE II
GRANT OF SECURITY INTEREST. . . . . . . . . . . . . . . . 3
2.01 Grant of Security Interest . . . . . . . . . . . . . . . . . 3
2.02 Limitation on Security Interests . . . . . . . . . . . . . . 6
ARTICLE III
COLLATERAL. . . . . . . . . . . . . . . . . . . . . . . . 6
3.01 Representations. . . . . . . . . . . . . . . . . . . . . . . 6
3.03 Appointment of the Collateral Agent as Attorney-in-Fact. . . 8
3.04 Continuous Perfection. . . . . . . . . . . . . . . . . . . . 9
3.05 Collateral Agent's Payment of Claims . . . . . . . . . . . . 10
3.06 Collateral Agent's Ability to Reject Collateral. . . . . . . 10
3.07 Delivery of Title Insurance, Surveys . . . . . . . . . . . . 11
3.08 Limitation on the Lenders' Duty in Respect of Collateral . . 11
3.09 Further Documentation; Pledge of Instruments . . . . . . . . 12
3.10 Maintenance of Records . . . . . . . . . . . . . . . . . . . 12
3.11 Indemnification. . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Compliance with Laws, Etc. . . . . . . . . . . . . . . . . . 13
3.13 Payment of Obligations . . . . . . . . . . . . . . . . . . . 13
3.14 Limitation on Liens on Collateral. . . . . . . . . . . . . . 13
3.15 Further Identification of Collateral . . . . . . . . . . . . 13
3.16 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 13
ARTICLE IV
DEPOSIT ACCOUNTS AND ASSET SALE ACCOUNT . . . . . . . . . 14
4.01 Grant of Security Interest in Deposit Accounts . . . . . . . 14
4.02 Use of Cash. . . . . . . . . . . . . . . . . . . . . . . . . 14
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4.03 Asset Sale Account . . . . . . . . . . . . . . . . . . . . . 14
4.04 Delivery of Cash Deposited in the Asset Sale Account . . . . 14
ARTICLE V
RECEIVABLES . . . . . . . . . . . . . . . . . . . . . . . 15
5.01 Delivery of Underlying Loan Documents and Evidence of
Receivables . . . . . . . . . . . . . . . . . . . . . . . . 15
5.02 Assignment of Collateral Security and Execution of
Additional Documents. . . . . . . . . . . . . . . . . . . . 15
5.03 Receivables Subject to Prior Encumbrances. . . . . . . . . . 15
ARTICLE VI
RELEASE . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.01 Release by the Collateral Agent Upon Sale or Disposition . . 16
ARTICLE VII
REMEDIES. . . . . . . . . . . . . . . . . . . . . . . . . 16
7.01 Remedies Cumulative. . . . . . . . . . . . . . . . . . . . . 16
7.02 No Waiver or Exhaustion. . . . . . . . . . . . . . . . . . . 16
7.03 Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . 17
7.04 Notice of Sale . . . . . . . . . . . . . . . . . . . . . . . 19
7.05 Waiver of Certain Rights with Respect to Sales by
Collateral Agent of Collateral. . . . . . . . . . . . . . . 19
7.06 Right of Set-off . . . . . . . . . . . . . . . . . . . . . . 20
ARTICLE VIII
THE COLLATERAL AGENT . . . . . . . . . . . . . 21
8.01 Authorization and Action . . . . . . . . . . . . . . . . . . 21
8.02 Collateral Agent's Reliance, Etc . . . . . . . . . . . . . . 21
8.03 If a Lender is also Collateral Agent and Affiliates. . . . . 22
8.04 Lender Credit Decision . . . . . . . . . . . . . . . . . . . 22
8.05 Collateral Agent's Fee . . . . . . . . . . . . . . . . . . . 22
8.06 Successor Collateral Agent . . . . . . . . . . . . . . . . . 22
8.07 Payments to Lenders. . . . . . . . . . . . . . . . . . . . . 23
8.08 Other Matters Relating to the Collateral Agent . . . . . . . 23
8.09 Powers of Individual Collateral Agent. . . . . . . . . . . . 24
8.10 Additional Collateral Co-Agents; Separate Collateral
Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
ARTICLE IX
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GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . 26
9.01 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.02 Severability . . . . . . . . . . . . . . . . . . . . . . . . 26
9.03 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . 26
9.04 Successors and Assigns . . . . . . . . . . . . . . . . . . . 26
9.05 Applicable Law and Jurisdiction. . . . . . . . . . . . . . . 27
9.06 Defeasance . . . . . . . . . . . . . . . . . . . . . . . . . 27
9.07 Attorneys' Fees and Other Costs. . . . . . . . . . . . . . . 27
9.08 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . 28
9.09 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.11 Limitation of Liability. . . . . . . . . . . . . . . . . . . 28
9.12 Execution of this Collateral Agreement . . . . . . . . . . . 28
9.13 Rights to Deal with Collateral . . . . . . . . . . . . . . . 29
Schedules
Schedule I Existing Liens
Schedule II Filing Offices
Schedule III Location of Equipment and Inventory
Schedule IV Deposit Accounts
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AMENDED AND RESTATED COLLATERAL AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED COLLATERAL AND SECURITY AGREEMENT (this
"COLLATERAL AGREEMENT"), dated as of September 29, 1995, among MORTGAGE AND
REALTY TRUST, a Maryland real estate investment trust ("MRT"), the subsidiaries
of MRT listed on the signature pages hereto (the "SUBSIDIARIES"), the lenders
listed on the signature pages hereto (the "HOLDERS"), and WILMINGTON TRUST
COMPANY ("Corporate Collateral Agent") and ▇▇▇▇▇▇▇ ▇. ▇▇▇▇ ("Individual
Collateral Agent") acting not in their individual capacities, except as
specifically set forth herein, but solely as collateral agent (collectively, the
"COLLATERAL AGENT") for the Trustee and the Holders under the Amended and
Restated Indenture, dated as of September 29, 1995, between MRT and Wilmington
Trust Company, as trustee for the Holders (as amended, supplemented or otherwise
modified from time to time, the "INDENTURE").
W I T N E S S E T H:
WHEREAS, MRT is a debtor and debtor in possession under chapter 11
of title 11 of the United States Code, having commenced a bankruptcy case on
August 18, 1995;
WHEREAS, on August 18, 1995, MRT submitted to the United States
Bankruptcy Court for the Central District of California (the "COURT") a Plan of
Reorganization, dated July 12, 1995 (the "PLAN"), and on September 22, 1995, the
Court confirmed the Plan;
WHEREAS, the Indenture provides for the grant by MRT and the
Subsidiaries to the Collateral Agent of certain rights, including liens and
security interests against the Collateral (as defined in the Indenture), and
provides that this Collateral Agreement shall set forth the terms and conditions
relating to certain of the Collateral;
WHEREAS, the Collateral Agent is willing to continue to act on behalf
and for the benefit of the Trustee and the Holders in order to effect, and upon
the terms and conditions of, the Indenture and this Collateral Agreement; and
WHEREAS, by their execution of this Collateral Agreement MRT, the
Collateral Agent and the Required Holders have consented to the amendments
contained herein;
NOW, THEREFORE, in consideration of the premises and in order to
induce the Holders to enter into the Indenture, MRT, the Subsidiaries, the
Holders and the Collateral Agent hereby agree as follows:
ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
1.01 DEFINITIONS USED IN THE INDENTURE. Terms capitalized in this
Collateral Agreement without specific definition herein shall have the
respective meanings set forth in the Indenture.
1.02 DEFINITIONS USED IN THIS COLLATERAL AGREEMENT. The following
terms shall have the following respective meanings:
"ACCELERATION" means an acceleration of the maturity of the Notes in
accordance with Article 6 of the Indenture.
"COLLATERAL" has the meaning assigned thereto in Section 2.01 hereof.
"DEPOSIT ACCOUNT" has the meaning given it in Section 4.01 hereof.
"DOCUMENTS" means, collectively, the Plan, the Indenture, this
Collateral Agreement, the Pledge Agreement, the Mortgages, the Assignments
of Leases, the Collateral Assignments of Leases and any other agreements,
instruments or documents which evidence, create, perfect and enforce the
liens on the Collateral, as the same may be amended, modified or otherwise
supplemented.
"EFFECTIVE DATE" means September 29, 1995.
"EVENT OF DEFAULT" means an Event of Default under Article 6 of the
Indenture, or an event of default under any of the other Documents.
"LENDERS" means the Holders under the terms of the Indenture.
"LIABILITIES" means all Obligations of MRT under the Indenture and the
Notes, and all other obligations of MRT to or for the benefit of the
Lenders, the Trustee and the Collateral Agent under or pursuant to this
Collateral Agreement and the other Documents.
"PROCEEDS" means "proceeds," as such term is defined in Section
9-306(1) of the UCC, and, in any event, shall include, without limitation,
(i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to MRT or any Subsidiary from time to time with respect to any of
the Collateral, (ii) any and all payments (in any form whatsoever) made or
due and payable to MRT or any Subsidiary from time to time in connection
with any requisition, confiscation, condemnation, seizure or forfeiture of
all or any
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part of the Collateral by any Governmental Authority (or any Person acting
under color of Governmental Authority), and (iii) any and all other
amounts from time to time paid or payable under or in connection with
any of the Collateral.
"RECEIVABLES" means all Indebtedness owed to MRT or any Subsidiary.
"UCC" means the Uniform Commercial Code as the same may, from time to
time, be in effect in the State of New York; PROVIDED, HOWEVER, in the
event that, by reason of mandatory provisions of law, any or all of the
attachment, perfection or priority of the Collateral Agent's and the
Lenders' security interest in any Collateral is governed by the Uniform
Commercial Code as in effect in a jurisdiction other than the State of New
York, the term "UCC" shall mean the Uniform Commercial Code as in effect in
such other jurisdiction for purposes of the provisions hereof relating to
such attachment, perfection or priority and for purposes of definitions
related to such provisions.
1.03 OTHER TERMS. All other terms contained in this Collateral
Agreement, where the context so indicates, shall have the meanings provided by
the UCC to the extent the same are used or defined therein.
1.04 RULES OF CONSTRUCTION. Except as otherwise specifically
provided in this Collateral Agreement, the singular of any term shall include
the plural and vice-versa; the use of such terms shall be equally applicable to
any gender; "or" shall not be exclusive; "including" shall not be limiting; and
any reference to any "Article" or "Section" or "Exhibit," where the context so
indicates, shall be construed as a reference to the relevant Article, Section or
Exhibit of this Collateral Agreement.
1.05 DOCUMENTS IN RECORDABLE FORM. All agreements, instruments and
documents required to be executed and delivered pursuant to this Collateral
Agreement shall be in recordable form where indicated by applicable law.
ARTICLE II
GRANT OF SECURITY INTEREST
2.01 GRANT OF SECURITY INTEREST. As collateral security for the full
and prompt payment when due (whether at stated maturity, by acceleration or
otherwise) of, and the performance of, all the Liabilities and to induce the
Lenders to enter into the Indenture, MRT and each Subsidiary hereby assigns,
conveys, mortgages, pledges, hypothecates and transfers to the Collateral Agent,
on behalf
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and for the ratable benefit of the Lenders, and hereby grants to the
Collateral Agent, on behalf and for the ratable benefit of the Lenders, a
security interest in, all of MRT's or such Subsidiary's right, title and
interest in, to and under the following (all of which being hereinafter
collectively called the "Collateral"):
(a) all accounts and all rights to the payment of money and all
rights in any merchandise, inventory, or goods, now existing or hereafter
arising, whether due or to become due, and whether or not earned by performance,
including, but not limited to, book debts, accounts receivable, leases,
bailments, conditional sale contracts, chattel paper, contracts, contract
rights, general intangibles, instruments and receivables, together with all
right, title, security, and guarantees with respect to each of the foregoing
including any right to stoppage in transit, and all security interests, liens,
and pledges, whether voluntary or involuntary;
(b) all retail and wholesale inventory and all goods, parts, raw
materials, goods in process, and supplies that are or might be used in
connection with the manufacture, packing, shipping, advertising, selling or
finishing of said goods, together with all additions, accessions, substitutions,
and proceeds thereto and therefor, and in every case whether now owned or
hereafter acquired in which MRT or such Subsidiary may have or hereafter acquire
an interest;
(c) all leases, bailments, conditional sale contracts, security
agreements, chattel paper, contracts, contract rights, general intangibles, and
other agreements for use or purchase of the properties, assets and rights
described herein or any part thereof and all renewals and extensions thereof, in
every case whether now owned or hereafter acquired, or in which MRT or such
Subsidiary may have or hereafter acquire any interest, and all amounts, rents,
issues, royalties, profits, and rights and other sums of money due and to become
due under such leases, bailments, conditional sale contracts, security
agreements, chattel paper, contracts, contract rights, general intangibles, and
other agreements for use or purchase of such properties, assets, or rights and
all renewals and extensions thereof in every case whether now or hereafter in
effect, whether now owned or hereafter acquired or in which MRT or such
Subsidiary may have or hereafter acquire any interest;
(d) all cash, bank deposits, deposit accounts, checks, certificates
of deposit, checking and savings accounts, bankers' acceptances, letters of
credit, United States obligations, state and municipal obligations, obligations
of foreign governments and subdivisions thereof, commercial paper, notes,
instruments (whether negotiable or non-negotiable), drafts, bonds, debentures
(excluding debentures convertible into shares of capital stock and other equity
securities except as may be specifically set forth hereinbelow) of and claims
against corporations, joint ventures, persons, partnerships, whether limited or
general, and other entities of every description, and other instruments and the
like, in every case whether now owned or hereafter acquired or in which MRT or
such Subsidiary may have or hereafter acquire any interest, except those bank
accounts relating to MRT's Termination Pay Plan;
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(e) any interest in any personal property from which any of the
properties, assets and rights described above arise, including, but not limited
to, repossessed and returned goods, goods stopped in transit by MRT or such
Subsidiary and goods covered by chattel paper, in every case whether now
existing or hereafter arising;
(f) all general intangibles, choses in action or causes of action,
including, particularly, rights in or arising under any judgment, statute, or
rule and all other properties, assets, and rights of every kind and nature;
including, but not limited to, rights to refunds, tax refunds, claims for tax
refunds, rights of indemnification, books and records (including, corporate and
other business records, customer lists, credit files, computer programs, print-
outs and other computer materials and records), inventions, designs, patents,
copyrights, trademarks, trade names, trade styles, trade secrets, registrations,
licenses, and customer lists and the like, wherever located, whether now owned
or hereafter acquired or in which MRT or such Subsidiary may have or hereafter
acquire any interest;
(g) all equitable rights and interests of whatever kind or nature,
whether now existing or hereafter arising;
(h) all rights and claims in or under any policy of insurance
required or which may be required under the documents evidencing the liens on
Collateral, including, but not limited to, insurance for fire, damage, loss, and
casualty, whether covering personal property, real property, tangible rights or
intangible rights, and all liability, life, key man, and business interruption
insurance, together with the proceeds, products, renewals, and replacements
thereof, including prepaid or unearned premiums, in every case whether now
existing or hereafter arising; PROVIDED, HOWEVER, that proceeds of insurance
shall be applied and retained in accordance with the terms of the Indenture and
the other Documents;
(i) all rights, claims and proceeds under or by reason of the
exercise of any public or quasi-public condemnation or eminent domain
proceedings, or transfers or dispositions in lieu thereof;
(j) all equipment, machinery, tools, furnishings, fixtures, vehicles,
motor vehicles, and goods used or bought primarily for use in MRT's or such
Subsidiary's business, all whether now owned or hereafter acquired, together
with all products and proceeds of the foregoing whether due to voluntary or
involuntary disposition;
(k) all instruments, documents, and documents of title, including,
but not limited to, bills of lading, warehouse receipts and the like, trust
receipts and the like, whether now owned or hereafter acquired;
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(l) (i) any and all Receivables, whether now owned or existing or
hereafter acquired or arising, and all proceeds and profits of such Receivables,
(ii) all books and records, pertaining to any of the Collateral, whether now
owned or existing or hereafter acquired or arising, including all computer
hardware and software (and manuals therefor) and all equipment and tangible
personal property in which such books and records are kept, and (iii) all
proceeds, replacements, substitutions and accessions of or to any Collateral;
(m) all partnerships, participations and joint ventures in which MRT
or such Subsidiary is a partner, participant or a joint venturer, including all
(i) rights of MRT or such Subsidiary as partner, participant or joint venturer,
(ii) profits and surplus of the partnership, participation or joint venture,
(iii) distributions of, and all rights to receive distributions of, money and
property from the partnership, participation or joint venture, (iv) payments or
property held by the partnership, participation or joint venture upon
dissolution and winding up, (v) accounts, contract rights, general intangibles,
chattel paper, instruments, documents, money and other rights or property
resulting from any distributions by the partnership, participation or joint
venture from the disposition of its assets, and (vi) all cash and non-cash
proceeds of any of the foregoing; and
(n) without in any way limiting the foregoing, the proceeds of any of
the foregoing, whether derived from voluntary or involuntary disposition,
products of the foregoing, and all renewals, replacements, substitutions,
additions, accession, rents, issues, royalties and profits of any of the
foregoing, whether now owned, existing or hereafter acquired or arising.
2.02 LIMITATION ON SECURITY INTERESTS. The grant, assignment and
transfer of a security interest, or other Lien, pursuant to this Collateral
Agreement, shall be subject to all provisions of any agreement evidencing the
First Lien Debt which limits or qualifies such security interest, which requires
the subordination (as to security or payment or both security and payment) of
such security interest, or which prohibits the granting of a security interest
by or in respect of any partnership, joint venture or property; PROVIDED,
HOWEVER, that with respect to any partnership, participation or joint venture
which MRT enters into after the Effective Date, MRT shall require with respect
thereto that the Collateral Agent's ability to file and perfect a security
interest in such interest shall not be restricted or impaired in any manner.
ARTICLE III
COLLATERAL
3.01 REPRESENTATIONS AND WARRANTIES. (a) MRT and each of the
Subsidiaries warrants and represents to the Collateral Agent and the Lenders
that (i) it
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has not granted to any Person other than the Collateral Agent any consensual
lien (I.E., a lien existing solely as the result of an affirmative agreement
by it expressly granting such lien) on the Real Estate that is not disclosed
in the title policies relating to such Real Estate in effect on or prior to
the Effective Date or not otherwise disclosed on Schedule I hereto, (ii) to
the best of its knowledge, the Real Estate is not subject to any
non-consensual lien that is not disclosed in the title policies relating to
such Real Estate or not otherwise disclosed on Schedule I hereto, (iii) the
Collateral delivered to the Collateral Agent on or prior to the date hereof
constitutes all of the Collateral owned by it as of the date hereof, (iv) it
has due right, power and authority to execute, acknowledge and deliver this
Collateral Agreement and carry out the transactions contemplated hereby, (v)
the execution, delivery and performance by MRT and the Subsidiaries of this
Collateral Agreement have been duly authorized by all necessary action, do
not contravene MRT's and the Subsidiaries' constituent documents, any
Requirement of Law or any order or decree of any court, or any contractual
obligation of MRT or any Subsidiary, and do not result in or require the
creation of any lien (other than pursuant to the Documents) upon or with
respect to any of its properties, (vi) no consent, authorization, approval or
other action by, and no notice to or filing with, any Governmental Authority
is required for the due execution, delivery and performance by MRT and the
Subsidiaries of this Collateral Agreement, (vii) this Collateral Agreement
has been duly executed and delivered by MRT and the Subsidiaries and is the
legal, valid and binding obligation of MRT and the Subsidiaries, enforceable
against MRT and the Subsidiaries in accordance with its terms, (viii) upon
the filing of the appropriate financing statements in the jurisdictions
listed on Schedule II hereto, this Collateral Agreement will be effective to
create a valid lien on the Collateral, and (ix) MRT's and the Subsidiaries'
principal place of business and the place where their records concerning the
Collateral are kept and the location of their inventory and equipment are set
forth on Schedule III hereto. Upon any acquisition after the date hereof of
any Collateral, MRT and each Subsidiary shall, at the time it delivers to the
Collateral Agent a security interest in same, be deemed to make the
representation and warranty set forth above, as of the date of such delivery
with respect to such acquisition and such representation and warranty shall
have the same force and effect as if made on such date.
(b) Except as set forth in this Collateral Agreement, MRT makes no
representations or warranties, express or implied, of any nature whatsoever
respecting (i) the title, merchantability, fitness for use, value or condition
of any property encumbered by the Mortgages or the Underlying Mortgages, or (ii)
the validity, enforceability or collectibility of any amount now or hereafter
payable, or purported to be payable, under any promissory note or other item of
collateral, including the existence of any defense against the payment thereof
or any right of offset or counterclaim with respect thereto. The Lenders and
the Collateral Agent understand that the properties encumbered by the Mortgages
and the Underlying Mortgages are being encumbered on an as-is, where is basis,
and with all faults and liabilities.
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3.02 EXECUTION OF CLOSING DOCUMENTS. On or before the Effective
Date, and as and when required by the Indenture or this Collateral Agreement,
MRT and the Subsidiaries shall execute, deliver and record, all agreements,
instruments or documents required for the creation, perfection or enforceability
of the liens created or to be created in respect of any Collateral, including
Uniform Commercial Code financing statements describing any Collateral.
3.03 APPOINTMENT OF THE COLLATERAL AGENT AS ATTORNEY-IN-FACT. (a)
MRT and the Subsidiaries hereby irrevocably constitute and appoint the
Collateral Agent and any officer or agent thereof, with full power of
substitution, as its true and lawful attorney-in-fact with full irrevocable
power and authority in the place and stead of MRT or any Subsidiary and in the
name of MRT or any Subsidiary or in its own name, from time to time in the
Collateral Agent's discretion, for the purpose of carrying out the terms of this
Collateral Agreement, to take any and all appropriate action and to execute and
deliver any and all documents and instruments which the Collateral Agent may
deem necessary or desirable to accomplish the purposes of this Collateral
Agreement and, without limiting the generality of the foregoing, hereby gives
the Collateral Agent the power and right, on behalf of MRT or any Subsidiary,
without notice to or assent by MRT or any Subsidiary to do the following:
(i) to ask, demand, collect, receive and give acquittances and
receipts for any and all moneys due and to become due under any Collateral
and, in the name of MRT or any Subsidiary or in its own name or otherwise,
to take possession of and endorse and collect any checks, drafts, notes,
acceptances or other instruments for the payment of moneys due under any
Collateral and to file any claim or to take any other action or proceeding
in any court of law or equity or otherwise deemed appropriate by the
Collateral Agent for the purpose of collecting any and all such moneys due
under any Collateral whenever payable and to file any claim or to take any
other action or proceeding in any court of law or equity or otherwise
deemed appropriate by the Collateral Agent for the purpose of collecting
any and all such moneys due under any Collateral whenever payable;
(ii) to pay or discharge taxes, liens, security interests or other
encumbrances levied or placed on or threatened against the Collateral, to
effect any repairs or any insurance called for by the terms of this
Collateral Agreement and to pay all or any part of the premiums therefor
and the costs thereof; and
(iii) (A) to direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due, and to become due
thereunder, directly to the Collateral Agent or as the Collateral Agent
shall direct; (B) to receive payment of and receipt for any and all moneys,
claims and other amounts due, and to become due at any time, in respect of
or arising
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out of any Collateral; (C) to sign and indorse any invoices, freight or
express bills, bills of lading, storage or warehouse receipts, drafts
against debtors, assignments, verifications and notices in connection
with accounts and other documents constituting or relating to the
Collateral; (D) to commence and prosecute any suits, actions or
proceedings at law or in equity in any court of competent jurisdiction to
collect the Collateral or any part thereof and to enforce any other right
in respect of any Collateral; (E) to defend any suit, action or proceeding
brought against MRT or any Subsidiary with respect to any Collateral; (F)
to settle, compromise or adjust any suit, action or proceeding described
above and, in connection therewith, to give such discharges or releases as
the Collateral Agent may deem appropriate; (G) to license or, to the extent
permitted by an applicable license, sublicense, whether general, special or
otherwise, and whether on an exclusive or non-exclusive basis, any patent
or trademark, for such term or terms, on such conditions, and in such
manner, as the Collateral Agent shall in its sole discretion determine; and
(H) generally to sell, transfer, pledge, make any agreement with respect to
or otherwise deal with any of the Collateral as fully and completely as
though the Collateral Agent were the absolute owner thereof for all
purposes, and to do, at the Collateral Agent's option and MRT's expense, at
any time, or from time to time, all acts and things which the Collateral
Agent reasonably deems necessary to protect, preserve or realize upon the
Collateral and the Collateral Agent's and the Lenders' lien therein, in
order to effect the intent of this Collateral Agreement, all as fully and
effectively as MRT might do.
(b) MRT and the Subsidiaries hereby ratify, to the extent permitted
by law, all that any said attorney shall lawfully do or cause to be done by
virtue hereof. The power of attorney granted pursuant to this Section 3.03,
being coupled with an interest, shall be irrevocable until the Liabilities are
indefeasibly paid in full.
(c) The powers conferred on the Collateral Agent hereunder are solely
to protect the Collateral Agent's and the Lenders' interests in the Collateral
and shall not impose any duty upon it to exercise any such powers. The
Collateral Agent shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers and neither it nor any of its
officers, directors, employees or agents shall be responsible to MRT or any
Subsidiary for any act or failure to act, except for its own gross negligence or
willful misconduct.
3.04 CONTINUOUS PERFECTION. Neither MRT nor any Subsidiary will
change its name, identity or corporate structure in any manner which might make
any financing or continuation statement filed in connection herewith seriously
misleading within the meaning of Section 9-402(7) of the UCC (or any other then
applicable provision of the UCC) unless MRT shall have given the Collateral
Agent at least 30 days' prior written notice thereof and shall have taken all
action (or made
9
arrangements to take such action substantially simultaneously with such
change if it is impossible to take such action in advance) necessary
or reasonably requested by the Collateral Agent to amend such financing
statement or continuation statement so that it is not seriously misleading.
Neither MRT nor any Subsidiary will change its principal place of business or
remove its records or change the location of its inventory and equipment, unless
it gives the Collateral Agent at least 30 days' prior written notice thereof and
has taken such action as is necessary to cause the security interest of the
Collateral Agent in the Collateral to continue to be perfected.
3.05 COLLATERAL AGENT'S PAYMENT OF CLAIMS. Without waiving or
effecting the cure of any Event of Default and whether or not an Event of
Default has occurred and is continuing, the Collateral Agent, as and to the
extent instructed by the Trustee or the Required Holders and without being
obligated to do so and without waiving or releasing any Liabilities may (a) pay,
acquire or accept an assignment of any lien, claim or right under any agreement,
or any taxes, asserted by any entity against any Collateral, (b) appear in and
defend any action or proceeding purporting to affect any Collateral or any of
the Collateral Agent's rights or powers under the liens on the Collateral or (c)
cure any defense of MRT or the Subsidiaries under any agreement, if the
Collateral Agent believes such default may materially and adversely affect the
lien created under or pursuant to the Indenture or this Collateral Agreement or
any Collateral; PROVIDED, HOWEVER, that the Collateral Agent shall, unless the
delay required for such notice would in the Collateral Agent's reasonable
judgment result in material harm to the subject Collateral, give MRT and the
Subsidiaries prior written notice of its intent to assert any right under this
Section, and allow MRT and the Subsidiaries thirty (30) days following such
notice to pay such lien, claim, right or tax, to cure such default, to certify
in writing that the failure to make such payment or cure such default does not
constitute a breach of any covenant in the Indenture, or to obtain to the
Collateral Agent's satisfaction the release of such lien, claim, right or tax.
For purposes hereof, a default in the payment of a lien, claim or tax shall be
deemed cured so long as the same shall be bonded (with a bonding company
reasonably satisfactory to the Collateral Agent) in an amount sufficient to
cover the amount of the lien, claim or tax plus any interest or penalties that
may accrue. All amounts expended by the Collateral Agent pursuant to this
Section 3.05 shall be payable, on demand, by MRT to the Collateral Agent. To
the extent that MRT fails or refuses to pay such amounts, the Lenders shall
advance the same for MRT's account to the Collateral Agent to pay same or to
reimburse the Collateral Agent for payment of same, according to each Lender's
ratable interest in the Liabilities. Any amounts so paid by a Lender shall be
added to, and form part of, the Liabilities owing to such Lender and shall be
secured by the Collateral.
3.06 COLLATERAL AGENT'S ABILITY TO REJECT COLLATERAL.
Notwithstanding anything contained herein to the contrary, the Collateral Agent
may elect not to accept a lien upon, or any other interest in, any Collateral
otherwise required under the Indenture to be delivered to it; PROVIDED, HOWEVER,
that such rejection shall not
10
increase MRT's or the Subsidiaries' obligations with respect to any other
Collateral and that MRT and the Subsidiaries shall have no obligations
whatsoever with respect to any Collateral rejected by the Collateral Agent.
3.07 DELIVERY OF TITLE INSURANCE, SURVEYS. (a) With respect to
Underlying Mortgages or Real Estate owned or leased by MRT or any Subsidiary on
or before the Effective Date, MRT and the Subsidiaries represent and warrant
that they have delivered to the Collateral Agent all available policies of title
insurance and surveys received by MRT or any Subsidiary in connection with such
Underlying Mortgages and Real Estate. MRT and the Subsidiaries further
represent and warrant that they have and agree that they shall continue to use
their best efforts to cause the title insurance carriers to provide to the
Collateral Agent endorsements insuring the assignments of the Underlying Loan
Documents for the ratable benefit of the Lenders.
(b) If, after the Effective Date, MRT or any Subsidiary acquires any
Real Estate or an Underlying Mortgage, through foreclosure or otherwise, or
becomes a mortgagee or trust deed holder under any new mortgage or trust deed,
then MRT or such Subsidiary shall deliver to the Collateral Agent upon such
event a title insurance policy in an amount equal to the acquisition price of
such Real Estate or the amount of such Underlying Mortgage, or mortgage or deed
of trust insuring (as the case may be) (i) MRT's or such Subsidiary's fee or
leasehold title to such Real Estate, containing such endorsements as the
Collateral Agent deems reasonably necessary or desirable and including a current
ALTA survey thereof with a surveyor's certificate in form and substance
satisfactory to the Collateral Agent or (ii) the enforceability and validity of
such Underlying Mortgage according to the terms and conditions of an ALTA
Lender's policy or if an ALTA Lender's policy is not available in the
jurisdiction in which the Real Estate or property encumbered by the Underlying
Mortgage is situated, then the policy most commonly required by commercial
lenders making commercial loans in such jurisdiction, in either case, together
with either (A) a title insurance policy insuring the lien granted to the
Lenders under the related Mortgage, in form, substance and amount reasonably
satisfactory to the Collateral Agent, or (B) an endorsement insuring the
assignment thereof to the Lenders, in form and substance reasonably satisfactory
to the Collateral Agent.
(c) With respect to any Collateral which is comprised of an indirect
ownership interest in real property (I.E., a joint venture, participation or
partnership interest, or stock ownership of a real estate company), any title
insurance policy required to be delivered or obtained hereunder shall contain a
non-imputation endorsement, if available, at reasonable cost, in form reasonably
satisfactory to the Collateral Agent.
3.08 LIMITATION ON THE LENDERS' DUTY IN RESPECT OF COLLATERAL. No
Lender shall have any duty as to any Collateral in its possession or control or
in the possession or control of any agent or nominee of it or any income thereon
or as to the
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preservation of rights against prior parties or any other rights pertaining
thereto, except that each Lender shall use reasonable care with respect to
the Collateral in its possession or under its control.
3.09 FURTHER DOCUMENTATION; PLEDGE OF INSTRUMENTS. At any time and
from time to time, upon the written request of the Collateral Agent, and at the
sole expense of MRT and the Subsidiaries, MRT and the Subsidiaries will promptly
and duly execute and deliver any and all such further instruments and documents
and take such further action as the Collateral Agent may reasonably deem
desirable to obtain the full benefits of this Collateral Agreement and of the
rights and powers herein granted, including, without limitation, using their
best efforts to secure all consents and approvals necessary or appropriate for
the assignment to the Collateral Agent of any contract held by MRT or any
Subsidiary or in which MRT or any Subsidiary has any rights not heretofore
assigned, the filing of any financing or continuation statements under the UCC
with respect to the liens and security interests granted hereby, transferring
Collateral to the Collateral Agent's possession (if a security interest in such
Collateral can be perfected by possession) and placing the interest of the
Collateral Agent as lienholder on the certificate of title of any vehicle. MRT
and the Subsidiaries also hereby authorize the Collateral Agent to file any such
financing or continuation statement without the signature of MRT or any
Subsidiary to the extent permitted by applicable law. If any of the Collateral
shall be or become evidenced by any instrument, MRT and the Subsidiaries agree
to pledge such instrument to the Collateral Agent and shall duly endorse such
instrument in a manner satisfactory to the Collateral Agent and deliver the same
to the Collateral Agent.
3.10 MAINTENANCE OF RECORDS. MRT and the Subsidiaries will keep and
maintain at their own cost and expense satisfactory and complete records of the
Collateral, including, without limitation, a record of all payments received and
all credits granted with respect to the Collateral and all other dealings with
the Collateral. MRT and the Subsidiaries will ▇▇▇▇ their books and records
pertaining to the Collateral to evidence this Collateral Agreement and the lien
and security interests granted hereby. If requested by the Collateral Agent,
the security interest of the Collateral Agent shall be noted on the certificate
of title of each vehicle. For the Collateral Agent's and the Lenders' further
security, MRT and the Subsidiaries agree that the Collateral Agent and the
Lenders shall have a special property interest in all of MRT's and the
Subsidiaries' books and records pertaining to the Collateral and, upon the
occurrence and during the continuance of any Event of Default, MRT and the
Subsidiaries shall deliver and turn over any such books and records to the
Collateral Agent or to its representatives at any time on demand of the
Collateral Agent. Prior to the occurrence of an Event of Default and upon
reasonable notice from the Collateral Agent, MRT and the Subsidiaries shall
permit any representative of the Collateral Agent to inspect such books and
records and will provide photocopies thereof to the Collateral Agent.
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3.11 INDEMNIFICATION. In any suit, proceeding or action brought by
the Collateral Agent or any Lender relating to any account, chattel paper,
contract, general intangible or instrument constituting Collateral for any sum
owing thereunder, or to enforce any provision of any such account, chattel
paper, contract, general intangible or instrument, MRT and the Subsidiaries will
save, indemnify and keep each of the Collateral Agent and the Lenders harmless
from and against all expense, loss or damage suffered by reason of any defense,
set-off, counterclaim, recoupment or reduction of liability whatsoever of the
obligor thereunder, arising out of a breach by MRT and the Subsidiaries of any
obligation thereunder or arising out of any other agreement, indebtedness or
liability at any time owing to, or in favor of, such obligor or its successors
from MRT and the Subsidiaries, and all such obligations of MRT and the
Subsidiaries shall be and remain enforceable against and only against MRT and
the Subsidiaries and shall not be enforceable against the Collateral Agent or
the Lenders.
3.12 COMPLIANCE WITH LAWS, ETC. MRT and the Subsidiaries will
comply, in all material respects, with all acts, rules, regulations, orders,
decrees and directions of any Governmental Authority, applicable to the
Collateral or any part thereof; PROVIDED, HOWEVER, that MRT and the Subsidiaries
may contest any act, regulation, order, decree or direction in any reasonable
manner which shall not, in the sole opinion of the Collateral Agent, adversely
affect the Collateral Agent's rights hereunder or adversely affect the first
priority of its lien on and security interest in the Collateral.
3.13 PAYMENT OF OBLIGATIONS. MRT and the Subsidiaries will pay
promptly when due all taxes, assessments and governmental charges or levies
imposed upon the Collateral or in respect of its income or profits therefrom,
except that no such charge need be paid if (i) such non-payment does not involve
any danger of the sale, forfeiture or loss of any of the Collateral or any
interest therein, and (ii) such charge is adequately reserved against in
accordance with and to the extent required by GAAP.
3.14 LIMITATION ON LIENS ON COLLATERAL. MRT and the Subsidiaries
will not create, permit or suffer to exist, and will defend the Collateral
against and take such other action as is necessary to remove, any lien on the
Collateral except liens permitted under Section 4.13 of the Indenture, and will
defend the right, title and interest of the Collateral Agent and the Lenders in
and to any of MRT's or the Subsidiaries' rights under the chattel paper,
contracts, documents, general intangibles and instruments and to the equipment
and inventory constituting Collateral and in and to the Proceeds thereof against
the claims and demands of all Persons whomsoever.
3.15 FURTHER IDENTIFICATION OF COLLATERAL. MRT and the Subsidiaries
will, if so requested by the Collateral Agent, furnish to the Collateral Agent,
as often as the Collateral Agent reasonably requests, statements and schedules
further
13
identifying and describing the Collateral and such other reports in
connection with the Collateral as the Collateral Agent may reasonably
request, all in reasonable detail.
3.16 NOTICES. MRT and the Subsidiaries will advise the Collateral
Agent promptly, in reasonable detail, (i) of any material lien or claim made or
asserted against any of the Collateral, (ii) of any material change in the
composition of the Collateral, and (iii) of the occurrence of any other event
which would have a material adverse effect on the aggregate value of the
Collateral or in the security interests created hereunder.
ARTICLE IV
DEPOSIT ACCOUNTS AND ASSET SALE ACCOUNT
4.01 GRANT OF SECURITY INTEREST IN DEPOSIT ACCOUNTS. MRT hereby
grants, assigns and transfers to the Collateral Agent, as security for the
Liabilities, a lien and/or security interest in the deposit accounts identified
on Schedule IV hereto, as well as any other deposit accounts owned or controlled
directly on indirectly by MRT from time to time (the "DEPOSIT ACCOUNTS"), except
any Deposit Accounts relating to MRT's Termination Pay Plan, and any Receivable
arising from the investment by MRT of cash balances in such Deposit Accounts.
The security interest in the Deposit Accounts hereby also extends to (a) any and
all cash proceeds thereof including all Receivables generated from the
investment of cash balances in the Deposit Accounts or (b) any Collateral
acquired directly or indirectly with such cash proceeds.
4.02 USE OF CASH. So long as no Event of Default has occurred and is
continuing, MRT shall have the right to use cash in the Deposit Accounts,
provided that nothing herein shall be deemed to permit a use which is in breach
or contravention of any provision or covenant in the Indenture or this
Collateral Agreement.
4.03 ASSET SALE ACCOUNT. MRT and the Subsidiaries shall deposit all
Cash Asset Sale Proceeds in the Asset Sale Account upon receipt by MRT or any
Subsidiary or their agent, subject to their right to receive and use such
proceeds as more fully set forth in Sections 4.11 and 4.12 of the Indenture.
MRT and the Subsidiaries hereby grant, assign and transfer to the Collateral
Agent, as security for the Liabilities, a lien and security interest in the
Asset Sale Account.
4.04 DELIVERY OF CASH DEPOSITED IN THE ASSET SALE ACCOUNT. If MRT
satisfies the requirements set forth in Sections 4.11 and 4.12 of the Indenture,
the Collateral Agent is authorized to release Cash deposited in the Asset Sale
Account to MRT as set forth in the Indenture.
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ARTICLE V
RECEIVABLES
5.01 DELIVERY OF UNDERLYING LOAN DOCUMENTS AND EVIDENCE OF
RECEIVABLES. On or before the Effective Date, MRT and the Subsidiaries shall
deliver all Underlying Loan Documents, Underlying Promissory Notes and evidence
of Receivables in their possession to the Collateral Agent and MRT and the
Subsidiaries shall, as required by the Indenture or this Collateral Agreement,
(a) furnish to the Collateral Agent such Underlying Loan Documents and
agreements related thereto pledged to the Lenders as the Collateral Agent may
request, (b) within five (5) days after their possession of any Underlying
Promissory Note or any other Underlying Loan Documents not then subject to a
lien in favor of the Collateral Agent deliver such Underlying Promissory Note or
Underlying Loan Documents to the Collateral Agent, and (c) furnish to the
Collateral Agent all other Receivables as the Collateral Agent may request;
PROVIDED, HOWEVER, that the foregoing is not intended to include promissory
notes or other instruments evidencing indebtedness of any Person to MRT in
connection with residential end loans made by MRT to such Person for the purpose
of purchasing a condominium unit. All Underlying Promissory Notes delivered by
MRT or any Subsidiary to the Collateral Agent shall be endorsed to the order of
the Collateral Agent.
5.02 ASSIGNMENT OF COLLATERAL SECURITY AND EXECUTION OF ADDITIONAL
DOCUMENTS. If with respect to any Receivable which is Collateral, the
Collateral Agent deems it necessary to hold and record in the appropriate
recorder's office any additional evidence of the assignment of any deed of
trust, mortgage, contract of sale, lease, guaranty or other security instrument
that secures or guarantees the performance of such Receivable, then the
Collateral Agent shall give written notice thereof to MRT or the applicable
Subsidiary, and MRT or such Subsidiary shall promptly execute and deliver such
additional assignment or assignments to the Collateral Agent. In the event that
MRT or any Subsidiary intends to realize upon, sell or acquire title to any
underlying security for, or proceeds of, any Receivable which is Collateral, as
a result of enforcing its right to payment of such Receivable, the Collateral
Agent, in its sole discretion and as a condition to releasing such Receivable
for such purpose, may require that MRT or such Subsidiary (a) execute such
additional mortgages, deeds of trust, financing statements or other security
agreements and instruments as the Collateral Agent deems appropriate to obtain
and maintain a perfected and enforceable lien upon such underlying security or
proceeds having the highest available priority and rank EXCEPT, THAT, such
security interest may be subordinated to any purchase money financing in
connection with such sale or transfer, and (b) utilize escrow arrangements for
the receipt and holding of such Receivable where requested by the Collateral
Agent.
15
5.03 RECEIVABLES SUBJECT TO PRIOR ENCUMBRANCES. MRT and the
Subsidiaries shall, upon request of the Collateral Agent, execute and deliver to
the holder of any lien prior in right to the Collateral Agent's lien or other
interest in or to any Receivable which is Collateral such notices, advisements
and letters disclosing to such holder the Collateral Agent's right under the
Indenture or the other documents evidencing such lien as the Collateral Agent
may, in its sole discretion, request. MRT and the Subsidiaries constitute and
appoint the Collateral Agent as their agent and attorney-in-fact for such
purpose. MRT and the Subsidiaries shall instruct such holder to deliver
directly to the Collateral Agent, immediately upon the release by such holder of
its lien or other interest, the original of all Underlying Promissory Notes
subject to such lien or other interest in the possession of such holder in
respect of such lien or other interest. Notwithstanding such duty of MRT and
the Subsidiaries, in the event that MRT or any Subsidiary receives possession of
any Underlying Promissory Notes, MRT or such Subsidiary shall hold same in trust
for the Collateral Agent and shall immediately deliver such Underlying
Promissory Notes to the Collateral Agent endorsed to the order of the Collateral
Agent.
ARTICLE VI
RELEASE
6.01 RELEASE BY THE COLLATERAL AGENT UPON SALE OR DISPOSITION. So
long as no Event of Default has occurred and is continuing, the Collateral Agent
shall, as soon as practicable upon its receipt of a written request by MRT,
execute and deliver any agreement, instrument or document releasing any lien
created or continued by or pursuant to the Indenture or this Collateral
Agreement, in accordance with the release provisions of the Indenture.
ARTICLE VII
REMEDIES
7.01 REMEDIES CUMULATIVE. No remedy conferred in any Document is
intended to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy under any Document or
now or hereafter existing at law or in equity or by statute or otherwise and the
Collateral Agent may exercise any such remedies separately, successively or
concurrently at its sole and absolute discretion.
7.02 NO WAIVER OR EXHAUSTION. No waiver by the Collateral Agent of
any rights or remedies provided for or referred to in any Document shall be
considered a waiver of any other or subsequent right or remedy of the Collateral
16
Agent; no delay or omission in the exercise or enforcement by the Collateral
Agent of any rights or remedies shall ever be construed as a waiver of any other
right or remedy of the Collateral Agent; and no exercise or enforcement of any
such right or remedy shall ever be held to exhaust any right or remedy of the
Collateral Agent.
7.03 REMEDIES. If an Event of Default has occurred and is
continuing, the Collateral Agent, upon authorization by the Required Holders,
may exercise any of the following remedies:
(a) RIGHTS OF A SECURED PARTY. In addition to all of the Collateral
Agent's other rights and remedies, the Collateral Agent shall have all of the
rights and remedies of a secured party under the Uniform Commercial Code of the
state in which such rights or remedies are asserted, all of which rights and
remedies shall be cumulative and nonexclusive. This Collateral Agreement
constitutes a "security agreement," within the meaning of the Uniform Commercial
Code, and the Collateral includes personal property and all other rights and
interests, tangible and intangible in nature. MRT and the Subsidiaries by
executing and delivering this Collateral Agreement have granted to the
Collateral Agent as security for the Liabilities, a security interest in the
Collateral. If an Event of Default occurs and is continuing, the Collateral
Agent, in addition to any other rights and remedies which it may have, shall
have and may exercise immediately and without demand, any and all rights and
remedies granted to a secured party upon default under the Uniform Commercial
Code, including, the right to take possession of the Collateral or any part
thereof, and to take such other measures as the Collateral Agent may deem
necessary for the care, protection and preservation of the Collateral.
(b) ACCESS TO COLLATERAL. The Collateral Agent shall have the right,
without any obligation to pay rent or any other consideration to MRT or any
Subsidiary, without prior notice to MRT or such Subsidiary and without being
deemed to be a mortgagee in possession, to (i) enter upon the Real Estate now or
hereafter owned or leased by MRT or any Subsidiary or any other place or places
in which any Collateral is located and kept, through self help and without
judicial process, without first obtaining a final judgment or giving MRT or such
Subsidiary an opportunity for any hearing; (ii) prepare, assemble or process any
Collateral for sale, lease or other disposition, and review, process and
assemble any records or evidence of the status or condition of any Collateral,
and for such purpose have access, without being liable for any charge or fee, to
all data processing and computer programs, disks, peripheral storage devices and
other computer hardware and software (and manuals therefor) in the possession or
under the control of MRT or any Subsidiary; (iii) remove, for sale or other
disposition, any Collateral to the premises of the Collateral Agent or elsewhere
for such time as the Collateral Agent may desire; or (iv) require MRT or any
Subsidiary to assemble any Collateral, or records or evidence of same, and make
the same available to the Collateral Agent at a place to be designated by the
Collateral Agent, in its sole discretion.
17
(c) OPERATION OF COLLATERAL. Until the Collateral Agent is able to
effect the sale, lease or other disposition of any Collateral, the Collateral
Agent shall have the right to use, operate, develop or manage the same, or any
part thereof, to the extent that it deems appropriate for the purpose of
preserving its value or for any other purpose deemed appropriate by the
Collateral Agent.
(d) POSSESSION OF THE COLLATERAL. The Collateral Agent may, if it so
elects, take possession of any Collateral personally, by agent, custodian or by
a receiver appointed by a court, without regard to the value of the security,
and may procure any orders or writs appropriate to enforce the Collateral
Agent's rights under this Collateral Agreement without prior notice or hearing,
and MRT and the Subsidiaries consent to the appointment of a receiver hereunder.
(e) COLLECTION OF RECEIVABLES. With respect to any Receivable which
is Collateral and without notice to MRT or the applicable Subsidiary, the
Collateral Agent, in its sole discretion and in its own name or in MRT's or such
Subsidiary's name, may (i) notify account debtors and demand and collect payment
and use MRT's or such Subsidiary's stationery for such purpose; (ii) enforce
payment by legal proceedings or otherwise; (iii) exercise all of MRT's or such
Subsidiary's rights and remedies thereunder; (iv) settle, adjust, compromise,
extend or renew any account debtor's obligations thereunder; (v) settle, adjust
or compromise any legal proceedings brought or pending in connection therewith;
(vi) if permitted by applicable law, sell or assign any such Receivable upon
such terms, for such amounts and at such time or times as the Collateral Agent
deems advisable; or (vii) grant discharges and make releases.
(f) SALE OR OTHER DISPOSITION OF COLLATERAL. The Collateral Agent
shall have the right to sell, lease or otherwise dispose of any Collateral in
its then condition, or after any further assembly, manufacturing, development
or processing thereof, at public or private sale or sales, with such notice
as may be required by law, in lots or in bulk, by parcel or EN MASSE, for
cash or on credit, all as the Collateral Agent, in its sole discretion, may
deem advisable. Such sales may be adjourned and continued from time to time
with or without notice. The Collateral Agent shall have the right to conduct
such sales on MRT's or any Subsidiary's premises or elsewhere and shall have
the right to use such premises without charge for such sales for such time or
times as the Collateral Agent may deem necessary in its sole discretion. In
advertising for sale, selling or otherwise realizing upon any Collateral, the
Collateral Agent is hereby granted a license and a right to use, without
charge, MRT's or any Subsidiary's labels, patents, copyrights, rights of use
of any name, trade secrets, trade names, trademarks, advertising matter or
any property of a similar nature, as they pertain to any Collateral, and
MRT's or such Subsidiary's rights under all licenses and all franchise
agreements shall inure to the Collateral Agent's benefit for this purpose.
The Collateral Agent or any Lender may purchase all or any Collateral at
public or, if permitted by law, private sale and, in lieu of actual payment
of such
18
purchase price, may set off the amount of such price against the Liabilities.
Except as otherwise provided by law, the proceeds realized from the sale or
other disposition of any Collateral shall be applied in the manner set forth
in Section 6.10 of the Indenture. If any deficiency shall arise, MRT shall
remain liable to the Lenders therefor.
(g) ENFORCEMENT OF SECURITY INTEREST IN ASSET SALE ACCOUNT. The
Collateral Agent may hold all funds in the Asset Sale Account and may refuse to
release all or any such funds to or at the request of MRT. The Collateral Agent
may enforce its security interest in the Asset Sale Account after an Event of
Default has occurred without notice to MRT or any Subsidiary, by application of
funds in the Asset Sale Account to the Liabilities. MRT and the Subsidiaries
agree that such application shall constitute a commercially reasonable
enforcement of the Collateral Agent's security interest in the Asset Sale
Account.
7.04 NOTICE OF SALE. Any notice required to be given by the
Collateral Agent of a sale, lease or other disposition of any personal property
Collateral shall constitute commercially reasonable and fair notice thereof to
MRT provided such notice is deposited in the United States mail, postage prepaid
and addressed to MRT, at the address then provided for notice to MRT in the
Indenture, ten (10) days prior to such proposed action, or such longer period,
if any, as may be specified by applicable law.
7.05 WAIVER OF CERTAIN RIGHTS WITH RESPECT TO SALES BY COLLATERAL
AGENT OF COLLATERAL. In consideration for the Lenders' agreement to enter into
the Indenture, but only to the extent permitted by applicable law:
(a) MRT and each Subsidiary hereby waives any marshalling, equity or
other right to inhibit, delay or restrict any sale or other disposition of
Collateral by the Collateral Agent pursuant to the Documents, or to direct the
order of such sale or sales or other disposition;
(b) any power of sale granted to the Collateral Agent in the
Documents may be exercised separately with respect to each and every item or
parcel of Collateral or with respect to groups and assemblages of Collateral, in
the Collateral Agent's sole discretion, and may be exercised on separate days or
at separate times or in separate places; the exercise of such power of sale
shall not be an action for purposes of any law or statute pertaining to actions
to enforce secured transactions;
(c) MRT and each Subsidiary waives any statutory right of redemption
following any sale or other disposition of Collateral by the Collateral Agent
and any right to have Collateral which is sold or otherwise disposed of pursuant
to the Documents valued after such sale or disposition, so that the total
deficiency then remaining may be bid in any order and in any part by the
Collateral Agent at any
19
other sale until all of the Liabilities are satisfied in full or the final
deficiency then remaining shall be reducible to judgment against MRT or such
Subsidiary by any court of competent jurisdiction; PROVIDED, HOWEVER, that
notwithstanding anything to the contrary contained in any Documents, the
value of the Collateral sold or otherwise disposed of by the Collateral Agent
pursuant to such document or documents shall, to the extent required by the
law of the jurisdiction in which such Collateral is located, be taken into
account before entering a deficiency judgment against MRT or such Subsidiary;
(d) any defense available to MRT or any Subsidiary with respect to or
as a result of a sale or other disposition of any Collateral pursuant to this
Article within one state shall not be available to MRT or such Subsidiary with
respect to any Collateral located in any other state; and
(e) the Collateral Agent shall be entitled to sell or dispose of any
Collateral or part thereof pursuant to any Documents in any order and in any
state or states, whether privately or by court proceeding for foreclosure,
seizure, appointment of receiver or otherwise, without regard to any substantive
or procedural defense, pleading bar, sanction or other remedy which would
otherwise be available to MRT or any Subsidiary affecting the Collateral Agent's
sole discretion to sell or dispose of the Collateral or any part thereof in one
transaction, rather than in multiple transactions, EN MASSE rather than by
parcel, in satisfaction of all the indebtedness then secured by such Collateral
rather than of any part of the indebtedness designated by the Collateral Agent
in its sole discretion and for that purpose MRT and each Subsidiary hereby
disclaims any right and waives any defense under (i) California Code of Civil
Procedure, Section 580d, concerning the bar against rendition of a deficiency
judgment after foreclosure under a power of sale, and Section 726 thereof,
concerning the form of foreclosure proceedings with respect to real property
security located in California, and California Civil Code, Section 1479,
concerning the application of general performance under several obligations to
one creditor, Section 2924g(b) thereof, concerning the conduct of trustee's
sales and Section 3433 thereof, concerning the relative rights of different
creditors interested in the same property and (ii) any laws or equitable
principles in any other states in the United States of America, where such laws
or equitable principles are similar in effect to the laws referred to in Section
7.05(e)(i) above.
7.06 RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default, each Lender is hereby authorized at any
time and from time to time, to the fullest extent permitted by law, to set off
and apply any and all deposits (general or special, time or demand, provisional
or final) at any time held and other indebtedness at any time owing by such
Lender to or for the credit or the account of MRT against any and all of the
Liabilities now or hereafter existing, irrespective of whether or not such
Lender shall have made any demand under this Collateral Agreement or any other
Document and although such obligations may be
20
unmatured. Each Lender agrees promptly to notify MRT after any such set-off
and application made by such Lender; PROVIDED, HOWEVER, that the failure to
give such notice shall not affect the validity of such set-off and
application. The rights of each Lender under this Section 7.06 are in
addition to the other rights and remedies (including, without limitation,
other rights of set-off) which such Lender may have.
ARTICLE VIII
THE COLLATERAL AGENT
8.01 AUTHORIZATION AND ACTION. Each Lender hereby appoints and
authorizes the Collateral Agent to take such action as agent on its behalf and
to exercise such powers under this Collateral Agreement and the Documents as are
delegated to the Collateral Agent by the terms hereof and thereof, together with
such powers as are reasonably incidental thereto. As to any matters not
expressly provided for by this Collateral Agreement and the other Documents
(including, without limitation, enforcement or collection of the Liabilities),
the Collateral Agreement shall not take any action unless directed by the
Required Holders, in which case such action shall be binding upon Lenders;
PROVIDED, HOWEVER, that the Collateral Agent shall not be required to take any
action which requires the Collateral Agent to expend its own funds or which the
Collateral Agent in good faith believes exposes it to personal liability or
which is contrary to this Collateral Agreement, the other Documents or
applicable law, and further provided that the Collateral Agent shall not be
liable with respect to any action properly taken or properly omitted by it in
accordance with the direction of the Required Holders.
8.02 COLLATERAL AGENT'S RELIANCE, ETC. None of the Collateral Agent,
its Affiliates or any of their respective directors, officers, agents, employees
or attorneys shall be liable for any action taken or omitted to be taken by it
or them under or in connection with this Collateral Agreement or the other
Documents, except for its or their own gross negligence or willful misconduct.
Without limitation of the generality of the foregoing, the Collateral Agent (a)
may treat for all purposes under the Indenture and this Collateral Agreement as
the owner, Lender and Holder with respect to any Note the Person whose name is
recorded as the owner of such Note in the register provided for in the
Indenture; (b) may retain and consult with legal counsel, independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender and shall not be responsible to any Lender for any
statements, warranties or representations made in, or in connection with, this
Collateral Agreement or any of the other Documents; (d) shall not have any duty
to ascertain or to inquire as to the performance or observance of any of the
terms, covenants or conditions of this Collateral Agreement or any of the other
Documents on the part of MRT or to inspect the property (including the books and
records) of
21
MRT; (e) shall not be responsible to any Lender for the due execution,
legality, validity, enforceability, genuineness, sufficiency or value of the
initial Collateral or of this Collateral Agreement or any of the other
Documents or any other instrument or document furnished pursuant hereto or
thereto or for the adequacy, perfection or priority of the security interests
in connection with the initial Collateral; and (f) shall incur no liability
under or in respect of this Collateral Agreement or any of the other
Documents by acting upon any notice, consent, certificate or other instrument
or writing (which may be by telegram, cable or telex) believed by it to be
genuine and signed or sent by the proper party or parties.
8.03 IF A LENDER IS ALSO COLLATERAL AGENT AND AFFILIATES. With
respect to the Liabilities owing to any Lender who, at any time is or becomes
the Collateral Agent hereunder, such Lender shall have the same rights and
powers under this Collateral Agreement as any other Lender and may exercise the
same as though it were not the Collateral Agent; and the term "Lender" or
"Lenders" shall, unless otherwise expressly indicated, include any such Lender
in its individual capacity. Any such Lender and its Affiliates may accept
deposits from, lend money to, act as trustee under indentures of, and generally
engage in any kind of business with, MRT and any Person who may do business with
or own securities of MRT, all as if such Lender were not the Collateral Agent
and without any duty to account therefore to the Lenders. Notwithstanding the
foregoing, no Lender may serve as Collateral Agent unless MRT approves such
Lender.
8.04 LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Collateral Agent or any other Lender
reviewing the Indenture and such other documents and information as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Collateral Agreement and the Indenture. Each Lender also acknowledges that it
will, independently and without reliance upon the Collateral Agent or any other
Lender and based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or not taking
action under this Collateral Agreement and the other Documents.
8.05 COLLATERAL AGENT'S FEE. MRT shall pay to Collateral Agent a
quarterly fee equal to $3,750, plus reimbursement of all expenses incurred by
Collateral Agent in performing its duties under this Collateral Agreement. At
the end of each Fiscal Year, the Collateral Agent and MRT shall each have the
right to negotiate a change in fees paid to Collateral Agent hereunder, neither
party being bound to agree to any such change.
8.06 SUCCESSOR COLLATERAL AGENT. Either Collateral Agent may resign
at any time by giving written notice thereof to the Lenders and MRT and may be
removed at any time with or without cause by the Required Holders. Upon any
such resignation or removal of the Corporate Collateral Agent, the Required
Holders shall
22
have the right to appoint a successor Corporate Collateral Agent. If no
successor Corporate Collateral Agent shall have been so appointed and shall
have accepted such appointment, within 30 days after the retiring Corporate
Collateral Agent's giving of notice of resignation or the Required Holders'
removal of the retiring Corporate Collateral Agent, then the retiring
Corporate Collateral Agent may, on behalf of the Required Holders, appoint a
successor Corporate Collateral Agent, which shall be a commercial bank
organized under the laws of the United States of America or of any state
thereof and having a combined capital surplus of at least $200,000,000 and
having comparable prior experience as the previous Corporate Collateral Agent
in acting as a trustee or agent for collateral similar in value and type as
the Collateral delivered herewith or may petition a court of competent
jurisdiction to appoint a successor Corporate Collateral Agent. Within 30
days of notification of a successor Corporate Collateral Agent, and provided
that no Event of Default has occurred and is continuing, MRT may recommend to
the Lenders one or more other institutional entities which would both qualify
to serve as Corporate Collateral Agent hereunder and would agree to so act,
and the Lenders agree to replace the successor Corporate Collateral Agent
with a new successor Corporate Collateral Agent selected by Lenders from
amongst such group of proposed entities if one of such proposed new successor
Corporate Collateral Agents is acceptable to the Lenders in their sole
discretion. Upon the acceptance of any appointment as Corporate Collateral
Agent hereunder by a successor Corporate Collateral Agent, such successor
Corporate Collateral Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring Corporate
Collateral Agent, and upon delivering the Collateral to the new Corporate
Collateral Agent the retiring Corporate Collateral Agent shall be discharged
from its duties and obligations under this Collateral Agreement and the other
Documents arising or accruing thereafter. Upon any such resignation or
removal of the Individual Collateral Agent the Corporate Collateral Agent
shall appoint a successor Individual Collateral Agent and shall notify both
Lenders and MRT of such appointment; PROVIDED, HOWEVER, that no Individual
Collateral Agent, or any co-Collateral Agent or any sub-agent, may be a
Lender or a direct employee of a Lender, other than a Lender approved by MRT.
After any retiring Collateral Agent's resignation or removal hereunder as
Collateral Agent, the provisions of this Article VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Collateral Agent under this Collateral Agreement and the other Documents.
8.07 PAYMENTS TO LENDERS. Payments to be made hereunder by the
Collateral Agent to each Lender from funds received by the Collateral Agent from
MRT, or in connection with the Indenture, or this Collateral Agreement shall be
made to such Lender at the address or to the account identified for payments on
the register provided for in the Indenture according to each Lender's pro rata
interest in the Liabilities. A Lender may change the address or account to
which payments shall be delivered under this Section, by delivering to
Collateral Agent reasonable advance written notice of such substituted address
or account for recordation in such register.
23
8.08 OTHER MATTERS RELATING TO THE COLLATERAL AGENT. (a) The
Corporate Collateral Agent shall be under no obligation or duty to take any
action under this Collateral Agreement or the other Documents if taking such
action (i) would subject the Corporate Collateral Agent to tax in any
jurisdiction where it is not then subject to a tax, (ii) would require the
Corporate Collateral Agent to qualify to do business in any jurisdiction where
it is not then so qualified, or (iii) would subject the Corporate Collateral
Agent to IN PERSONAM jurisdiction in any jurisdiction where it is not then so
subject, and in any such case, the Corporate Collateral Agent shall act through
the Individual Collateral Agent or appoint a co-Collateral Agent pursuant to
Section 8.10.
(b) The Collateral Agent may execute any of the rights or
powers, and perform any duties under, this Collateral Agreement or the other
Documents either directly or by or through agents or attorneys-in-fact, and the
Collateral Agent shall not be responsible for the default or misconduct of any
such agents or attorneys-in-fact selected by the Collateral Agent without gross
negligence or willful misconduct.
8.09 POWERS OF INDIVIDUAL COLLATERAL AGENT. The Individual
Collateral Agent has been joined as a party hereunder so that if, by any present
or future law in any jurisdiction in which it may be necessary to perform any
act in the execution of the trusts hereby created, the Corporate Collateral
Agent may be incompetent or unqualified to act as a Collateral Agent, then all
the acts required to be performed in such jurisdiction, in the execution of the
responsibilities hereby created, shall and will be performed by the Individual
Collateral Agent, acting alone. Therefore, notwithstanding any other term or
provisions hereof to the contrary, the Corporate Collateral Agent alone shall
have and exercise the rights and powers granted herein and shall be solely
charged with the performance of the duties herein declared on the part of the
Collateral Agent to be had and exercised or to be performed; PROVIDED, HOWEVER,
(i) that if the Corporate Collateral Agent, or the Required Holders, deem it
necessary or desirable for the Individual Collateral Agent to act in a
particular jurisdiction, the Individual Collateral Agent shall have and exercise
the right and powers granted herein (but no greater powers) and shall be charged
with the performance of the duties herein declared on the part of the Collateral
Agent to be had and exercised or to be performed, but only in such particular
jurisdiction, and (ii) the Individual Collateral Agent shall act as and be such
upon the term and condition that no power granted by this Collateral Agreement
to, or which this Collateral Agreement provides may be exercised by, the
Individual Collateral Agent shall be exercised by the Individual Collateral
Agent except jointly with, or with the consent in writing of, the Corporate
Collateral Agent.
8.10 ADDITIONAL COLLATERAL CO-AGENTS; SEPARATE COLLATERAL AGENTS.
(a) If at any time or times it shall be necessary or prudent in order to
conform to any law of any jurisdiction in which MRT shall be organized, or shall
conduct business or
24
maintain any Collateral, or the Collateral Agent shall be advised by counsel,
satisfactory to them, that it is so necessary or prudent in the interest of
the Lenders, or the Collateral Agent shall deem it desirable for their own
protection in the performance of their duties hereunder, the Collateral Agent
and the authorized representative of the Lenders shall execute and deliver
all instruments and agreements necessary or proper to appoint another bank or
trust company, or one or more persons approved by the Collateral Agent and
MRT, either to act as collateral co-agent or co-agents of all or any of the
Collateral, jointly with the Collateral Agent originally named herein or any
successor or successors, or to act as separate collateral agent or agents of
any such property. In the event MRT shall not have joined in the execution
of such instruments and agreements within 10 days after the receipt of a
written request from the Collateral Agent to do so, or in the case an Event
of Default shall have occurred and be continuing, the Collateral Agent may
act under the foregoing provisions of this Section 8.10 without the
concurrence of MRT and MRT hereby irrevocably appoints the Collateral Agent
and its agent and attorney to act under the foregoing provisions of this
Section 8.10 in either of such contingencies.
(b) Every separate collateral agent and every collateral co-agent,
other than any collateral agent which may be appointed as successor to either of
the Collateral Agent, shall, to the extent permitted by law, be appointed and
act and be such, subject to the following provisions and conditions, namely:
(i) all rights, powers, duties and obligations conferred upon
the Collateral Agent in respect of the custody, control and management
of moneys, papers or securities shall be exercised solely by the
Collateral Agent, or their successors as the Collateral Agent
hereunder;
(ii) all rights, powers, duties and obligations conferred or
imposed upon the Collateral Agent hereunder shall be conferred or
imposed and exercised or performed by the Collateral Agent and such
separate collateral agent or separate collateral agents or co-agents
or co-agents jointly, except to the extent that under any law of any
jurisdiction in which any particular act or acts are to be performed
that the Collateral Agent shall be incompetent or unqualified to
perform such act or acts, in which event such rights, powers, duties
and obligations shall be exercised and performed by such separate
collateral agent or separate collateral agents or co-agent or co-
agents;
(iii) no power given or provided hereby may be exercised by any
such collateral co-agent or co-agents or separate collateral agents,
except jointly with, or with the consent in writing of, the Collateral
Agent, anything herein contained to the contrary notwithstanding;
25
(iv) no collateral agent hereunder shall be personally liable by
reason of any act or omission of any other collateral agent hereunder;
and
(v) Collateral Agent at any time may accept the resignation of
or remove any such separate collateral agent or co-agent and in that
case, by an instrument in writing executed by the Collateral Agent,
may appoint a successor to such separate collateral agent or co-agent,
as the case may be, anything herein contained to the contrary
notwithstanding. In the event that the Collateral Agent shall have
appointed a separate collateral agent or separate collateral agents or
co-agent or co-agents as above provided, it may at any time, by an
instrument in writing, accept the resignation of or remove any such
separate collateral agent, the successor to any such separate
collateral agent or co-agent to be appointed by Collateral Agent.
8.11 PAYMENTS TO HOLDERS. Subject to the rights of the Collateral
Agent under Section 8.12 hereof, payments of any amount which may be received
hereunder from time to time for the benefit of the Holders shall be delivered to
the Trustee at the address or to the accounts identified by the Trustee for such
payments to be distributed by the Trustee pursuant to Section 10.06 of the
Indenture.
8.12 PRIOR LIEN. To secure the Issuer's obligations to make payments
and to provide indemnification to the Collateral Agent as contemplated by this
Collateral Agreement and the other Collateral Documents, the Collateral Agent
shall have a Lien prior to the Notes on all Collateral held or collected by the
Collateral Agent. Such Lien shall survive the termination of the Collateral
Documents.
8.13 SERVICES AFTER EVENT OF DEFAULT. When the Collateral Agent
incurs expenses or renders services after an Event of Default specified in
Section 6.01(e) of the Indenture occurs, the expenses and the compensation for
such services (including the fees and expenses of its agents and counsel) are
intended to constitute expenses of administration under any Bankruptcy Law.
ARTICLE IX
GENERAL PROVISIONS
9.01 NOTICES. All notices and other communications provided for
under this Collateral Agreement to be effective shall be sent in accordance with
the terms of Section 10.02 of the Indenture.
26
9.02 SEVERABILITY. If any of the provisions of this Collateral
Agreement shall for any reason be held to be invalid, illegal and unenforceable,
such invalidity, illegality or unenforceability shall not affect any other
provision hereof, and this Collateral Agreement shall be construed as if such
invalid, illegal or unenforceable provision had never been contained herein.
9.03 CAPTIONS. The captions, headings and arrangements used in this
Collateral Agreement are for convenience only and do not in any way affect,
limit, amplify or modify the terms and provisions hereof.
9.04 SUCCESSORS AND ASSIGNS. This Collateral Agreement and all
obligations of MRT and the Subsidiaries hereunder shall be binding upon the
successors and assigns of MRT and the Subsidiaries, and shall, together with the
rights and remedies of the Collateral Agent hereunder, inure to the benefit of
the Collateral Agent, the Lenders, and their respective successors and assigns.
9.05 APPLICABLE LAW AND JURISDICTION. (a) This Collateral Agreement
shall be governed by, and construed and interpreted in accordance with, the laws
of the State of New York, except that the provisions of this Collateral
Agreement creating an agency and setting forth the rights, duties, obligations
and liabilities of the Collateral Agent shall be governed by and construed in
accordance with the laws of the State of New York. The parties hereto hereby
submit to the non-exclusive jurisdiction of the courts of the State of New York
and the State of Delaware. However, to the extent the law of the State in which
particular Collateral is located requires that the law of such State be
applicable for purposes of enforcement of the Lenders' remedies with respect to
such Collateral, then for such limited purpose the law of such State shall
apply; except where such State permits or otherwise does not prohibit the
parties to waive the applicability of such State law in which case the parties
hereby waive applicability of such State law. In particular, MRT and each
Subsidiary hereby waives and disclaims any state law or principle of equity
which limits the ability of the Collateral Agent to sell or dispose of the
Collateral in multiple actions, rather than one action, by parcel rather than EN
MASSE in any particular order, or to obtain and/or enforce a deficiency judgment
in respect of any sale of any piece of Collateral.
(b) MRT and each Subsidiary hereby irrevocably waives any objection,
including, without limitation, any objection to the submission to jurisdiction
set forth above which it now or hereafter may have to the bringing of any such
action or proceeding in such jurisdiction.
(c) EACH OF THE PARTIES HERETO WAIVES ANY RIGHT IT MAY HAVE TO TRIAL
BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS OR REMEDIES
HEREUNDER.
27
9.06 DEFEASANCE. Upon payment or satisfaction in full of all the
Liabilities or upon receipt of direction by the Required Holders, the Collateral
Agent shall release, reconvey or reassign the Collateral without warranty to the
person or persons entitled thereto; PROVIDED, HOWEVER, that such release,
reconveyance or reassignment shall constitute a representation and warranty by
the Collateral Agent (whether or not so stated therein) that the Collateral
Agent has not assigned or encumbered the Collateral covered by such release,
conveyance or reassignment.
9.07 ATTORNEYS' FEES AND OTHER COSTS. All payments, fees, costs and
expenses, including the reasonable fees, costs and expenses of attorneys,
accountants, real estate advisors, and professional advisors employed or
retained by the Collateral Agent and incurred by the Collateral Agent in
performing any of its obligations or in asserting any of its rights or remedies
under this Collateral Agreement shall be payable by MRT to the Collateral Agent
as set forth herein and in the Indenture.
9.08 COUNTERPARTS. This Collateral Agreement may be executed in any
number of counterparts and by different parties in separate counterparts, copies
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and this same Collateral Agreement.
9.09 AMENDMENTS. No amendment or waiver of any provision of this
Collateral Agreement nor consent to any departure by MRT or the Subsidiaries
therefrom shall in any event be effective unless the same shall be in writing,
approved by the Required Holders and signed by the Collateral Agent, and then
any such waiver or consent shall only be effective in the specific instance and
for the specific purpose for which given.
9.10 NO WAIVER; REMEDIES. (a) No failure on the part of the
Collateral Agent or any Lender to exercise, and no delay in exercising any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any right hereunder preclude any other or further exercise thereof
or the exercise of any other right. The remedies herein provided are
cumulative, may be exercised singly or concurrently, and are not exclusive of
any remedies provided by law or any of the other Documents.
(b) Failure by the Collateral Agent or any of the Lenders at any time
or times hereafter to require strict performance by MRT or any Subsidiary or any
other Person of any of the provisions, warranties, terms or conditions contained
in any of the Documents now or at any time or times hereafter executed by MRT or
any Subsidiary or any such other Person and delivered to the Collateral Agent or
any of the Lenders shall not waive, affect or diminish any right of the
Collateral Agent or any of the Lenders at any time or times hereafter to demand
strict performance thereof, and such right shall not be deemed to have been
modified or waived by any
28
course of conduct or knowledge of the Collateral Agent or any of the Lenders,
or any agent, officer or employee of the Collateral Agent or any Lender.
9.11 LIMITATION OF LIABILITY. Any term or provision of this
Collateral Agreement or any other Document to the contrary notwithstanding, the
maximum aggregate amount of the Liabilities for which any Subsidiary shall be
liable shall not exceed the maximum amount for which such Subsidiary can be
liable without rendering this Collateral Agreement or any other Document, as it
relates to such Subsidiary, voidable under applicable law relating to fraudulent
conveyance or fraudulent transfer.
9.12 EXECUTION OF THIS COLLATERAL AGREEMENT. This Collateral
Agreement has been executed on behalf of MRT by an officer in his capacity as a
Trustee and officer of MRT. As provided in Section 7.02 of the Amended
Declaration of Trust of MRT, no Trustee, officer, agent or shareholder of MRT
shall be bound or held to any personal liability in connection with the
obligations of MRT arising out of the execution of this Collateral Agreement.
The execution of this Collateral Agreement by any of these individuals shall not
bind the individuals and they shall not be held to any personal liability in
connection with the obligations under this Collateral Agreement as a result of
such execution.
9.13 RIGHTS TO DEAL WITH COLLATERAL. (a) Subject to the provisions
and covenants of the Indenture and so long as no Event of Default has occurred
and is continuing, MRT shall have full rights to service and otherwise deal with
the Collateral, including the following: (a) to receive and utilize all
payments made with respect to the Collateral; (b) to work out the collection of
Receivables and any other amounts payable with respect to Collateral and to
compromise, extend, modify and take other steps with respect to the Collateral,
including amending the terms of the Collateral, extending maturities, modifying
interest rates, waiving and declaring defaults, proceeding with foreclosure,
accepting deeds in lieu thereof, and exercising any other legal remedies
available to it; (c) in the case of Collateral relating to loans as to which MRT
has an ongoing funding obligation, to continue to administer and fund such
loans; and (d) to operate and develop any Real Estate. Without limiting the
generality of the foregoing, MRT shall have the right to conduct any foreclosure
in its discretion, including pursuing actions which may limit the right to seek
a deficiency judgment. The Collateral Agent shall fully cooperate with MRT in
the exercise of such rights, including executing and delivering to MRT, subject
to the provisions of Section 6.01 hereof, promptly upon MRT's request, such
acknowledgements, agreements and other instruments and documents as MRT may
reasonably require to facilitate the exercise of such rights. So long as no
Event of Default has occurred and is continuing, MRT may, without obtaining the
Lenders' consent, take title to (i) a mortgage or equivalent security then held
by MRT or acquired in connection with property held by MRT for the purpose of
foreclosing upon such mortgage or equivalent security or (ii) Real Estate which
is the subject of the lien of a mortgage or
29
equivalent security then held by MRT or acquired in connection with property
held by MRT for the purpose of holding and operating such Real Estate in a
Subsidiary organized under Section 4.18 of the Indenture, provided that MRT
or such Subsidiary delivers to the Collateral Agent, at the time of taking
such title in such Subsidiary, (a) a mortgage lien upon the Real Estate to
the same extent, and having the same priority, as would have been required to
be delivered hereunder to the Collateral Agent had MRT taken title thereto,
(b) a pledge of one hundred (100%) percent of the issued and outstanding
capital stock of such Subsidiary pursuant to a pledge agreement in form and
substance satisfactory to the Collateral Agent, and (c) a legal opinion of
MRT's legal counsel as to compliance with the foregoing or such other
evidence to such effect as is reasonably satisfactory to the Collateral
Agent. Contemporaneous with delivery of the requirements of the preceding
sentence, MRT shall execute, deliver, file or record (as appropriate) all
necessary documents and instruments necessary to grant to the Collateral
Agent a valid, perfected and enforceable security interest in the assets and
capital stock of such Subsidiary, including, a duly authorized and executed
pledge of all of such Subsidiary's issued and outstanding capital stock (with
each stock certificate endorsed in blank), a mortgage or deed of trust, an
assignment of leases and rents, a security agreement, and such filings
necessary to comply with the Uniform Commercial Code adopted in the state in
which the Real Estate is located and the state or states in which such
Subsidiary is organized or is otherwise doing business.
(b) In the event that MRT desires to take any action not
otherwise provided for by this Collateral Agreement or the Indenture, MRT shall
deliver written notice of such proposed action to the Collateral Agent and the
Trustee which notice shall be executed by a trustee of MRT and shall be
accompanied by an explanation of the reasons why MRT desires that such proposed
action be taken. The Collateral Agent may direct MRT to deliver such other
opinions, instruments and documents that it deems reasonably necessary to assist
the Lenders in their determination of whether such proposed action is
acceptable. If the Collateral Agent or any Lender does not make a request to
MRT for additional information in connection with a proposed action within five
(5) Business Days of the Collateral Agent's receipt of the notice of proposed
action, then the Collateral Agent and the Lenders shall be deemed to have waived
the right to request additional information in connection with such proposed
action. Promptly following the Collateral Agent's and the Lenders' receipt of
all information requested in connection with the proposed action, the proposed
action shall be submitted by the Trustee to the Lenders for the consent of the
Required Holders pursuant to Section 9.02 of the Indenture. If the Required
Holders approve MRT's proposed action, then the Trustee shall so notify MRT and
the Collateral Agent of such approval, and upon receipt of such notice the
Collateral Agent shall fully cooperate with MRT in the exercise of such actions
and promptly execute and deliver to MRT the releases and other documents and
instruments specified or included in the notice of proposed action. If the
Required Holders do not deliver to the Trustee an objection, and if the Trustee
in turn does not
30
deliver a copy of such objection to MRT, within twenty (20) Business Days of
either (a) the Trustee's and the Lenders' receipt of all information
requested in connection with the proposed action or (b) the Collateral
Agent's or the Lenders' failure to make a request for additional information
within five (5) Business Days of the Collateral Agent's receipt of the notice
of proposed action, then the Lenders will be deemed to have approved such
action and the Collateral Agent shall fully cooperate with MRT in the
exercise of such action and promptly execute and deliver to MRT the releases
and other documents and instruments specified or included in the notice of
proposed action.
31
IN WITNESS WHEREOF, the parties hereto have caused this Collateral
Agreement to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
WILMINGTON TRUST COMPANY, as
Corporate Collateral Agent
By: /s/ ▇▇▇▇ St. ▇▇▇▇▇
--------------------------
Title: Vice President
▇▇▇▇▇▇▇ ▇. ▇▇▇▇, as Individual
Collateral Agent
/s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇
-------------------------
▇▇▇▇▇▇▇ ▇. ▇▇▇▇
MORTGAGE AND REALTY TRUST
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: C.F.O.
MRT WEST, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
32
MRT CREEKSIDE, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
--------------------------
Title: Vice President
MRT NEWARK, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
MRT SANTA ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Vice President
▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Treasurer
MUTUAL SERIES FUND, INC.
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
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Title: Vice President
33
INTERMARKET CORP.
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
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Title: Managing Director
▇▇▇▇▇▇, ▇▇▇▇▇▇ & CO.
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Authorized Signatory
EMERALD PARTNERS
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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Title: Vice President
▇▇▇▇▇▇-▇▇▇▇▇▇▇▇ INVESTMENT
MANAGEMENT, L.P.
By: No Signature
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Title:
34