<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): September 22, 1995
MORTGAGE AND REALTY TRUST
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 1-6613 23-1862664
- -------------------------------------------------------------------------------
(State or other jurisdiction (Commission (I.R.S. Employer of
incorporation) File Number) Identification No.)
8380 Old York Road
Suite 300
Elkins Park, Pennsylvania 19117-1590
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 215/881-1525
N/A
- -------------------------------------------------------------------------------
(Former name or former address, if changed since last report)
The Exhibit Index is located on Page 7.
<PAGE>
ITEM 3. (b) - Bankruptcy or Receivership
(1 and 2) On September 22, 1995, the United States Bankruptcy Court for the
Central District of California, entered the order confirming
Mortgage and Realty Trust's (the "Registrant") prepackaged plan
of reorganization without modification.
(3) The material features of the plan are set forth on the cover of
the Disclosure Statement attached hereto as Schedule 1. In
addition, Holders of Common Shares of the Company will retain
their shares, which will become Common Shares subject to
dilution resulting from the issuance of additional Common Shares
under the Prepackaged Plan and a 1-for-33.33 reverse stock split.
The confirmed prepackaged plan of reorganization, finalized
Amended and Restated Declaration of Trust, Amended and Restated
Indenture, Amended and Restated Collateral and Security
Agreement, Letter Agreement Indemnifying the Collateral Agent,
Waiver Letter Agreement, Registration Rights Agreement, and
Pledge Agreement, all dated as of September 29, 1995 which
govern and establish the rights of the Registrant's new security
holders are attached hereto as exhibits to the Registration
Statement.
(4) As of September 22, 1995, there was 11,226,215 Common
Shares outstanding. Upon the effective date of the Plan
(September 29, 1995) and after giving effect to the 1-for-33.33
reverse stock split, there are approximately 11,226,000
Common Shares.
(5) Information regarding the assets and liabilities of the
Registrant as of the date the order confirming the plan was
entered is set forth in "Exhibit A" to the Voluntary Petition
attached hereto as Schedule 2.
ITEM 7. (c) - Exhibits
2.1 Prepackaged Plan of Reorganization as confirmed by the Bankruptcy Court
of the Central District of California.
<PAGE>
3.1 Amended and Restated Declaration of Trust, dated September 29, 1995.
4.1 Amended and Restated Indenture, dated September 29, 1995.
4.2 Amended and Restated Collateral and Security Agreement, dated
September 29, 1995.
4.3 Letter of Agreement, dated September 29, 1995.
4.4 Letter of Waiver, dated September 29, 1995.
4.5 Pledge Agreement, dated September 29, 1995.
10.1 Registration Rights Agreement, dated September 29, 1995.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Mortgage and Realty Trust
-------------------------
Date: October 13, 1995 By: /S/ George R. Zoffinger
---------------- ------------------------
C.E.O.
<PAGE>
SCHEDULE I
DISCLOSURE STATEMENT AND
PROXY STATEMENT/PROSPECTUS FOR THE SOLICITATION
OF VOTES FOR THE PREPACKAGED PLAN OF REORGANIZATION OF
MORTGAGE AND REALTY TRUST
Mortgage and Realty Trust, a Maryland real estate investment trust (the
"Company"), upon the terms and subject to the conditions set forth in this
Disclosure Statement and Proxy Statement/Prospectus for the Solicitation of
Votes for the Prepackaged Plan of Reorganization of Mortgage and Realty Trust
(this "Disclosure Statement") and the accompanying forms of Ballot and/or Master
Ballot, hereby solicits (the "Plan Solicitation" or the "Solicitation") from
each holder (collectively, the "Holders") of Outstanding Notes, Outstanding
Common Shares, Other Secured Claims and Unsecured Claims (as each term is
hereinafter defined) as of the close of business on July 7, 1995 (the
"Record Date") acceptance of a prepackaged plan of reorganization (the
"Prepackaged Plan") under chapter 11 of title 11 of the United States Code, as
amended (the "Bankruptcy Code").
Consummation of the Prepackaged Plan will result in the restructuring
described in this Disclosure Statement (the "Restructuring"). The Prepackaged
Plan provides, among other things, that holders of the Company's debt securities
as of the date the Prepackaged Plan becomes effective (the "Effective Date")
shall receive the following securities, after giving effect to a one for 33.33
reverse stock split (the "Reverse Stock Split") of the Company's Common Shares,
par value $1.00 per share (the "Common Shares"):
FOR EACH $1,000 PRINCIPAL AMOUNT OF: THE HOLDER WILL RECEIVE:
Senior Secured Uncertificated Notes (a) $379.31 in principal amount of new
due 1995 (the "Outstanding Notes") 11-1/8% Senior Secured Notes due 2002
(the "New Senior Notes") (an aggregate
of $110,000,000 principal amount), (b) a
pro rata portion of an aggregate of at
least $50,000,000 less any amounts paid
between April 1, 1995 and the Petition
Date (as hereinafter defined) pursuant
to the Agreement of Understanding (as
hereinafter defined) (plus such
additional amount, if any, based upon
cash available in excess of the Initial
Cash Reserve Fund (as hereinafter
defined)) and (c) 37.55 Common Shares
(the "New Common Shares"). The due and
punctual payment of the principal of and
interest on the New Senior Notes will be
jointly, severally and unconditionally
guaranteed by the Subsidiaries of the
Company.
Under the Prepackaged Plan, holders of the Company's outstanding Common
Shares (the "Outstanding Common Shares") will retain their existing Common
Shares, subject to the Reverse Stock Split and the issuance of the New Common
Shares to holders of Outstanding Notes, as described above. However, the total
equity ownership in the Company of existing holders of Outstanding Common Shares
will be reduced from 100% to 3% under the Prepackaged Plan. IF THE CLASS OF
HOLDERS OF OUTSTANDING COMMON SHARES DOES NOT VOTE TO ACCEPT THE PREPACKAGED
PLAN, THE PREPACKAGED PLAN PROVIDES FOR A "CRAMDOWN" UNDER WHICH ALL OUTSTANDING
COMMON SHARES WILL BE CANCELLED AND HOLDERS OF OUTSTANDING COMMON SHARES WILL
NOT RECEIVE OR RETAIN ANYTHING. If the "cramdown" is effected, the New Common
Shares distributed to holders of Outstanding Notes will represent 99.5% of the
Company's outstanding equity securities after the Restructuring and the
remaining 0.5% will be distributed to charities designated by the Principal
Holders (as hereinafter defined).
- -------------------------------------------------------------------------------
THE PLAN SOLICITATION WILL EXPIRE AT 12:00 MIDNIGHT, NEW YORK CITY
TIME, ON AUGUST 17, 1995, UNLESS EXTENDED
(THE "EXPIRATION DATE").
- -------------------------------------------------------------------------------
------------------------
This Disclosure Statement is first being mailed to Record Holders on July 12,
1995.
<PAGE>
SCHEDULE II
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re Mortgage and Realty Trust , Case No.
-------------------------------------- -----------
Debtor Chapter 11
EXHIBIT "A" TO VOLUNTARY PETITION
[IF DEBTOR IS A CORPORATION FILING UNDER CHAPTER 11 OF THE CODE, THIS
EXHIBIT "A" SHALL BE COMPLETED AND ATTACHED TO THE PETITION.]
1. Debtor's employer identification number is 23-1862664.
2. If any of debtor's securities are registered under section 12 of the
Securities and Exchange Act of 1934, the SEC file number is 1-6613.
3. The following financial data is the latest available information and
refers to debtor's condition on June 30, 1995.
<TABLE>
<CAPTION>
<S> <C> <C>
a. Total assets $ 344,581,948.00
b. Total liabilities $ 347,591,767.00
Approximate number
of holders
Fixed, liquidated secured debt $ 326,171,931.00 44
Contingent secured debt $ 0.00 -0-
Disputed secured claims $ 0.00 -0-
Unliquidated secured debt $ 0.00 -0-
Approximate number
of holders
Fixed, liquidated unsecured debt $ 368,561.67 2
Contingent unsecured debt $ 0.00 -0-
Disputed unsecured claims $ 0.00 -0-
Unliquidated unsecured debt $ 0.00 -0-
Number of shares of preferred stock -0- -0-
Number of shares of common stock 11,226,215 16,000
Comments, if any: None.
</TABLE>
<PAGE>
Exhibit "A" continued
4. Brief descriptions of debtor's business:
The Debtor is a self-administered real estate investment trust with
assets consisting of 34 mortgage loans and 37 investments in real
estate located throughout the United States.
5. List the name of any person who directly or indirectly owns, controls,
or holds, with power to vote, 20% or more of the voting securities of
debtor:
None.
6. List the names of all corporations 20% or more of the outstanding
voting securities of which are directly or indirectly owned,
controlled, or held, with power to vote, by debtor:
None.
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER
- -------
2.1 Prepackaged Plan of Reorganization as confirmed by the
Bankruptcy Court of the Central District of California.
3.1 Amended and Restated Declaration of Trust, dated
September 29, 1995.
4.1 Amended and Restated Indenture, dated September 29, 1995.
4.2 Amended and Restated Collateral and Security Agreement,
dated September 29, 1995.
4.3 Letter of Agreement, dated September 29, 1995.
4.4 Letter of Waiver, dated September 29, 1995.
4.5 Pledge Agreement, dated September 29, 1995.
10.1 Registration Rights Agreement, dated September 29, 1995.
<PAGE>
EXHIBIT 2.1
IMPORTANT: A BANKRUPTCY CASE HAS NOT
BEEN FILED AS OF THE DATE OF THE
DISCLOSURE STATEMENT
Paul S. Aronzon (State Bar No. 88781)
Anne E. Wells (State Bar No. 155975)
MILBANK, TWEED, HADLEY & McCLOY
601 South Figueroa Street, 30th Floor
Los Angeles, California 90017
(213) 892-4000
Attorneys for Mortgage and Realty
Trust, a Maryland real estate
investment trust
UNITED STATES BANKRUPTCY COURT
CENTRAL DISTRICT OF CALIFORNIA
In re ) CASE NO. LA 95-31101-SB
)
MORTGAGE AND REALTY TRUST, a ) Chapter 11
Maryland real estate investment )
trust, ) PLAN OF REORGANIZATION PROPOSED
) BY MORTGAGE AND REALTY TRUST
Debtor. ) (Dated July 12, 1995)
)
) [No Hearing Scheduled]
)
)
)
)
TAX I.D. NO. 23-1862664 )
<PAGE>
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
1.1 Administrative Claim. . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Allowed Claim or Allowed Interest . . . . . . . . . . . . . . . . 1
1.3 Amended and Restated Declaration of Trust . . . . . . . . . . . . 2
1.4 Bankruptcy Code . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.5 Bankruptcy Court. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.6 Bankruptcy Rules. . . . . . . . . . . . . . . . . . . . . . . . . 2
1.7 Bar Date. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.8 Business Day. . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.9 Cash. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.10 Claim. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.11 Class 2 Expense Claims . . . . . . . . . . . . . . . . . . . . . 2
1.12 Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.13 Confirmation Date. . . . . . . . . . . . . . . . . . . . . . . . 3
1.14 Confirmation Order . . . . . . . . . . . . . . . . . . . . . . . 3
1.15 Creditor . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.16 Debtor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.17 Debtor in Possession . . . . . . . . . . . . . . . . . . . . . . 3
1.18 Disbursing Agent . . . . . . . . . . . . . . . . . . . . . . . . 3
1.19 Disclosure Statement . . . . . . . . . . . . . . . . . . . . . . 3
1.20 Disputed Claim or Disputed Interest. . . . . . . . . . . . . . . 3
1.21 Effective Date . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.22 Entity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.23 Estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.24 Excluded Claims. . . . . . . . . . . . . . . . . . . . . . . . . 4
1.25 File or Filed. . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.26 Final Order. . . . . . . . . . . . . . . . . . . . . . . . . . . 4
1.27 Initial Cash Distribution Fund . . . . . . . . . . . . . . . . . 5
1.28 Initial Cash Reserve Fund. . . . . . . . . . . . . . . . . . . . 5
1.29 Instrument . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.30 Interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.31 Lien . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.32 New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
1.34 New Collateral Documents . . . . . . . . . . . . . . . . . . . . 5
1.35 New Common Shares. . . . . . . . . . . . . . . . . . . . . . . . 6
1.36 New Indenture Trustee. . . . . . . . . . . . . . . . . . . . . . 6
1.37 New Note Indenture . . . . . . . . . . . . . . . . . . . . . . . 6
1.38 New Notes. . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
1.39 New Plan Securities. . . . . . . . . . . . . . . . . . . . . . . 6
1.40 Other Secured Claims . . . . . . . . . . . . . . . . . . . . . . 6
1.41 Outstanding Collateral Agreement . . . . . . . . . . . . . . . . 6
1.42 Outstanding Common Shares. . . . . . . . . . . . . . . . . . . . 6
1.43 Outstanding Equity Securities. . . . . . . . . . . . . . . . . . 6
1.44 Outstanding Indenture Trustee. . . . . . . . . . . . . . . . . . 6
1.45 Outstanding Notes. . . . . . . . . . . . . . . . . . . . . . . . 6
1.46 Outstanding Note Indenture . . . . . . . . . . . . . . . . . . . 7
1.47 Outstanding Pledge Agreement . . . . . . . . . . . . . . . . . . 7
1.48 Outstanding Securities . . . . . . . . . . . . . . . . . . . . . 7
i
<PAGE>
Page
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1.49 Outstanding Stock Rights . . . . . . . . . . . . . . . . . . . . 7
1.50 Petition Date. . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.51 Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.52 Postpetition Tax Claims. . . . . . . . . . . . . . . . . . . . . 7
1.53 Prior Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.54 Priority Claim . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.55 Pro Rata . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
1.56 Registration Rights Agreement. . . . . . . . . . . . . . . . . . 8
1.57 Released Claims. . . . . . . . . . . . . . . . . . . . . . . . . 8
1.58 Reorganization Case. . . . . . . . . . . . . . . . . . . . . . . 8
1.59 Reorganized Debtor . . . . . . . . . . . . . . . . . . . . . . . 8
1.60 Scheduled. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.61 Schedules. . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.62 Senior Noteholders . . . . . . . . . . . . . . . . . . . . . . . 8
1.63 Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
1.64 Unsecured Claim. . . . . . . . . . . . . . . . . . . . . . . . . 8
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.2 Classification . . . . . . . . . . . . . . . . . . . . . . . . . 10
ARTICLE III
TREATMENT OF CLAIMS AND INTERESTS
3.1 Unclassified Claims (Administrative Claims) . . . . . . . . . . . 10
3.2 Class 1 (Priority Claims) . . . . . . . . . . . . . . . . . . . . 12
3.3 Class 2 (Outstanding Notes) . . . . . . . . . . . . . . . . . . . 13
3.3.1 Class 2 Expense Claims. . . . . . . . . . . . . . . . . . . . . 13
3.4 Class 3 (Other Secured Claims). . . . . . . . . . . . . . . . . . 15
3.5 Class 4 (Unsecured Claims). . . . . . . . . . . . . . . . . . . . 15
3.6 Class 5 (Outstanding Common Shares) . . . . . . . . . . . . . . . 15
3.7 Class 6 (Outstanding Stock Rights). . . . . . . . . . . . . . . . 15
ARTICLE IV
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
4.1 Assumption . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.2 Cure Payments. . . . . . . . . . . . . . . . . . . . . . . . . . 16
4.3 Rejection. . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
ARTICLE V
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
5.1 Cancellation of Outstanding Securities and Related Agreements. . 17
5.2 New Plan Securities and New Indenture. . . . . . . . . . . . . . 17
5.3 Distribution of Property Under the Plan. . . . . . . . . . . . . 18
5.4 Revesting of Assets. . . . . . . . . . . . . . . . . . . . . . . 23
5.5 Amended and Restated Declaration of Trust; Indemnification . . . 24
5.6 Management of the Reorganized Debtor . . . . . . . . . . . . . . 24
5.7 Objections to Claims or Interests. . . . . . . . . . . . . . . . 25
ii
<PAGE>
Page
----
5.8 Discharge of Debtor and Injunction . . . . . . . . . . . . . . . 25
5.9 No Liability for Solicitation or Participation . . . . . . . . . 26
5.10 Limitation of Liability. . . . . . . . . . . . . . . . . . . . . 26
5.11 Other Documents and Actions. . . . . . . . . . . . . . . . . . . 27
5.12 Authorized Actions . . . . . . . . . . . . . . . . . . . . . . . 27
5.13 Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
5.14 Retiree Benefits . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VI
CONFIRMATION
6.1 Confirmation . . . . . . . . . . . . . . . . . . . . . . . . . . 28
ARTICLE VII
CONFIRMATION AND EFFECTIVE DATE CONDITIONS
7.1 Conditions to Effective Date . . . . . . . . . . . . . . . . . . 28
7.2 Waiver of Conditions to the Effective Date . . . . . . . . . . . 29
ARTICLE VIII
RETENTION OF JURISDICTION
8.1 Retention of Jurisdiction. . . . . . . . . . . . . . . . . . . . 29
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 Exemption from Transfer Taxes . . . . . . . . . . . . . . . . . . 31
9.2 Application of Distributions. . . . . . . . . . . . . . . . . . . 31
9.3 Dissolution of Committees . . . . . . . . . . . . . . . . . . . . 31
9.4 Modification of the Plan. . . . . . . . . . . . . . . . . . . . . 32
9.5 Revocation of the Plan. . . . . . . . . . . . . . . . . . . . . . 32
9.6 Successors and Assigns. . . . . . . . . . . . . . . . . . . . . . 32
9.7 Saturday, Sunday or Legal Holiday . . . . . . . . . . . . . . . . 32
9.8 Post-Effective Date Effect of Evidences of Claims or Interests. . 32
9.9 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . 33
9.10 Severability of Plan Provisions. . . . . . . . . . . . . . . . . 33
9.11 No Admissions. . . . . . . . . . . . . . . . . . . . . . . . . . 33
EXHIBITS AND SCHEDULES
Exhibit A - Form of New Note Indenture
Exhibit B - Form of New Collateral Documents
Exhibit C - Form of Registration Rights Agreement
Exhibit D - Summary of Terms of Securities
Exhibit E - Schedule of Assumed Contracts and Unexpired Leases
Exhibit F - Schedule of Rejected Contracts and Leases
Exhibit G - Amended and Restated Declaration of Trust
iii
<PAGE>
INTRODUCTION
Mortgage and Realty Trust, a Maryland real estate investment trust (the
"Debtor"), hereby proposes the following plan of reorganization (the "Plan") for
the resolution of all claims against and equity interests in the Debtor.
Reference is made to the "Disclosure Statement and Proxy Statement - Prospectus
for the Solicitation of Votes for the Prepackaged Plan of Reorganization of
Mortgage and Realty Trust" (the "Disclosure Statement") for a discussion of the
Debtor's history, business, properties and results of operations, and for a
summary of the Plan and certain related matters.
All holders of claims against and equity interests in the Debtor are
encouraged to read the Plan and the Disclosure Statement in their entirety
before voting to accept or reject the Plan. No materials, other than the
Disclosure Statement and any exhibits and schedules attached thereto or
referenced therein, have been approved by the Debtor for use in soliciting
acceptances or rejections of the Plan.
ARTICLE I
DEFINITIONS, INTERPRETATION AND RULES OF CONSTRUCTION
In addition to such other terms as are defined in other sections of the
Plan, the following terms (which appear in the Plan as capitalized terms) have
the following meanings as used in the Plan:
1.1 ADMINISTRATIVE CLAIM: A Claim for costs and expenses of
administration allowed under section 503(b) of the Bankruptcy Code and referred
to in section 507(a)(1) of the Bankruptcy Code, including, without limitation:
(a) the actual and necessary costs and expenses incurred after the Petition Date
of preserving the Estate and operating the business of the Debtor (such as
wages, salaries or commissions for services and payments for goods) (b)
compensation for legal, financial advisory, accounting and other services and
reimbursement of expenses allowed under section 330 of the Bankruptcy Code; and
(c) all fees and charges assessed against the Estate under 28 U.S.C. SECTION
1930.
1.2 ALLOWED CLAIM OR ALLOWED INTEREST: A Claim against or Interest in the
Debtor to the extent that:
(a) (i) a proof of the Claim or Interest was or is timely Filed or
deemed timely Filed under applicable law or by reason of an order of the
Bankruptcy Court or (ii) if no proof of Claim or Interest is filed, the
Claim or Interest is Scheduled as liquidated, undisputed, and
noncontingent; and
(b) (i) the Claim or Interest is not a Disputed Claim or Disputed
Interest (but only to the extent that such Claim is not a Disputed Claim or
Disputed Interest);
(ii) the Claim or Interest is allowed by a Final Order (but only
to the extent allowed); or
(iii) the Claim or Interest is allowed under the Plan, but only to
the extent allowed.
1.3 AMENDED AND RESTATED DECLARATION OF TRUST: The Amended and Restated
Declaration of Trust of the Reorganized Debtor, substantially in the form of
Exhibit G.
1.4 BANKRUPTCY CODE: Title 11 of the United States Code, as in effect on
the Petition Date or as amended, as applicable to the Reorganization Case.
1.5 BANKRUPTCY COURT: The United States District Court having
jurisdiction over the Reorganization Case and, to the extent of any reference
made pursuant to section 157, title 28, United States Code, the unit of such
District Court constituted pursuant to section 151, title 28, United States
Code.
1.6 BANKRUPTCY RULES: The Federal Rules of Bankruptcy Procedure, the
Local Rules of the Bankruptcy Court and the guidelines and requirements of the
Office of the United States Trustee, as applicable from time to time in the
Reorganization Case.
A-1
<PAGE>
1.7 BAR DATE: The date, if any, fixed by the Bankruptcy Court pursuant to
Bankruptcy Rule 3003(c)(3) as the last day for filing proofs of claim in the
Reorganization Case.
1.8 BUSINESS DAY: Any day other than a Saturday, Sunday or "legal
holiday" (as defined in Bankruptcy Rule 9006(a)).
1.9 CASH: Legal tender accepted in the United States of America for the
payment of public and private debts, currently United States Dollars.
1.10 CLAIM: A claim against the Debtor, whether or not asserted or
allowed, as defined in section 101(5) of the Bankruptcy Code.
1.11 CLASS 2 EXPENSE CLAIMS: Any unpaid fees and reasonable unpaid out-
of-pocket costs or expenses earned or incurred through the Effective Date by the
Outstanding Indenture Trustee or the attorneys for the Senior Noteholders and
Mutual Series Fund, Inc., including, without limitation, reasonable out-of-
pocket costs and expenses and reasonable fees of legal counsel to the
Outstanding Indenture Trustee.
1.12 CONFIRMATION: The confirmation of the Plan effected by the
Confirmation Order.
1.13 CONFIRMATION DATE: The date on which the Bankruptcy Court enters the
Confirmation Order on its docket.
1.14 CONFIRMATION ORDER: The order of the Bankruptcy Court confirming the
Plan pursuant to section 1129 of the Bankruptcy Code.
1.15 CREDITOR: Any Entity that holds on the Effective Date a Claim
against the Debtor that arose or is deemed to have arisen before the Petition
Date, including a Claim against the Debtor of a kind specified in sections
502(g), 502(h) or 502(i) of the Bankruptcy Code.
1.16 DEBTOR: Mortgage and Realty Trust, a Maryland real estate investment
trust.
1.17 DEBTOR IN POSSESSION: The Debtor, as debtor in possession in the
Reorganization Case.
1.18 DISBURSING AGENT: The Reorganized Debtor or any other Entities
designated by the Reorganized Debtor pursuant to section 5.3.5 to distribute
property under the Plan.
1.19 DISCLOSURE STATEMENT: The Disclosure Statement and Proxy Statement
For the Solicitation of Votes For the Prepackaged Plan of Reorganization of
Mortgage and Realty Trust, dated July 12, 1995 (and all exhibits and
schedules annexed thereto or referred to therein) that relates to the Plan, as
it may have been amended or supplemented from time to time.
1.20 DISPUTED CLAIM OR DISPUTED INTEREST: A Claim or Interest as to which
a proof of claim or interest, as applicable, (a) has been Filed or deemed Filed
under applicable law, or by reason of an order of the Bankruptcy Court, but as
to which an objection has been or may be timely Filed and which objection, if
timely Filed, has not been withdrawn on or before any date fixed for Filing such
objections by the Plan or order of the Bankruptcy Court and has not been
overruled or denied by a Final Order or (b) has not been timely Filed, if such
proof of Claim or Interest was required to be Filed. Prior to the time that an
objection has been or may be deemed timely Filed, a Claim or Interest shall be
considered a Disputed Claim or Disputed Interest, as applicable, in its entirety
if: (i) the amount of the Claim or Interest specified in the proof of claim or
interest exceeds the amount of any corresponding Claim or Interest Scheduled by
the Debtor in its Schedules or its List of Equity Security Holders, as
applicable; (ii) any corresponding Claim or Interest Scheduled by the Debtor in
its Schedules or its List of Equity Security Holders, as applicable, has been
Scheduled as disputed, contingent or unliquidated, irrespective of the amount
Scheduled; or (iii) no corresponding Claim or Interest has been Scheduled by the
Debtor in its Schedules or its List of Equity Security Holders, as applicable.
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1.21 EFFECTIVE DATE: A Business Day, selected by the Debtor, (a) that is
at least eleven (11) calendar days after the Confirmation Date or, with the
consent of the Senior Noteholders, at least one (1) Business Day after the
Confirmation Date, if the Bankruptcy Court enters an order making Bankruptcy
Rule 7062 inapplicable to the proceedings respecting the Confirmation Order or
otherwise determining that the Effective Date may occur immediately following
Confirmation; and (b) on which: (x) no stay of the Confirmation Order is in
effect and (y) all conditions to the Effective Date set forth in section 7.1
hereof have been satisfied or waived pursuant to section 7.2 hereof.
1.22 ENTITY: An individual, corporation, limited liability company,
partnership, association, joint stock company, joint venture, estate, trust,
unincorporated organization, government or any political subdivision thereof,
governmental unit, Creditors' Committee, unofficial committee of creditors or
equity holders or other entity.
1.23 ESTATE: The estate created by the commencement of the Reorganization
Case under section 541 of the Bankruptcy Code.
1.24 EXCLUDED CLAIMS: Any obligations that arise under the Plan or any
document, instrument or agreement to be executed, delivered or assumed under the
Plan, including, without limitation, the obligations of the Reorganized Debtor
under the New Notes, the New Note Indenture, the New Collateral Documents, and
all documents, instruments and agreements delivered or to be delivered in
connection therewith.
1.25 FILE OR FILED: File or filed with the clerk of the Bankruptcy Court
in the Reorganization Case.
1.26 FINAL ORDER: An order or judgment of the Bankruptcy Court or other
court of competent jurisdiction as to which the time to appeal, seek leave to
appeal, petition for certiorari or move for reargument or rehearing has expired
and as to which no appeal, petition for certiorari or other proceedings for
reargument, rehearing or leave to appeal shall be pending or as to which any
right to appeal, petition for certiorari, reargue, rehear or seek leave to
appeal shall have been waived in writing in form and substance satisfactory to
the Debtor or the Reorganized Debtor or, in the event that an appeal, writ of
certiorari, or reargument or rehearing thereof or leave to appeal has been
motioned for or sought, such order of the court shall have been affirmed by the
highest court to which such order was appealed, or certiorari has been denied or
from which reargument or rehearing or leave to appeal was motioned for or
sought, and the time to take any further appeal, petition for certiorari, move
for reargument or rehearing or seek leave to appeal shall have expired.
1.27 INITIAL CASH DISTRIBUTION FUND: Cash in an amount not less than $50
million (less any amounts paid to the holders of the Outstanding Notes between
March 1, 1995 and the Petition Date), held by the Reorganized Debtor on the
Effective Date for distribution to holders of Allowed Class 2 Claims, in excess
of monies held by the Reorganized Debtor in the Initial Cash Reserve Fund.
1.28 INITIAL CASH RESERVE FUND: Cash in an amount not to exceed $10
million, held by the Reorganized Debtor on the Effective Date for use by the
Reorganized Debtor in its business operations.
1.29 INSTRUMENT: Such term has the meaning set forth in Section 5.3.8(b).
1.30 INTEREST: The interest of any equity security holder, as defined in
section 101(17) of the Bankruptcy Code, of the Debtor, whether or not asserted,
including an interest arising out of any Outstanding Stock Rights.
1.31 LIEN: Any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other,
including a lien as defined in section 101(37) of the Bankruptcy Code), security
interest or preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever, including any conditional sale or
other title retention agreement, the interest of a lessor under a capitalized
lease obligation, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing, under the Uniform Commercial
Code or comparable law of any jurisdiction, of any financing statement naming
the owner of the asset to which such Lien relates as debtor.
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1.32 NEW: New or amended and restated, as the case may be.
NEW COLLATERAL AGENT: Wilmington Trust Company and William J. Wade,
as collateral agent under the New Collateral Documents.
1.33 NEW COLLATERAL DOCUMENTS: The Collateral and Security Agreement
dated as of the Effective Date by and among the Reorganized Debtor and the New
Collateral Agent, including any exhibits or schedules thereto in substantially
in the form of Exhibit B, and the Mortgages, the Assignments of Leases, the
Collateral Assignments of Mortgages, the Pledge Agreement and the Collateral
Assignments of Leases (each as defined in the New Senior Note Indenture) and all
other documents, instruments and agreements delivered or to be delivered in
connection with the New Senior Note Indenture.
1.34 NEW COMMON SHARES: The common shares of beneficial interest in the
Reorganized Debtor to be distributed in accordance with the provisions of the
Plan.
1.35 NEW INDENTURE TRUSTEE: Wilmington Trust Company, as trustee under
the New Note Indenture.
1.36 NEW NOTE INDENTURE: The Outstanding Note Indenture, as amended and
restated, substantially in the form of Exhibit A.
1.37 NEW NOTES: The Senior Secured Notes due 2002 of the Reorganized
Debtor dated as of the Effective Date and issued pursuant to the New Note
Indenture. The New Notes are more fully described in section 3.3.2(a) and
Exhibit D.
1.38 NEW PLAN SECURITIES: The New Common Shares and the New Notes to be
distributed in accordance with the provisions of the Plan.
1.39 OTHER SECURED CLAIMS: Any Claim, other than a Claim of a holder of
Outstanding Notes, or a Class 2 Expense Claim, of a Creditor secured by a Lien
on property of the Estate, to the extent of the value, as determined by the
Bankruptcy Court pursuant to section 506(a) of the Bankruptcy Code, of such
Creditor's interest in such property of the Estate.
1.40 OUTSTANDING COLLATERAL AGREEMENT: The Collateral and Security
Agreement dated as of February 21, 1991 between, among others, the Debtor and
Wilmington Trust Company and William J. Wade, as Collateral Agents, relating to
the Outstanding Notes, as such agreement may have been amended or supplemented
from time to time prior to the Effective Date.
1.41 OUTSTANDING COMMON SHARES: The common shares of beneficial interests
in the Debtor, with a par value of $1.00 for each share, as authorized by the
declaration of trust of the Debtor, issued and outstanding prior to the
Effective Date.
1.42 OUTSTANDING EQUITY SECURITIES: The Outstanding Common Shares and the
Outstanding Stock Rights.
1.43 OUTSTANDING INDENTURE TRUSTEE: Wilmington Trust Company, as trustee
under the Outstanding Note Indenture, and any predecessor or successor trustee.
1.44 OUTSTANDING NOTES: The outstanding Senior Secured Uncertificated
Notes due 1995 issued by the Debtor under the Outstanding Note Indenture and
pursuant to the Prior Plan.
1.45 OUTSTANDING NOTE INDENTURE: The Indenture dated as of July 15, 1992
between the Debtor and Wilmington Trust Company, as Trustee, relating to the
Outstanding Notes, as such indenture may have been amended or supplemented from
time to time prior to the Effective Date.
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1.46 OUTSTANDING PLEDGE AGREEMENT THOSE certain pledge agreements
executed in connection with the Outstanding Note Indenture.
1.46 OUTSTANDING SECURITIES: The Outstanding Notes and the Outstanding
Equity Securities.
1.47 OUTSTANDING STOCK RIGHTS: Any right to purchase or otherwise acquire
common shares of beneficial interests in the Debtor, and any stock appreciation
or similar rights relating to common shares of beneficial interests in the
Debtor, existing prior to the Effective Date. "Outstanding Stock Rights" does
not include any rights arising solely out of the ownership of the Outstanding
Common Shares.
1.48 PETITION DATE: The date on which the Debtor Filed its voluntary
petition for relief commencing the Reorganization Case.
1.49 PLAN: This plan of reorganization, including the exhibits and
schedules hereto, either in its present form or as it may be amended,
supplemented or modified from time to time in accordance with the provisions of
the Plan and the Bankruptcy Code.
1.50 POSTPETITION TAX CLAIMS: Such term shall have the meaning set forth
in section 3.1.3(d).
1.51 PRIOR PLAN: The plan of reorganization of the Debtor confirmed by
the United States Bankruptcy Court for the Central District of California, in
Case No. LA 90-08976-SB, by order entered February 27, 1991, together with any
and all amendments to such plan of reorganization.
1.52 PRIORITY CLAIM: Any Claim, other than an Administrative Claim, of a
Creditor to the extent such Claim is entitled to priority under section 507(a)
of the Bankruptcy Code.
1.53 PRO RATA: With respect to distributions under the Plan,
proportionately so that the ratio of (a) the amount of consideration distributed
on account of a particular Allowed Claim or Allowed Interest to (b) the amount
of the Allowed Claim or Allowed Interest is the same as the ratio of (w) the
amount of consideration distributed on account of all Allowed Claims or Allowed
Interests of the class in which a particular Allowed Claim or Allowed Interest
is included to (x) the amount of all Allowed Claims or Allowed Interests of that
class.
1.54 REGISTRATION RIGHTS AGREEMENT: The Registration Rights Agreement
relating to the New Plan Securities, substantially in the form of Exhibit C.
1.55 RELEASED CLAIMS: Any and all actions, causes of action, claims,
liabilities, demands, and obligations of any kind or nature whatsoever that are
based upon or that arise out of any act or omission that is related to the
Reorganization Case or that are made in connection with or relate to
negotiating, formulating, implementing, confirming or consummating the Plan or
the Disclosure Statement; PROVIDED, HOWEVER, that the term "Released Claims"
shall not include any Excluded Claim.
1.56 REORGANIZATION CASE: The case under chapter 11 of the Bankruptcy
Code commenced by the Debtor on the Petition Date.
1.57 REORGANIZED DEBTOR: The Debtor, or any successor thereto by merger,
consolidation or otherwise, from and after the Effective Date.
1.58 SCHEDULED: Set forth on the Schedules.
1.59 SCHEDULES: The schedules of assets and liabilities filed by the
Debtor with the Bankruptcy Court in accordance with section 521 of the
Bankruptcy Code and Bankruptcy Rule 1007, as the same may be amended from time
to time in accordance with Bankruptcy Rule 1009 prior to the Effective Date.
1.60 SENIOR NOTEHOLDERS: Fidelity Management & Research Company, Angelo
Gordon & Co., Mutual Series Fund Inc., Strome - Susskind & Co., and Emerald
Partners, as holders of Outstanding Notes, acting by a vote of 66 2/3% of the
aggregate principal amount of Outstanding Notes held by them.
1.61 SHARES: The Outstanding Common Shares and the New Common Shares
outstanding immediately after consummation of the Plan.
1.62 UNSECURED CLAIM: Any Claim, that is not an Administrative Claim, a
Priority Claim, a Claim under or evidenced by the Outstanding Notes, the
Outstanding Note Indenture, the Outstanding Collateral Agreement or the Prior
Plan, an Other Secured Claim, or a Claim based upon the Outstanding Common
Shares or Outstanding Stock Rights.
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RULES OF INTERPRETATION: For the purposes of the Plan: (a) whenever from
the context it is appropriate, each term, whether stated in the singular or the
plural, shall include both the singular and the plural; (b) any reference in the
Plan to a contract, instrument, release or other agreement or document being in
a particular form or on particular terms and conditions means that such document
shall be substantially in such form or substantially on such terms and
conditions; PROVIDED, HOWEVER, that any change to such form, terms or conditions
that are material to a party to such document shall not be modified without such
party's consent; (c) any reference in the Plan to an existing document or
Exhibit Filed or to be Filed means such document or Exhibit, as it may have been
or may be amended, modified or supplemented; (d) unless otherwise specified in a
particular reference, all references in the Plan to sections, Articles and
Exhibits are references to sections, Articles and Exhibits of or to the Plan;
(e) the words "herein," "hereof," "hereto," "hereunder" and others of similar
import refer to the Plan in its entirety rather than to only a particular
portion of the Plan; (f) captions and headings to Articles and sections are
inserted for convenience of reference only and are not intended to be part of or
to affect the interpretations of the Plan; and (g) any term used in the Plan
that is not defined in the Plan, either in this Article I or elsewhere, but that
is used in the Bankruptcy Code or the Bankruptcy Rules has the meaning ascribed
to such term in the Bankruptcy Code or the Bankruptcy Rules, as applicable, and
the rules of construction set forth in section 102 of the Bankruptcy Code shall
apply.
TIME: In computing any period of time prescribed or allowed by the Plan,
the provisions of Bankruptcy Rule 9006(a) shall apply.
EXHIBITS AND SCHEDULES: All Exhibits and Schedules to the Plan not
attached to the Plan and Disclosure Statement shall be contained in separate
Exhibit Volumes which shall be Filed not less than twenty (20) days prior to the
hearing on Confirmation. The Exhibit Volumes may be inspected in the office of
the Clerk of the Bankruptcy Court during normal Bankruptcy Court hours. On or
before the Effective Date, the Debtor shall File such agreements and other
documents as may be necessary or appropriate to effectuate and further evidence
the terms and conditions of the Plan. All Filed Exhibits are incorporated
herein by this reference and made a part hereof.
ARTICLE II
CLASSIFICATION OF CLAIMS AND INTERESTS
2.1 GENERAL.
The following is a designation of the classes of Claims and Interests under
the Plan. In accordance with section 1123(a)(1) of the Bankruptcy Code,
Administrative Claims described in section 3.1 have not been classified and are
excluded from the following classes. A Claim or Interest is classified in a
particular class only to the extent that the Claim or Interest qualifies within
the description of that class, and is classified in another class or classes to
the extent that any remainder of the Claim or Interest qualifies within the
description of such other class or classes. A Claim or Interest is classified
in a particular class only to the extent that the Claim or Interest is an
Allowed Claim or Allowed Interest in that class and has not been paid, released
or otherwise satisfied before the Effective Date; a Claim or Interest that is
not an Allowed Claim or Allowed Interest is not in any class. Notwithstanding
anything to the contrary contained in the Plan, no distribution shall be made on
account of any Claim or Interest that is not an Allowed Claim or Allowed
Interest.
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2.2 CLASSIFICATION.
Claims and Interests are classified for all purposes, including
voting, confirmation and distribution pursuant to the Plan, as follows:
CLASS 1: Priority Claims.
CLASS 2: All Claims under or evidenced by the Outstanding Notes, the
Outstanding Note Indenture, the Outstanding Collateral Agreement, the
Outstanding Pledge Agreement, or any other document, instrument or
agreement delivered in connection therewith (Impaired).
CLASS 3: All Other Secured Claims (Impaired).
CLASS 4: Unsecured Claims against the Debtor that are not classified in any
other class of Claims, including, without limitation, Claims arising
from the purchase of goods and services (Impaired).
CLASS 5: Interests of Holders of Outstanding Common Shares (Impaired).
CLASS 6: Interests of Holders of Outstanding Stock Rights (Impaired).
ARTICLE III
TREATMENT OF CLAIMS AND INTERESTS
3.1 UNCLASSIFIED CLAIMS (ADMINISTRATIVE CLAIMS).
3.1.1 GENERAL.
Subject to the bar date provisions herein, the Reorganized Debtor
shall pay to each holder of an Administrative Claim, on account of the
Administrative Claim and in full satisfaction thereof, Cash equal to the
amount of such Administrative Claim, unless the holder agrees or shall have
agreed to other less favorable treatment of such Claim. Except as
otherwise provided herein, payment of an Administrative Claim will be made
on the later of (a) the Effective Date or (b) the date such payment would
have become due under the terms of such Claim in the absence of the
Reorganization Case.
3.1.2 PAYMENT OF STATUTORY FEES.
On or before the Effective Date, all fees payable pursuant to 28
U.S.C. SECTION 1930, as determined by the Bankruptcy Court at the hearing
on Confirmation, shall be paid in Cash equal to the amount of such
Administrative Claim.
3.1.3 BAR DATE FOR ADMINISTRATIVE CLAIMS.
(a) GENERAL PROVISIONS.
Except as provided below in sections 3.1.3(c) and (d), requests for
payment of Administrative Claims must be Filed no later than sixty (60)
days after the Effective Date. Holders of Administrative Claims
(including, without limitation, professionals requesting compensation
or reimbursement of expenses and the holders of any Claims for
federal, state or local taxes) that are required to File a request for
payment of such Claims and that do not File such requests by the
applicable bar date shall be forever barred from asserting such Claims
against the Debtor, the Reorganized Debtor or any of their respective
properties.
(b) PROFESSIONALS.
All professional or other Entities requesting compensation or
reimbursement of expenses pursuant to sections 327, 328, 330, 503(b) and
1103 of the Bankruptcy Code for services rendered before the Effective Date
(including, without limitation, any compensation requested by any
professional or any other Entity for making a substantial contribution in
the Reorganization Case) shall File and serve on the Reorganized Debtor an
application for final allowance of compensation and reimbursement of
expenses no later than sixty (60) days after the Effective Date.
Objections to applications of professionals for compensation or
reimbursement of expenses must be Filed and served on the Reorganized
Debtor and the professionals to whose application the objections are
addressed in accordance with an order of the Bankruptcy Court.
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(c) ORDINARY COURSE LIABILITIES.
Holders of Administrative Claims based on liabilities incurred by the
Debtor in Possession in the ordinary course of the Debtor's business (other
than Claims of governmental units for taxes or Claims and/or penalties
related to such taxes) and Claims arising under loans or advances to the
Debtor in Possession, whether or not incurred in the ordinary course of
business, shall not be required to File any request for payment of such
Claims. Such Administrative Claims shall be assumed and paid by the
Reorganized Debtor pursuant to the terms and conditions of the particular
transaction giving rise to such Administrative Claim without any further
action by the holders of such Claims.
(d) POSTPETITION TAX CLAIMS.
All requests for payment of Administrative Claims and other Claims by
a governmental unit for taxes (and for interest and/or penalties related to
such taxes) for any tax year or period, all or any portion of which occurs
or falls within the period from and including the Petition Date through and
including the Effective Date ("Postpetition Tax Claims") and for which no
bar date has otherwise been established prior to the Effective Date, must
be Filed on or before the later of (i) thirty (30) days following the
Effective Date; and (ii) 120 days following the filing of the tax return
for such taxes for such tax year or period with the applicable governmental
unit. Any holder of any Postpetition Tax Claim that is required to File a
request for payment of such taxes and does not File such a request by the
applicable bar date shall be forever barred from asserting any such
Postpetition Tax Claim against any of the Debtor, the Reorganized Debtor or
their respective properties, whether any such Postpetition Tax Claim is
deemed to arise prior to, on, or subsequent to the Effective Date.
3.2 CLASS 1 (PRIORITY CLAIMS):
3.2.1 SECTION 507(A)(8) PRIORITY CLAIMS.
Unless the applicable taxing agency agrees to less favorable
treatment, the Reorganized Debtor shall pay to each holder of an Allowed
Priority Claim entitled to priority under section 507(a)(8) of the
Bankruptcy Code deferred Cash payments, over a period not exceeding six
years from the date of assessment of such Claim, in an aggregate amount
equal to the amount of such Allowed Claim, plus interest from the Effective
Date on the unpaid portion of such Allowed Claim (without penalty of any
kind) at the rate prescribed below. The payment of the amount of each such
Allowed Priority Claim shall be made in equal semiannual installments
commencing on the latest of: (i) the Effective Date, (ii) 30 calendar days
after the date on which an Order allowing such Claim becomes a Final Order
and (iii) such other time or times as may be agreed to by the holder of
such Claim and the Reorganized Debtor. Each installment shall include
simple interest on the unpaid portion of such Allowed Claim, without
penalty of any kind, at the applicable statutory rate of interest provided
for such taxes under applicable nonbankruptcy law; PROVIDED, HOWEVER, that
the Reorganized Debtor shall have the right to pay any Claim entitled to
priority under section 507(a)(8) of the Bankruptcy Code, or any remaining
balance of such Claim, in full, at any time on or after the Effective Date,
without premium or penalty of any kind.
3.2.2 OTHER PRIORITY CLAIMS.
Except as otherwise provided in the Plan and subject to compliance
with the terms of the Plan, to the extent not previously paid, each holder
of an Allowed Priority Claim entitled to priority under sections 507(a)(3),
507(a)(4), 507(a)(5) or 507(a)(6) of the Bankruptcy Code shall be paid the
full amount of its Allowed Priority Claim in Cash on the Effective Date (or
as soon as practicable after the date on which any such Claim is allowed if
the date of allowance is later than the Effective Date).
3.3 CLASS 2 (OUTSTANDING NOTES).
The Class 2 Claims are impaired under the Plan. The Class 2 Claims
(other than Class 2 Expense Claims) shall be Allowed Claims (whether or not a
proof of Claim is Filed) in an amount estimated not to exceed $355,000,000.
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On the Effective Date, each holder of an Allowed Class 2 Claim (other than
the Class 2 Expense Claims, which shall be treated as described in
section 3.3.1) shall receive its Pro Rata share of:
(a) Cash in the Initial Cash Distribution Fund; plus
(b) New Notes in the principal amount of $110 million; plus
(c) 10,889,000 New Common Shares which shall represent 97% in the
aggregate of the Shares, (or New Common Shares which shall represent 99.5%
of the Shares if the holders of Class 5 Interests do not vote to accept the
Plan in accordance with section 1126(d) of the Bankruptcy Code, with .5% of
the New Common Shares to be distributed to charities designated by the
Senior Noteholders).
On the Effective Date or as soon thereafter as is practicable, the
Reorganized Debtor and each holder of an Allowed Class 2 Claim receiving in
excess of 5% of the New Common Shares or the New Notes shall be entitled to
enter into the Registration Rights Agreement relating to the New Plan
Securities.
3.3.1 CLASS 2 EXPENSE CLAIMS.
The Reorganized Debtor shall pay to the applicable party entitled to
payment an amount equal to the amount of the Class 2 Expense Claims.
Payment of such Class 2 Expense Claims shall constitute distributions on
account of the Allowed Claims in Class 2, in addition to the distributions
provided for such class in section 3.3; and distributions otherwise
provided under the Plan to holders of Allowed Class 2 Claims under
section 3.3 shall not be reduced on account of such payment of Class 2
Expense Claims. Notwithstanding anything in this section 3.3.1 to the
contrary, the Reorganized Debtor's obligation to pay the Class 2 Expense
Claims shall be subject to the same bar date and procedural provisions set
forth in section 3.1.3(a), and the procedures regarding resolution of
contested Claims and Interests set forth in section 5.7, and, pursuant to
Section 1129(a)(4) of the Bankruptcy Code, are subject to the approval of
the Bankruptcy Court as reasonable.
3.3.2 GENERAL DESCRIPTION OF NEW PLAN SECURITIES DISTRIBUTABLE TO
HOLDERS OF CLASS 2 ALLOWED CLAIMS.
The securities to be issued and distributed to holders of Allowed
Class 2 Claims under the Plan include the following:
(a) NEW NOTES.
The terms and conditions of the New Notes shall be as provided in the
form of New Notes and the New Note Indenture. By way of summary, the New
Notes (i) shall be issued by the Reorganized Debtor in denominations of
$1,000 (or integral multiples thereof) in an aggregate principal amount not
to exceed $110 million; (ii) shall be dated as of the Effective Date and
mature on the seventh (7th) anniversary of the Effective Date; (iii) shall
be guaranteed by each of the subsidiaries of the Debtor; and (iv) shall be
secured under the New Note Indenture and the New Collateral Documents by
Liens on substantially all of the assets of the Reorganized Debtor.
Interest on the New Notes shall accrue from the Effective Date at a per
annum rate of 11-1/8%. Interest on the New Notes shall be payable in Cash
semiannually in arrears on June 30 and December 31, commencing after the
Effective Date.
(b) NEW COMMON SHARES.
Under the Plan, the Reorganized Debtor shall issue up to 10,889,000
million New Common Shares to holders of Allowed Class 2 Claims (subject to
rounding to account for fractional shares, as described in section 5.3.3).
The New Common Shares shall represent shares of beneficial interest in the
Reorganized Debtor and the terms and conditions of the New Common Shares
shall be as provided in the Amended and Restated Declaration of Trust, and
as provided by applicable law. Each New Common Share shall have a par
value of $1.00. Certain matters relating to voting rights of holders of
New Common Shares are described in section 5.5.
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3.4 CLASS 3 (OTHER SECURED CLAIMS).
The Class 3 Claims are impaired under the Plan. To the extent not
previously paid, all Allowed Class 3 Claims will be (at the option of the
Reorganized Debtor with the consent of the Senior Noteholders): (a) paid in
full, in Cash on the Effective Date (or as soon as practicable after the
date on which any such Claim is allowed if the date of allowance is later
than the Effective Date); (b) paid upon such other less favorable terms as
may be mutually agreed upon by the Reorganized Debtor and the holder of
such Claim; or (c) reinstated and paid or performed by the Reorganized
Debtor in accordance with section 1124 of the Bankruptcy Code, or the
legal, equitable and contractual rights to which such Claim entitles the
holder of such Claim shall be left unaltered.
3.5 CLASS 4 (UNSECURED CLAIMS).
The Class 4 Claims are impaired under the Plan. Each holder of a
Class 4 Claim shall receive on the Effective Date, or as soon thereafter as
the Claim becomes an Allowed Claim, whichever is later, Cash equal to the
amount of such Allowed Class 4 Claim unless the holder of such Claim agrees
to a less favorable treatment.
3.6 CLASS 5 (OUTSTANDING COMMON SHARES).
The Class 5 Interests are impaired under the Plan. If holders of
Allowed Class 5 Interests vote to accept the Plan in accordance with
section 1126(d) of the Bankruptcy Code, then each holder of an Allowed
Class 5 Interest shall retain its existing Outstanding Common Shares,
subject to a reverse stock split and the issuance of New Common Shares to
holders of Allowed Class 2 Claims, after which holders of Allowed Class 5
Interests will hold shares representing 3% in the aggregate of the Shares.
If holders of Class 5 Interests do not vote to accept the Plan in
accordance with section 1126(d) of the Bankruptcy Code, no distributions
shall be made under the Plan on account of Interests of holders of
Outstanding Common Shares by the Debtor or from property of the Debtor, and
all Interests in Class 5 and the Outstanding Common Shares shall be
cancelled and extinguished.
3.7 CLASS 6 (OUTSTANDING STOCK RIGHTS).
The Class 6 Interests are impaired under the Plan. The Outstanding
Stock Rights will be canceled and no distributions shall be made to holders
of Outstanding Stock Rights under the Plan. Each of the holders of an
Interest in Class 6 shall receive or retain no property under the Plan on
account of such Interest.
ARTICLE IV
TREATMENT OF EXECUTORY CONTRACTS AND UNEXPIRED LEASES
4.1 ASSUMPTION.
Unless previously assumed or rejected by order of the Bankruptcy Court
pursuant to section 365 of the Bankruptcy Code, as of the Effective Date,
the Reorganized Debtor shall assume, pursuant to section 365 of the
Bankruptcy Code, each of the executory contracts and leases of the Debtor
that are not rejected under section 4.3 including the executory contracts
and leases that are identified in Exhibit E. The Debtor reserves the right
at any time prior to the hearing on Confirmation, with the consent of the
Senior Noteholders, to amend Exhibit E either to: (a) delete any executory
contract or lease listed therein and provide for its rejection pursuant to
section 4.3 hereof or (b) add any executory contract or lease to Exhibit E,
thus providing for its assumption (or assumption and assignment) pursuant
to this section 4.1. The Debtor shall provide notice of any amendment to
Exhibit E to the parties to the executory contract or lease affected
thereby. The Confirmation Order shall constitute an order of the
Bankruptcy Court approving all such assumptions described in this section
4.1, pursuant to section 365 of the Bankruptcy Code, as of the Effective
Date.
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4.2 CURE PAYMENTS.
Any monetary defaults under each executory contract and lease to be assumed
under the Plan shall be satisfied, pursuant to section 365(b)(1) of the
Bankruptcy Code in either of the following ways: (1) by payment of the default
amount in Cash on the Effective Date; or (2) by payment of the default amount on
such other terms as agreed to by the Reorganized Debtor and the non-Debtor
parties to such executory contract or lease. In the event of a dispute
regarding (i) the amount or timing of any cure payments, (ii) the ability of the
Reorganized Debtor to provide adequate assurance of future performance under the
contract or lease to be assumed or (iii) any other matter pertaining to
assumption (or assumption and assignment) of the contract or lease to be
assumed, the cure payments required by section 365(b)(1) of the Bankruptcy Code
shall be made following the entry of a Final Order resolving the dispute and
approving assumption.
4.3 REJECTION.
Unless previously assumed or rejected by order of the Bankruptcy Court
pursuant to section 365 of the Bankruptcy Code, on the Effective Date, all
documents, agreements, contracts and leases listed on Exhibit F shall be
rejected, to the extent, if any, that any of the foregoing constitute executory
contracts or unexpired leases, and without conceding or admitting that they
constitute executory contracts or unexpired leases or that the Debtor has any
liability thereunder. The Debtor reserves the right at any time prior to the
hearing on Confirmation, with the consent of the Senior Noteholders, to amend
Exhibit F either to: (a) delete any contract or lease listed therein and provide
for its assumption pursuant to section 4.1 or (b) add any contract or lease to
Exhibit F, thus providing for its rejection pursuant to this section 4.3. The
Debtor shall provide notice of any amendment of Exhibit F to the parties to the
contract or lease affected thereby.
The Confirmation Order shall constitute an Order of the Bankruptcy Court
approving all such rejections pursuant to section 365 of the Bankruptcy Code as
of the Effective Date. Any Claim for damages arising from the rejection under
the Plan of an executory contract or unexpired lease must be Filed within thirty
(30) days after the mailing of notice of the entry of the Confirmation Order or
be forever barred and unenforceable against the Debtor, its Estate, the
Reorganized Debtor and its properties and barred from receiving any distribution
under the Plan on account of such Claim.
ARTICLE V
MEANS FOR EXECUTION AND IMPLEMENTATION OF THE PLAN
5.1 CANCELLATION OF OUTSTANDING SECURITIES AND RELATED AGREEMENTS.
Except as expressly provided in the Plan or in the Confirmation Order, on
the Effective Date, the Outstanding Securities, the Outstanding Note Indenture,
the Outstanding Collateral Agreement, the Outstanding Pledge Agreement, the
Prior Plan, the Outstanding Stock Rights and all obligations of the Debtor under
any of the foregoing, shall be terminated and canceled.
5.2 NEW PLAN SECURITIES AND NEW INDENTURE.
On or before the Effective Date, the Reorganized Debtor, the New Indenture
Trustee, and the New Collateral Agent shall have executed the New Note Indenture
and the New Collateral Documents, as applicable. On the Effective Date or as
soon as practicable thereafter, the Reorganized Debtor and each holder of
Allowed Class 2 Claims receiving 5% or more of the New Common Shares or the New
Notes shall be entitled to execute and deliver the Registration Rights
Agreement. All of the documents described in this paragraph shall become
effective and binding on the Reorganized Debtor on and as of the Effective Date.
On and after the Effective Date, the Reorganized Debtor shall issue the New Plan
Securities in accordance with this Article V.
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5.3 DISTRIBUTION OF PROPERTY UNDER THE PLAN.
5.3.1 DISTRIBUTION DATE.
Subject to the provisions of this section 5.3, and except as otherwise
provided herein, property to be distributed to an impaired class (a) shall
be distributed on or as soon as practicable after the Effective Date to
each holder of an Allowed Claim or an Allowed Interest of that class that
is an Allowed Claim or Allowed Interest as of the Effective Date, and (b)
shall be distributed to each holder of an Allowed Claim or an Allowed
Interest of that class that is allowed after the Effective Date, to the
extent allowed, as soon as practicable after such Claim or Interest becomes
an Allowed Claim or Allowed Interest. Property to be distributed under the
Plan to a class that is not impaired or on account of a Claim of a kind
described in Bankruptcy Code section 507(a)(1) or Class 2 Expense Claims
shall be distributed on the latest of (i) the later of the two dates
specified in the preceding sentence and (ii) the date on which the
distribution to the holder of the Allowed Claim would have been due and
payable under the terms of the Allowed Claim in the absence of the
Reorganization Case.
5.3.2 HOLDERS OF OUTSTANDING SECURITIES ENTITLED TO RECEIVE
DISTRIBUTIONS.
Any distribution under the Plan on account of an Allowed Claim under
or evidenced by Outstanding Notes shall be made to the holders of record of
such Outstanding Notes as of the Effective Date. At the close of business
on the Effective Date, the transfer ledgers for the Outstanding Notes shall
be closed, and there shall be no further changes in the record holders of
the Outstanding Notes. The Debtor, the Reorganized Debtor, the Outstanding
Indenture Trustee shall have no obligation to recognize any transfer of the
Outstanding Notes occurring on or after the Effective Date. The Debtor,
the Reorganized Debtor, and the Outstanding Indenture Trustee shall be
entitled instead to recognize and deal for all purposes hereunder with only
those record holders stated on the transfer ledgers for the Outstanding
Notes, as of the close of business on the Effective Date.
5.3.3 FRACTIONAL INTERESTS.
The calculation of the percentage distribution of New Plan Securities
to be made to holders of certain Allowed Claims as provided elsewhere in
the Plan may mathematically entitle the holder of such an Allowed Claim to
a fractional interest in one or more of such New Plan Securities.
Notwithstanding such entitlement, New Notes to be issued under the Plan
shall be issued and distributed only in denominations of $1,000 and
integral multiples thereof, and only whole New Common Shares shall be
issued and distributed. For purposes of applying the following two
paragraphs, the holders of Allowed Claims under or evidenced by Outstanding
Notes shall, in the case of Outstanding Notes held in street name, mean the
beneficial holders thereof as of the Effective Date.
(a) NEW NOTES.
All New Notes that would have been distributed under the Plan in
denominations of less than $1,000 but for the preceding paragraph, shall be
aggregated into New Notes having denominations of $1,000 or integral
multiples thereof. On the Effective Date or as soon thereafter as is
practicable, the Disbursing Agent shall sell for Cash such aggregated New
Notes in such manner and over such period of time as the Disbursing Agent
considers appropriate to reasonably assure the maximization of the sale
value of such New Notes. Upon the completion of such sales, the Disbursing
Agent shall distribute the net proceeds thereof to the holders of the
respective Allowed Claims ratably, in direct proportion to their respective
interests in the New Notes to be sold. Notwithstanding the foregoing
provisions of this section 5.3.3, if the aggregation (in accordance with
this section 5.3.3) of New Notes results in a principal amount that is not
$1,000 or an integral multiple thereof, such principal amount shall be
rounded up to the next such integral multiple of $1,000 of New Notes and
the principal amount of such New Notes so rounded up shall be sold by the
Disbursing Agent as provided in this section 5.3.3.
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(b) NEW COMMON SHARES.
The number of New Common Shares to be received by a holder of an
Allowed Claim shall be rounded to the next greater or lower integer of
shares as follows: (a) fractions of 1/2 or greater shall be rounded to the
next greater whole number and (b) fractions of less than 1/2 shall be
rounded to the next lower integer. The total number of New Common Shares
to be distributed to a class of Claims shall be adjusted as necessary to
account for the rounding provided for in this section 5.3.3(b). No
consideration shall be paid in lieu of fractional shares that are rounded
down.
5.3.4 PRO RATA DISTRIBUTION.
Except as otherwise provided herein, the property to be distributed to
Class 2 under the Plan shall be divided Pro Rata among the holders of
Allowed Claims of such class. Solely for the purpose of applying the
definition of "Pro Rata" to the distributions within such class, the amount
of the Allowed Claims in Class 2 shall be determined as of the Effective
Date, based on outstanding principal amounts of the Outstanding Notes,
without including any accrued and unpaid interest and shall exclude the
Class 2 Expense Claims.
5.3.5 DISBURSING AGENT.
The Reorganized Debtor, or such other Entity or Entities as the
Reorganized Debtor may employ, subject to the reasonable consent of the
Senior Noteholders, shall act as Disbursing Agents under the Plan and make
all distributions required under the Plan. Any Disbursing Agent may employ
or contract with other Entities to assist in or perform the distribution of
property under the Plan. Unless otherwise determined by the Reorganized
Debtor, each Disbursing Agent shall serve without bond. Each third party
Disbursing Agent shall receive, without further Bankruptcy Court approval,
reasonable compensation for distribution services rendered pursuant to the
Plan and reimbursement of reasonable out-of-pocket expenses incurred in
connection with such services from the Reorganized Debtor on terms agreed
to with the Reorganized Debtor.
5.3.6 DISPUTED CLAIMS OR INTEREST.
Notwithstanding any other provisions of the Plan, no payments or
distributions shall be made on account of any Disputed Claim or Interest
until such Claim or Interest becomes an Allowed Claim or Interest, and then
only to the extent that it becomes an Allowed Claim or Interest.
5.3.7 MANNER OF PAYMENT UNDER THE PLAN.
Cash payments made pursuant to the Plan shall be in U.S. dollars by
checks drawn on a domestic bank selected by the Reorganized Debtor, or by
wire transfer from a domestic bank, at the Reorganized Debtor's option,
except that payments made to foreign trade creditors holding Allowed Claims
may be paid, at the option of the Reorganized Debtor in such funds and by
such means as are necessary or customary in a particular foreign
jurisdiction. Distributions of Cash pursuant to section 3.3.1.(a) shall be
made by mail as set forth above or, upon request of a holder of an Allowed
Class 2 Claim, by wire transfer in accordance with written instructions
received therefrom.
5.3.8 SURRENDER OF INSTRUMENTS.
(a) REQUIREMENTS TO SURRENDER OR DELIVER INSTRUMENTS OR
DOCUMENTS.
As a condition to the receipt of any distribution under the Plan: (i)
a holder of an Outstanding Note shall deliver to the Outstanding Indenture
Trustee or its designee such transaction instructions or other documents of
transfer or exchange as the Outstanding Indenture Trustee shall request;
and (ii) a holder of a document or instrument of the Debtor other than an
Outstanding Note shall surrender the document or instrument to the
Disbursing Agent or its designee. However, holders of the Outstanding
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Common Shares are not required to surrender such document or instrument.
Prior to the Effective Date, each holder of a document or instrument will
receive specific instructions regarding the time and manner in which the
document or instrument is to be surrendered or delivered. Immediately upon
the Effective Date and until such surrender or delivery, such document or
instrument will be deemed canceled and represent only the right to receive
the distributions to which the holder is entitled under the Plan.
(b) LOST, STOLEN, MUTILATED OR DESTROYED INSTRUMENTS.
Any bond, debenture, share of stock, other security or note, whether
or not a security (collectively "Instruments"), or transaction instruction,
that is lost, stolen, mutilated or destroyed shall be deemed surrendered
when the holder of a Claim or Interest based thereon delivers to the
Outstanding Indenture Trustee, or Disbursing Agent or their respective
designee, (i) evidence satisfactory to the Outstanding Indenture Trustee,
Disbursing Agent or designee of the loss, theft, mutilation or destruction
of such Instrument or (ii) such security or indemnity as may be required by
the Outstanding Indenture Trustee, Disbursing Agent or designee to save
each of them harmless with respect thereto.
(c) EFFECT OF FAILURE TO SURRENDER OR DELIVER INSTRUMENTS OR
DOCUMENTS.
Any holder of an Instrument of the Debtor that fails to surrender or
deliver or be deemed to have surrendered or delivered the Instrument or
relevant transaction instruction or other document within two years after
the Effective Date shall be forever barred from receiving any distribution
under the Plan. In such cases, any property held for distribution on
account of a Claim or Interest based on such Instrument shall become
property of the Reorganized Debtor in the manner provided in
section 5.3.10(b)(2) for unclaimed distributions. To the extent that any
such property is held by a Disbursing Agent other than the Reorganized
Debtor, such Disbursing Agent shall return such property to the Reorganized
Debtor.
5.3.9 DELIVERY OF DISTRIBUTIONS AND UNDELIVERABLE OR UNCLAIMED
DISTRIBUTIONS.
(a) DELIVERY OF DISTRIBUTIONS IN GENERAL.
Except as provided below in this section 5.3.9 for undeliverable
distributions, distributions to holders of Allowed Claims and Allowed
Interests shall be distributed by mail as follows: (a) except in the case
of the holder of an Instrument for which there is an indenture trustee or
stock transfer agent, (1) to the addresses set forth on the respective
proof of claim or interest filed by such holders; (2) to the addresses set
forth in any written notices of address changes delivered to the Disbursing
Agent(s) after the date of any related proof of claim or interest; or (3)
to the address reflected on the Schedules if no proof of claim or interest
is Filed and the Disbursing Agent(s) have not received a written notice of
a change of address; and (b) in the case of the holder of an Instrument for
which there is an indenture trustee or stock transfer agent, to the latest
mailing address maintained of record by the pertinent indenture trustee,
security registrar or stock transfer agent, or, if no mailing address is
maintained of record, to the pertinent indenture trustee, security
registrar or stock transfer agent.
(b) UNDELIVERABLE DISTRIBUTIONS.
(1) HOLDING AND INVESTMENT OF UNDELIVERABLE PROPERTY.
If the distribution to the holder of a Claim or Interest is returned
to a Disbursing Agent as undeliverable, no further distribution shall be
made to such holder unless and until the Reorganized Debtor or the
applicable Disbursing Agent is notified in writing of such holder's then
current address. Subject to section 5.3.9(b)(2), undeliverable
distributions shall remain in the possession of the applicable Disbursing
Agent pursuant to this section 5.3.9 until such times as a distribution
becomes deliverable.
Unclaimed Cash (including interest, dividends and other consideration,
if any, distributed on or received for undeliverable New Plan Securities)
shall be held in trust in a segregated bank account in the name of the
applicable Disbursing Agent for the benefit of the potential claimants of
such funds, and
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shall be accounted for separately. Such funds shall be held in
interest-bearing accounts to the extent practicable, and the parties
entitled to such funds shall be entitled to any interest earned on such
funds. Undeliverable New Plan Securities shall be held in trust for the
benefit of the potential claimants of such securities by the applicable
Disbursing Agent in principal amount of notes and in number of shares
sufficient to fund the unclaimed amounts of such securities, and shall be
accounted for separately.
(2) DISTRIBUTION OF UNDELIVERABLE PROPERTY AFTER IT BECOMES
DELIVERABLE AND FAILURE TO CLAIM UNDELIVERABLE PROPERTY.
Within thirty (30) days after the end of each calendar quarter
following the Effective Date, the applicable Disbursing Agents shall make
distributions of property that has become deliverable during the preceding
quarter. Each such distribution shall include any dividends, interest
payments or other distributions made on account of the distributed
property.
Any holder of an Allowed Claim or Allowed Interest who does not assert
a claim for an undeliverable distribution held by a Disbursing Agent within
one (1) year after the Effective Date shall no longer have any claim to or
interest in such undeliverable distribution, and shall be forever barred
from receiving any distributions under the Plan. In such cases any
property held for distribution on account of such Allowed Claims or Allowed
Interests shall be returned to and/or retained by the Reorganized Debtor,
as follows: (1) any Cash shall be the property of the Reorganized Debtor,
free from any restrictions thereon; (2) any New Notes shall be canceled;
and (3) any New Common Shares reserved for issuance shall be held by the
Reorganized Debtor as unrestricted treasury shares. Nothing contained in
the Plan shall require the Debtor, the Reorganized Debtor or any Disbursing
Agent to attempt to locate any holder of an Allowed Claim or an Allowed
Interest.
5.3.10 COMPLIANCE WITH TAX REQUIREMENTS.
In connection with the Plan, to the extent applicable, each
Disbursing Agent shall comply with all withholding and reporting
requirements imposed on it by any governmental unit, and all
distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.
5.3.11 SETOFFS.
The Reorganized Debtor may, but shall not be required to, setoff
against any Allowed Claim and the distributions to be made pursuant to
the Plan on account of such Allowed Claim, claims of any nature that
the Debtor or the Reorganized Debtor may have against the holder of
such Allowed Claim; PROVIDED, HOWEVER, that neither the failure to
effect such a setoff nor the allowance of any Claim against the Debtor
or the Reorganized Debtor shall constitute a waiver or release by the
Debtor or the Reorganized Debtor of any claim that the Debtor or the
Reorganized Debtor may possess against such holder.
\MO REVESTING OF ASSETS.
Except as otherwise provided in any provision of the Plan, on the
Effective Date, all property of the Estate of the Debtor shall revest in
the Reorganized Debtor, free and clear of all Claims, liens, encumbrances
and other interests of holders of Claims and Interests. From and after the
Effective Date, the Reorganized Debtor may operate its business and use,
acquire and dispose of property and settle and compromise Claims or
Interests without supervision by the Bankruptcy Court and free of any
restrictions of the Bankruptcy Code or Bankruptcy Rules, other than those
restrictions expressly imposed by the Plan, the Confirmation Order, the New
Note Indenture and the New Collateral Documents, and any document,
agreement or instrument delivered in connection therewith.
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5.5 AMENDED AND RESTATED DECLARATION OF TRUST; INDEMNIFICATION.
On the Effective Date, the Reorganized Debtor shall adopt the Amended
and Restated Declaration of Trust pursuant to section 8-501 of title 8 of
the Corporations and Associations Law article of the Annotated Code of
Maryland and section 1123(a)(5)(I) and (b)(5) of the Bankruptcy Code. The
Amended and Restated Declaration of Trust will, INTER ALIA: (i) authorize
the issuance of the New Common Shares; (ii) continue to prohibit the
issuance of nonvoting equity securities to the extent required by section
1123(a)(6) of the Bankruptcy Code. Pursuant to the Amended and Restated
Declaration of Trust and other relevant agreements, and notwithstanding any
other term or provision of the Plan to the contrary, the Reorganized Debtor
shall indemnify and hold harmless its current and former officers, trustees
and employees to the fullest extent permitted by applicable law with
respect to any such officer's, trustee's or employee's acts, conduct and
omissions whether arising before or after the Petition Date; and (iii)
impose certain transfer restrictions. Upon (i) Confirmation of the Plan,
(ii) the occurrence of the Effective Date and (iii) the filing with the
Maryland Secretary of State of the Amended and Restated Declaration of
Trust, the Amended and Restated Declaration of Trust will become effective.
5.6 MANAGEMENT OF THE REORGANIZED DEBTOR.
5.6.1 OFFICERS AND TRUSTEES.
The initial Board of Trustees of the Reorganized Debtor shall
consist of seven members, including (a) the Chief Executive Officer of
the Reorganized Debtor, (b) one member designated by Mutual Series
Fund, Inc., and (c) five members designated by the Senior Noteholders.
The members of the initial Board of Trustees shall be identified at or
prior to the hearing on Confirmation of the Plan. Such persons shall
be deemed elected to the Board of Trustees, and such elections shall
be deemed effective as of the Effective Date, without any requirement
of further action by shareholders or trustees of the Debtor or the
Reorganized Debtor. The persons identified as such in the Disclosure
Statement will serve as the initial officers of the Reorganized Debtor
as of the Effective Date. Subject to any requirement of Bankruptcy
Court approval under section 1129(a)(5) of the Bankruptcy Code, those
persons designated as trustees and officers of the Reorganized Debtor
shall assume their offices as of the Effective Date and shall continue
to serve in such capacities thereafter, pending further action of the
Board of Trustees or shareholders of the Reorganized Debtor in
accordance with the Amended and Restated Declaration of Trust and
applicable state law.
5.7 OBJECTIONS TO CLAIMS OR INTERESTS.
Except as otherwise provided, applications of professionals for
compensation and reimbursement of expenses under section 3.1.3(b), and
except as otherwise ordered by the Bankruptcy Court after notice and a
hearing, objections to Claims or Interests, including Administrative
Claims, or to requests for payment of Class 2 Expense Claims, shall be
Filed and served upon the holder of such Claim, Interest or Administrative
Claim, the Outstanding Indenture Trustee, or other relevant party as
applicable, not later than the later of (a) ninety (90) days after the
Effective Date, and (b) ninety (90) days after a proof of claim or interest
or request for payment of such Claim, Interest, Administrative Claim or
Class 2 Expense Claims is timely Filed, unless this period is extended by
the Bankruptcy Court. After the Effective Date, the Reorganized Debtor
shall have the exclusive right to object to Claims, Interests or Class 2
Expense Claims.
5.8 DISCHARGE OF DEBTOR AND INJUNCTION.
Except as otherwise provided in this Plan, the rights afforded in the
Plan and the treatment of all Claims and Interests herein shall be in
exchange for and in complete satisfaction, discharge and release of all
Claims and Interests of any nature whatsoever, including any interest
accrued on such Claims from and after the Petition Date, against the Debtor
and the Debtor in Possession, or any of their assets or properties. Except
as otherwise provided in the Plan or the Confirmation Order: (i) on the
Effective Date, the Debtor shall be deemed discharged and released to the
fullest extent permitted by section 1141 of the Bankruptcy Code from all
Claims and Interests, including, but not limited to, demands, liabilities,
Claims and Interests that arose
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before the Confirmation Date and all debts of the kind specified in
sections 502(g), 502(h) or 502(i) of the Bankruptcy Code, whether or not:
(a) a proof of claim or proof of interest based on such debt or Interest is
Filed or deemed Filed pursuant to section 501 of the Bankruptcy Code, (b) a
Claim or Interest based on such debt or Interest is allowed pursuant to
section 502 of the Bankruptcy Code or (c) the holder of a Claim or Interest
based on such debt or Interest has accepted the Plan; and (ii) all Entities
shall be precluded from asserting against the Reorganized Debtor, its
successors or its assets or properties any other or further Claims or
Interests based upon any act or omission, transaction or other activity of
any kind or nature that occurred prior to the Confirmation Date. Except as
otherwise provided in the Plan or the Confirmation Order, the Confirmation
Order shall act as a discharge of any and all Claims against and all debts
and liabilities of the Debtor, as provided in sections 524 and 1141 of the
Bankruptcy Code, and such discharge shall void any judgment against the
Debtor at any time obtained to the extent that it relates to a Claim
discharged.
Except as otherwise provided in the Plan or the Confirmation Order, on
and after the Effective Date, all Entities who have held, currently hold or
may hold a debt, Claim or Interest discharged pursuant to the terms of the
Plan are permanently enjoined from taking any of the following actions on
account of any such discharged debt, Claim or Interest: (1) commencing or
continuing in any manner any action or other proceeding against the Debtor,
the Reorganized Debtor, their successors or their respective property; (2)
enforcing, attaching, collecting or recovering in any manner any judgment,
award, decree or order against the Debtor, the Reorganized Debtor, their
successors or their respective property; (3) creating, perfecting or
enforcing any lien or encumbrance against the Debtor, the Reorganized
Debtor, their successors or their respective property; (4) asserting any
setoff, right of subrogation or recoupment of any kind against any
obligation due to the Debtor, the Reorganized Debtor, their successors or
their respective property; and (5) commencing or continuing any action, in
any manner, in any place that does not comply with or is inconsistent with
the provisions of the Plan or the Confirmation Order. Any Entity injured
by any willful violation of such injunction shall recover actual damages,
including costs and attorneys' fees, and, in appropriate circumstances, may
recover punitive damages, from the willful violator.
5.9 NO LIABILITY FOR SOLICITATION OR PARTICIPATION.
As specified in section 1125(e) of the Bankruptcy Code, Entities that
solicit acceptances or rejections of the Plan and/or that participate in
the offer, issuance, sale or purchase of securities offered or sold under
the Plan, in good faith and in compliance with the applicable provisions of
the Bankruptcy Code, are not liable, on account of such solicitation or
participation, for violation of any applicable law, rule or regulation
governing the solicitation of acceptances or rejections of the Plan or the
offer, issuance, sale or purchase of securities.
5.10 LIMITATION OF LIABILITY.
Neither the Debtor, the Debtor in Possession, the Reorganized Debtor,
the Senior Noteholders, the creditors' committee under the Prior Plan, nor
any of their employees, officers, trustees, members, agents or
representatives, nor any professional Entities employed by any of them
shall have or incur any liability to any Entity for any act taken or
omission made in good faith in connection with or related to formulating,
implementing, confirming or consummating the Plan, the Disclosure Statement
or any contract, instrument, release or other agreement or document created
in connection with the Plan.
5.11 OTHER DOCUMENTS AND ACTIONS.
The Debtor, the Debtor in Possession and the Reorganized Debtor may
execute such documents and take such other action as is necessary to
effectuate the transactions provided for in the Plan.
5.12 AUTHORIZED ACTIONS.
The issuance of New Common Shares and New Notes, the adoption of the
Amended and Restated Declaration of Trust, the selection of the persons who
will serve as the initial trustees and officers of the Reorganized Debtor
as of the Effective Date, the execution of the New Note Indenture, the New
Collateral
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Documents, the adoption of the other matters under the Plan involving the
corporate structure of the Debtor or the Reorganized Debtor or corporate
action by the Debtor or the Reorganized Debtor shall be deemed to have
occurred and be effective on and after the Effective Date without any
requirement of further action by shareholders or trustees of the Debtor or
the Reorganized Debtor. Without limiting the foregoing, upon entry of the
Confirmation Order by the clerk of the Bankruptcy Court, the filing by the
Debtor or the Reorganized Debtor of the Amended and Restated Declaration of
Trust shall be authorized and approved in all respects. On the Effective
Date or as soon thereafter as is practicable, pursuant to applicable state
law, the Reorganized Debtor shall file with the applicable state
governmental agencies or offices the Amended and Restated Declaration of
Trust.
5.13 RELEASES.
In consideration for the distributions to be made under the Plan and
the releases provided for herein, and in order to protect the Reorganized
Debtor from Claims for contribution or indemnity relating to pre-Effective
Date acts or omissions, as of the Effective Date: (i) the creditors'
committee formed under the Prior Plan, each holder of a Claim or Interest,
and each of the officers, directors, employees, members and professionals
of such committee or holder, shall be released from any Released Claims
that the Debtor may have against any of them (the "Debtor Release"); (ii)
the Debtor, the Reorganized Debtor, the creditors' committee under the
Prior Plan, the Senior Noteholders, and their respective officers,
directors, employees, members and professionals (collectively, the "Debtor
Releasees") shall be released from any Released Claims that any holder of a
Claim or Interest may have against any of the Debtor Releasees; and (iii)
the Debtor Releasees also shall be released from any and all actions,
causes of action, claims, liabilities, demands and obligations of any kind
or nature whatsoever that the Debtor, the Reorganized Debtor, the Debtor's
Estate or any holder of a Claim or Interest may have against any of the
Debtor Releasees that is based upon or that arises out of any alleged act
or omission by any of the Debtor Releasees that is related to the Debtor,
including, without limitation, the Reorganization Case, the Outstanding
Notes, the Outstanding Collateral Agreement, the Prior Plan, the
Outstanding Common Shares, the Outstanding Stock Rights or any of the
Claims or Interests in the Reorganization Case, PROVIDED, HOWEVER, that
this release shall not apply to Excluded Claims against the Debtor (the
release described in subparagraphs (ii) and (iii) is hereinafter referred
to as the "Creditor/Shareholder Release") and no holder of a Claim shall be
released until such Claim is allowed. Notwithstanding the foregoing, to
the extent that a holder of a Claim or Interest elects not to grant a
Creditor/Shareholder Release and receive a Debtor Release, such holder may
make such election by indicating its election to opt out of such releases
in the space provided for such election on the ballot for accepting or
rejecting the Plan. If a holder makes such election, the
Creditor/Shareholder Release shall not be enforceable against such holder,
and such holder shall not be released under the Debtor Release.
5.14 RETIREE BENEFITS.
On and after the Effective Date, to the extent required by section
1129(a)(13) of the Bankruptcy Code, the Reorganized Debtor shall continue
to pay all retiree benefits (if any), as the term "retiree benefits" is
defined in section 1114(a) of the Bankruptcy Code, maintained or
established by the Debtor prior to the Confirmation Date.
ARTICLE VI
CONFIRMATION
6.1 CONFIRMATION.
The Debtor requests Confirmation of the Plan under section 1129(a) and
section 1129(b) of the Bankruptcy Code if any impaired class does not
accept the Plan pursuant to section 1126 of the Bankruptcy Code, subject to
the consent of the Senior Noteholders. The Debtor reserves the right to
modify the Plan, subject to the consent of the Senior Noteholders, to the
extent, if any, that Confirmation of the Plan under section 1129(b) of the
Bankruptcy Code requires modification.
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ARTICLE VII
CONFIRMATION AND EFFECTIVE DATE CONDITIONS
7.1 CONDITIONS TO EFFECTIVE DATE.
The Plan shall not be consummated and the Effective Date shall not
occur unless and until each of the following conditions has been satisfied
or duly waived as specified below:
7.1.1 The Plan has been accepted by the requisite holders of
Claims in Class 2 pursuant to section 1126 of the Bankruptcy
Code;
7.1.2 The Clerk of the Bankruptcy Court has entered the
Confirmation Order, in form and substance satisfactory to the
Debtor and to the Senior Noteholders and unless otherwise agreed
to by the Senior Noteholders, such order shall have become a
Final Order;
7.1.3. No court shall have entered an order modifying or
staying the enforcement of the Confirmation Order or any such
stay shall have been vacated;
7.14 The New Note Indenture shall have been qualified under
the Trust Indenture Act of 1939, as amended, and no stop order
shall have been issued with respect thereto; and
7.15 The New Note Indenture and the New Collateral Documents
shall have been executed and delivered by the Reorganized Debtor
and each of its subsidiaries, and the New Indenture Trustee.
7.16 All other material documents, instruments or agreements
including, without limitation, the Amended and Restated
Declaration of Trust shall have been executed and delivered by
the parties thereto and become effective.
7.2 WAIVER OF CONDITIONS TO THE EFFECTIVE DATE.
The Debtor, with the consent of the Senior Noteholders, may waive any
of the conditions to the Effective Date.
ARTICLE VIII
RETENTION OF JURISDICTION
8.1 RETENTION OF JURISDICTION.
Notwithstanding the entry of the Confirmation Order or the occurrence
of the Effective Date, the Bankruptcy Court shall retain such jurisdiction
over the Reorganization Case after the Effective Date as is legally
permissible, including, without limitation, jurisdiction to:
8.1.1 Allow, disallow, determine, liquidate, classify or
establish the priority or secured or unsecured status of or
estimate any Claim or Interest, including, without limitation,
the resolution of any request for payment of any Administrative
Claim or Class 2 Expense Claim and the resolution of any and all
objections to the allowance or priority of Claims or Interests;
8.1.2 Grant or deny any and all applications for allowance of
compensation or reimbursement of expenses authorized pursuant to the
Bankruptcy Code or the Plan, for periods ending on or before the
Effective Date;
8.1.3 Resolve any motions pending on the Effective Date to
assume, assume and assign or reject any executory contract or
unexpired lease to which the Debtor is a party or with respect to
which the Debtor may be liable and to hear, determine and, if
necessary, liquidate, any and all Claims arising therefrom;
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8.1.4 Ensure that distributions to holders of Allowed Claims
and Allowed Interests are accomplished pursuant to the provisions of
the Plan;
8.1.5 Decide or resolve any and all applications, motions,
adversary proceedings, contested or litigated matters and any other
matters or grant or deny any applications involving the Debtor that
may be pending on the Effective Date;
8.1.6 Enter such orders as may be necessary or appropriate to
implement or consummate the provisions of the Plan and all contracts,
instruments, releases and other agreements or documents created in
connection with the Plan or the Disclosure Statement;
8.1.7 Resolve any and all controversies, suits or issues that
may arise in connection with consummation of the Plan;
8.1.8 Modify the Plan before or after the Effective Date
pursuant to section 1127 of the Bankruptcy Code, or to modify the
Disclosure Statement or any contract, instrument, release or other
agreement or document created in connection with the Plan or the
Disclosure Statement in accordance with section 1127 of the Bankruptcy
Code; or remedy any defect or omission or reconcile any inconsistency
in any Bankruptcy Court order, the Plan, the Disclosure Statement or
any contract, instrument, release or other agreement or document
created in connection with the Plan or the Disclosure Statement, in
such manner as may be necessary or appropriate to consummate the Plan,
to the extent authorized by the Bankruptcy Code;
8.1.9 Issue injunctions, enter and implement other orders or
take such other actions as may be necessary or appropriate to restrain
interference by any entity with consummation or enforcement of the
Plan;
8.1.10 Enter and implement such orders as are necessary or
appropriate if the Confirmation Order is for any reason modified,
stayed, reversed, revoked or vacated; and
8.1.11 Enter an Order on a Final decree closing the
Reorganization Case.
If the Bankruptcy Court abstains from exercising jurisdiction or is
otherwise without jurisdiction over any matter arising out of the
Reorganization Case, including without limitation the matters set forth in
this Article VIII, this Article VIII shall have no effect upon and shall
not control, prohibit or limit the exercise of jurisdiction by any other
court having competent jurisdiction with respect to such matter.
ARTICLE IX
MISCELLANEOUS PROVISIONS
9.1 EXEMPTION FROM TRANSFER TAXES.
Pursuant to section 1146(c) of the Bankruptcy Code, the issuance,
transfer or exchange of notes or equity securities under the Plan, the
creation of any mortgage, deed of trust or other security interest or
collateral assignment of mortgage, deed of trust or other security
interest, the making or assignment of any lease or sublease, the amendment
of any of the foregoing that may exist prior to the date hereof, or the
making or delivery of any deed or other instrument of transfer under, in
furtherance of, or in connection with the Plan or in connection with any of
the transactions contemplated under the Plan shall not be subject to any
stamp, real estate transfer, mortgage recording or other similar tax.
9.2 APPLICATION OF DISTRIBUTIONS.
If the distributions of property and interests in property hereunder
on account of any Allowed Claim are less than the aggregate amount of
principal and accrued but unpaid interest payable under the agreement
governing, instrument evidencing or other document relating to such Allowed
Claim, such distributions shall be applied first to principal and then to
accrued but unpaid interest.
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312 DISSOLUTION OF COMMITTEES.
On the Effective Date, any statutory committees of Creditors or
Interest holders shall dissolve and the members of such committees shall be
released and discharged from all further rights and duties arising from or
related to the Reorganization Case. The professionals retained by any such
committee and the members thereof shall not be entitled to compensation or
reimbursement of expenses for any services rendered after the Effective
Date, except for services rendered and expenses incurred in connection with
any applications for allowance of compensation and reimbursement of
expenses pending on the Effective Date or Filed after the Effective Date
pursuant to section 3.1.
9.4 MODIFICATION OF THE PLAN.
Subject to the restrictions on modifications to the Plan set forth in
section 1127 of the Bankruptcy Code, the Debtor, subject to the approval of
the Senior Noteholders, reserves the right to alter, amend or modify the
Plan before its substantial consummation.
9.5 REVOCATION OF THE PLAN.
The Debtor reserves the right to revoke or withdraw the Plan prior to
the Confirmation Date, with the consent of the Senior Noteholders. If the
Debtor revokes or withdraws the Plan, or if Confirmation does not occur or
if the Plan does not become effective, then the Plan shall be null and
void, and nothing contained in the Plan shall: (1) constitute a waiver or
release of any Claims by or against, or any interests in, the Debtor; (2)
constitute an admission of any fact or legal conclusion by the Debtor, the
Debtor in Possession or any other Entity; or (3) prejudice in any manner
the rights of the Debtor, the Debtor in Possession or any other Entity in
any further proceedings involving the Debtor, the Debtor in Possession, or
any other Entity.
9.6 SUCCESSORS AND ASSIGNS.
The rights, benefits and obligations of any Entity named or referred
to in the Plan shall be binding on, and shall inure to the benefit of, any
heir, executor, administrator, successor or assign of such Entity.
9.7 SATURDAY, SUNDAY OR LEGAL HOLIDAY.
If any payment or act under the Plan is required to be made or
performed on a date that is not a Business Day, then the making of such
payment or the performance of such act may be completed on the next
succeeding Business Day, but shall be deemed to have been completed as of
the required date.
9.8 POST-EFFECTIVE DATE EFFECT OF EVIDENCES OF CLAIMS OR INTERESTS.
Except as otherwise expressly provided in the Plan, notes, bonds,
stock certificates and other evidences of Claims against or Interests in
the Debtor shall, effective upon the Effective Date, represent only the
right to participate in the distributions contemplated by the Plan.
9.9 GOVERNING LAW.
Unless a rule of law or procedure is supplied by (i) federal law
(including the Bankruptcy Code and Bankruptcy Rules), (ii) an express
choice of law provision in any agreement, contract, instrument or document
provided for, or executed in connection with, the Plan, or (iii) the
Corporations and Associations Law article of the Annotated Code of
Maryland, the rights and obligations arising under the Plan and any
agreements, contracts, documents and instruments executed in connection
with the Plan shall be governed by, and construed and enforced in
accordance with, the laws of the State of California without giving effect
to the principles of conflict of laws thereof.
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9.10 SEVERABILITY OF PLAN PROVISIONS.
If prior to Confirmation any term or provision of the Plan that does
not govern the treatment of Claims or Interests or the conditions to the
Effective Date is held by the Bankruptcy Court to be invalid, void or
unenforceable, the Bankruptcy Court shall have the power, subject to the
consent of the Senior Noteholders, to alter and interpret such term or
provision to make it valid or enforceable to the maximum extent
practicable, consistent with the original purpose of the term or provision
held to be invalid, void or unenforceable, and such term or provision shall
then be applicable as altered or interpreted. Notwithstanding any such
holding, alteration or interpretation, the remainder of the terms and
provisions of the Plan will remain in full force and effect and will in no
way be affected, impaired or invalidated by such holding, alteration or
interpretation. The Confirmation Order shall constitute a judicial
determination and shall provide that each term and provision of the Plan,
as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
9.11 NO ADMISSIONS.
Notwithstanding anything herein to the contrary, nothing contained in
the Plan shall be deemed as an admission by the Debtor with respect to any
matter set forth herein including, without limitation, liability on any
Claim or the propriety of any Claims classification.
Dated: August 16, 1995
Respectfully submitted,
MORTGAGE AND REALTY TRUST
By: /s/ C.W. STRONG, JR.
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C.W. Strong, Jr., President
<PAGE>
Exhibit 3.1
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-------------------------------------
MORTGAGE AND REALTY TRUST
---------------
AMENDED AND RESTATED
DECLARATION OF TRUST
As amended and restated through September 29, 1995
----------------------------------------------------
----------------------------------------------------
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INDEX TO DECLARATION OF TRUST
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ARTICLE 1
THE TRUST; DEFINITIONS. . . . . . . . . . . . . . 1
1.1 Name.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Places of Business.. . . . . . . . . . . . . . . . . . . . . . . . . 1
1.3 Nature of Trust. . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.4 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 2
TRUSTEES . . . . . . . . . . . . . . . . . 5
2.1 Number, Term and Qualifications of Trustees. . . . . . . . . . . . . 5
2.2 Compensation and Other Remuneration. . . . . . . . . . . . . . . . . 5
2.3 Resignation, Removal and Death of Trustees.. . . . . . . . . . . . . 5
2.4 Vacancies. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Successor and Additional Trustees. . . . . . . . . . . . . . . . . . 6
2.6 Action by Trustees.. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.7 Non-Affiliated Trustees. . . . . . . . . . . . . . . . . . . . . . . 6
ARTICLE 3
TRUSTEES' POWERS . . . . . . . . . . . . . . . 7
3.1 Power and Authority of Trustees. . . . . . . . . . . . . . . . . . . 7
3.2 Specific Powers and Authorities. . . . . . . . . . . . . . . . . . . 7
3.3 By-Laws. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .11
ARTICLE 4
ADVISORY AGREEMENT. . . . . . . . . . . . . . .12
4.1 Employment of Adviser. . . . . . . . . . . . . . . . . . . . . . . .12
4.2 Term.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .12
4.3 No Restrictions on Adviser.. . . . . . . . . . . . . . . . . . . . .12
4.4 Duties of Adviser. . . . . . . . . . . . . . . . . . . . . . . . . .12
4.5 Agreement with Affiliate of Adviser. . . . . . . . . . . . . . . . .13
ARTICLE 5
INVESTMENT POLICY. . . . . . . . . . . . . . .13
5.1 General Statement of Policy. . . . . . . . . . . . . . . . . . . . .13
5.2 REIT Provisions of the Internal Revenue Code.. . . . . . . . . . . .13
5.3 Additional Investments.. . . . . . . . . . . . . . . . . . . . . . .13
5.4 Other Permissible Investments. . . . . . . . . . . . . . . . . . . .14
5.5 Prohibited Investments and Activities. . . . . . . . . . . . . . . .14
5.6 Additional Limitations.. . . . . . . . . . . . . . . . . . . . . . .16
5.7 Obligor's Default. . . . . . . . . . . . . . . . . . . . . . . . . .16
ARTICLE 6
THE SHARES AND SHAREHOLDERS . . . . . . . . . . . .16
6.1 Shares.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .16
6.2 Common Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . .17
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6.3 Preferred Shares.. . . . . . . . . . . . . . . . . . . . . . . . . .17
6.4 Legal Ownership of Trust Estate. . . . . . . . . . . . . . . . . . .18
6.5 Shares Deemed Personal Property. . . . . . . . . . . . . . . . . . .18
6.6 Share Record; Issuance and Transferability of Shares.. . . . . . . .18
6.7 Dividends or Distributions to Shareholders.. . . . . . . . . . . . .18
6.8 Transfer Agent, Dividend Disbursing Agent and Registrar. . . . . . .19
6.9 Shareholders' Meetings.. . . . . . . . . . . . . . . . . . . . . . .19
6.10 Proxies.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
6.11 Reports to Shareholders.. . . . . . . . . . . . . . . . . . . . . .20
6.12 Fixing Record Date. . . . . . . . . . . . . . . . . . . . . . . . .20
6.13 Notice to Shareholders. . . . . . . . . . . . . . . . . . . . . . .20
6.14 Restrictions on Transfer to Preserve Tax Benefit;
Designation of Shares-in-Trust. . . . . . . . . . . . . . . . . . .20
6.15 Legend. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
6.16 Shares-in-Trust.. . . . . . . . . . . . . . . . . . . . . . . . . .31
6.17 Exchange Transactions.. . . . . . . . . . . . . . . . . . . . . . .34
ARTICLE 7
LIABILITY OF TRUSTEES, SHAREHOLDERS
AND OFFICERS, AND OTHER MATTERS . . . . . . . . . . .35
7.1 Exculpation of Trustees and Officers.. . . . . . . . . . . . . . . .35
7.2 Limitation of Liability of Shareholders, Trustees and Officers.. . .35
7.3 Express Exculpatory Clauses in Instruments.. . . . . . . . . . . . .35
7.4 Indemnification of Trustees and Officers.. . . . . . . . . . . . . .36
7.5 Right of Trustees and Officers to Own Shares or Other
Property and to Engage in Other Business.. . . . . . . . . . . . . .36
7.6 Transactions Between the Trustees and the Trust. . . . . . . . . . .37
7.7 Restriction of Duties and Liabilities. . . . . . . . . . . . . . . .37
7.8 Persons Dealing with Trustees or Officers. . . . . . . . . . . . . .37
7.9 Reliance.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .38
ARTICLE 8
DURATION, AMENDMENT, TERMINATION
AND QUALIFICATION OF TRUST. . . . . . . . . . . . .38
8.1 Duration of Trust. . . . . . . . . . . . . . . . . . . . . . . . . .38
8.2 Termination of Trust.. . . . . . . . . . . . . . . . . . . . . . . .38
8.3 Amendment Procedure. . . . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE 9
MISCELLANEOUS. . . . . . . . . . . . . . . .40
9.1 Applicable Law.. . . . . . . . . . . . . . . . . . . . . . . . . . .40
9.2 Index and Headings for Reference Only. . . . . . . . . . . . . . . .40
9.3 Successors in Interest.. . . . . . . . . . . . . . . . . . . . . . .40
9.4 Counterparts.. . . . . . . . . . . . . . . . . . . . . . . . . . . .40
9.5 Provisions of the Trust in Conflict with Law or Regulations. . . . .40
9.6 Certifications.. . . . . . . . . . . . . . . . . . . . . . . . . . .41
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9.7 Recording and Filing.. . . . . . . . . . . . . . . . . . . . . . . .41
9.8 Resident Agent.. . . . . . . . . . . . . . . . . . . . . . . . . . .41
9.9 Names and Addresses of Trustees and Officers.. . . . . . . . . . . .41
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DECLARATION OF TRUST
The below-named Trustees have agreed to hold in trust as Trustees, any and
all property, real, personal or otherwise, tangible or intangible, which is
transferred, conveyed, or paid to them as such Trustees and all rents, income,
profits, and gains therefrom for the benefit of Shareholders hereunder subject
to the terms and conditions and for the uses and purposes hereinafter set forth.
ARTICLE 1
THE TRUST; DEFINITIONS
1.1 NAME. The name of the Trust shall be "Mortgage and Realty Trust". As
far as practicable and except as otherwise provided in this Declaration, the
Trustees shall conduct the Trust's activities, execute all documents and sue or
be sued in the name of the Trust or in their names as Trustees of the Trust.
1.2 PLACES OF BUSINESS. The registered office of the Trust in the State
of Maryland shall be c/o The Corporation Trust, Incorporated, 32 South Street,
Baltimore, Maryland 21202. However, the Trustees may from time to time change
such location and maintain other offices or places of business.
1.3 NATURE OF TRUST. The Trust is a real estate investment trust
organized under Article 78C of the Annotated Code of the State of Maryland. It
is intended that the Trust shall carry on business as a "real estate investment
trust" as described in the REIT Provisions of the Internal Revenue Code (as
defined herein). The Trust is not intended to be, shall not be deemed to be,
and shall not be treated as, a general partnership, limited partnership, joint
venture, corporation, joint stock company or association (but nothing herein
shall preclude the Trust from being taxable as an association under the REIT
Provisions of the Internal Revenue Code), nor shall the Trustees or Shareholders
or any of them for any purpose be, or be deemed or be treated in any way
whatsoever to be, liable or responsible hereunder as partners or joint
venturers. The relationship of the Shareholders to the Trustees shall be solely
that of beneficiaries of the Trust and their rights shall be limited to those
conferred upon them by this Declaration.
1.4 DEFINITIONS. The terms defined in this Section 1.4 whenever used in
this Declaration shall, unless the context otherwise requires, have the
respective meanings hereinafter specified in this Section 1.4. In this
Declaration, words in the singular number include the plural and in the plural
number include the singular.
(1) ADVISER. "Adviser" shall mean any person employed by the
Trustees under the provisions of Section 4.1 to manage and administer the
affairs of the Trust.
(2) AFFILIATE. "Affiliate" shall mean as to any Person, any other
Person which controls, is controlled by or under common control with, such
Person or is an officer, director, employee, partner or trustee of such
Person or of any other Person which controls, is controlled by, or under
common control with, such Person.
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(3) APPRAISAL. "Appraisal" shall mean a determination of the market
value, as of the date of such determination, of Real Property in its
existing state or in a state to be created, taking into consideration
existing or available financing where appropriate, (i) by any disinterested
independent appraiser who in the judgment of the Trustees is properly
qualified to make such a determination, or (ii) by an employee of the
Adviser or of an Affiliate of the Adviser if such employee has no economic
interest in such Real Property and (A) if such determination is relied upon
by the permanent lender (other than the Trust) on the same property or (B)
if such employee's appraisals are customarily accepted by institutional
customers of the Adviser or an Affiliate of the Adviser which is engaged in
the mortgage banking business or (C) if the property to be appraised is a
one-to-four family residential property. For purposes of clause (i) above,
no person who is a director, officer or employee of the Adviser or of any
Affiliate of the Adviser shall be deemed to be a disinterested independent
appraiser.
(4) APPRAISED VALUE. "Appraised Value" shall mean the market value
of Real Property as of the date of determination as determined by an
Appraisal.
(5) BOOK VALUE. "Book Value" of an asset or assets shall mean the
value of such asset or assets on the books of the Trust, before provision
for amortization, depreciation or depletion and before deducting any
indebtedness or other liability in respect of such asset or assets, except
that no asset shall be valued at more than its fair market value as
determined by the Trustees.
(6) BY-LAWS. "By-Laws" shall mean the regulations referred to in
Section 3.3.
(7) CAPITAL FUNDS. "Capital Funds" shall mean Shareholders' Equity
plus Long Term Debt less undistributed Net Income of the Trust.
(8) CONSTRUCTION LOANS. "Construction Loans" shall mean Mortgage
loans to finance all or part of the cost of acquiring and improving land
and the construction or improvement of buildings thereon.
(9) DECLARATION. "Declaration" shall mean this Declaration of Trust
and all amendments or modifications thereof. References in this
Declaration to "herein" and "hereunder' shall be deemed to refer to this
Declaration and shall not be limited to the particular text, article or
section in which such words appear.
(10) DEVELOPMENT LOANS. "Development Loans" shall mean Mortgage
loans to finance all or part of the cost of developing vacant land into a
site or sites suitable for the construction of buildings thereon or
suitable for other residential, commercial, industrial or public uses,
including the cost of acquiring land for such purpose.
(11) FIRST MORTGAGE. "First Mortgage" shall mean a Mortgage which
takes priority or precedence over all other charges or encumbrances upon
the same Real Property and which must be satisfied before such other
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charges or encumbrances are entitled to participate in the proceeds of any
sale or disposition. Such Mortgage may be upon a lessee's interest in Real
Property. Such priority shall not be deemed as abrogated by liens for
taxes, assessments which are not delinquent or remain payable without
penalty, contracts (other than contracts for repayment of borrowed moneys),
leases, mechanic's and materialman's liens for work performed and materials
furnished which are not in default or are in good faith being contested,
and other claims and interests normally deemed in the local jurisdiction
not to abrogate the priority of a first mortgage.
(12) INDEBTEDNESS. "Indebtedness" shall mean the amount as shown on
the balance sheet of the Trust of all obligations of the Trust for money
borrowed and all obligations issued or assumed by the Trust as full or
partial payment for property, in each case except to the extent money shall
have been set aside or deposited for the payment thereof.
(13) JUNIOR MORTGAGE. "Junior Mortgage" shall mean any Mortgage
other than a First Mortgage.
(14) LONG TERM DEBT. "Long Term Debt" shall mean Indebtedness with
original final maturities of more than three years from the date of
incurring such Indebtedness.
(15) MORTGAGE. "Mortgage" shall mean a mortgage, deed of trust or
other security interest in Real Property.
(16) NET ASSETS. "Net Assets" shall mean Total Assets less all
Indebtedness of the Trust.
(17) PERSON. "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a trust, a joint
venture, any unincorporated organization, or a government or political
subdivision thereof.
(18) REAL PROPERTY. "Real Property" shall mean and include land,
interests in land, leasehold interests (including but not limited to
interests of a lessor or lessee therein), and any buildings, structures,
improvements and fixtures located on or used in connection with land,
leasehold interests and rights in land or interests therein, but does not
include Mortgages, Mortgage loans, or interests therein.
(19) REIT PROVISIONS OF THE INTERNAL REVENUE CODE. "REIT Provisions
of the Internal Revenue Code" shall mean Part II, Subchapter M of Chapter
1, of the Internal Revenue Code of 1954, as now enacted or hereafter
amended, or similar provisions of successor statutes, and regulations
promulgated thereunder.
(20) SECURITIES. "Securities" shall mean any note, stock, treasury
stock, bond, debenture, evidence of indebtedness, certificate of interest
or participation in any profit-sharing agreement, collateral-trust
certificate, preorganization certificate or subscription, transferable
share, investment
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contract, voting-trust certificate, certificate of deposit for a security,
fractional undivided interest in oil, gas, or other mineral rights, or, in
general, any interest or instrument commonly known as a "security," or any
certificate of interest or participation in, temporary or interim
certificate for, receipt for, guarantee of, or warrant or right to
subscribe to or purchase, any of the foregoing.
(21) SHAREHOLDERS. "Shareholders" shall mean as of any particular
time the holders of record of outstanding Shares at such time.
(22) SHAREHOLDERS' EQUITY. "Shareholders' Equity" shall mean the
amount of Shareholders' equity as shown on the books of the Trust.
(23) SHARES. "Shares" shall mean the Common Shares and Preferred
Shares in the Trust as described in Section 6.1.
(24) SHORT TERM BORROWINGS. "Short Term Borrowings" shall mean
Indebtedness with original final maturities of three years or less from the
date of incurring such Indebtedness.
(25) TOTAL ASSETS. "Total Assets" shall mean the total assets of the
Trust as shown on its balance sheet, without deducting therefrom any
liabilities of the Trust and including depreciable assets therein at the
lesser of either (i) the cost of such assets on the books of the Trust less
depreciation thereof determined in accordance with generally accepted
accounting principles on a straight-line basis over the useful life of such
assets used as the basis of depreciation in preparing the Trust's federal
income tax returns, or (ii) the fair market value of such assets in the
judgment of the Trustees.
(26) TRUST. "Trust" shall mean the Trust created by this
Declaration.
(27) TRUST ESTATE. "Trust Estate" shall mean, as of any particular
time any and all property, real, personal or otherwise, tangible or
intangible, transferred, conveyed or paid to the Trust or Trustees, and all
rents, income, profits and gains therefrom, which at such time is owned or
held by the Trust or the Trustees.
(28) TRUSTEES. "Trustees" shall mean as of any particular time,
Trustees holding office under this Declaration at such time, whether they
be the Trustees named herein or additional or successor Trustees and shall
not include the officers, representatives or agents of the Trust or the
Shareholders, but nothing herein shall be deemed to preclude the Trustees
from also serving as officers, representatives or agents of the Trust or
owning Shares.
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ARTICLE 2
TRUSTEES
2.1 NUMBER, TERM AND QUALIFICATIONS OF TRUSTEES. There shall be not less
than five nor more than fourteen Trustees, at least a majority of whom shall at
all times be persons who are not Affiliates of the Adviser. The names of the
Trustees are set forth in Section 9.9. Within the limits set forth in this
Section 2.1, and subject to the provisions of any series of Preferred Shares
which may at the time be outstanding, the number of Trustees may be increased or
decreased from time to time by the Trustees. Subject to the provisions of
Section 2.3, each Trustee shall hold office for one year and until the election
and qualification of his successor. At each Annual Meeting of Shareholders, the
Shareholders entitled to vote for the election of Trustees shall elect Trustees
to serve until the next Annual Meeting of Shareholders. There shall be no
cumulative voting in the election of Trustees. Trustees may be reelected. A
Trustee shall be an individual at least 21 years of age who is not under legal
disability. Such individual shall qualify as a Trustee when he has either
signed this Declaration or agreed in writing to be bound by it. Unless
otherwise required by law, no Trustee shall be required to give bond, surety or
security in any jurisdiction for the performance of any duties or obligations
hereunder. The Trustees in their capacity as Trustees shall not be required to
devote their entire time to the business and affairs of the Trust.
2.2 COMPENSATION AND OTHER REMUNERATION. The Trustees shall be entitled
to receive such reasonable compensation for their services as Trustees as they
may determine from time to time. The Trustees shall also be entitled to
receive, directly or indirectly, remuneration for services rendered to the Trust
in any other capacity, including, without limitation, services as an officer of
the Trust, legal, accounting or other professional services, or services as a
transfer agent, or underwriter, or otherwise. The Trustees shall be reimbursed
for their reasonable expenses incurred in connection with their services as
Trustees. Notwithstanding the foregoing, except as provided in Article 7, no
Trustee shall receive any fee or other remuneration, directly or indirectly, as
a result of any sale of property to or purchase of property from the Trust.
2.3 RESIGNATION, REMOVAL AND DEATH OF TRUSTEES. A Trustee may resign at
any time by giving written notice to the remaining Trustees at the principal
office of the Trust. Such resignation shall take effect on the date such notice
is given or at any later time specified in the notice without need for prior
accounting. A Trustee may be removed at any time with or without cause by a
vote or consent of holders of two-thirds of the outstanding Shares entitled to
vote thereon or with cause by two-thirds of the Trustees in office. Upon the
resignation or removal of any Trustee, or his otherwise ceasing to be a Trustee,
he shall execute and deliver such documents as the remaining Trustees shall
require for the conveyance of any Trust property held in his name, shall account
to the remaining Trustee or Trustees as they require for all property which he
holds as Trustee and shall thereupon be discharged as Trustee. Upon the
incapacity or death of any Trustee, his legal representative shall perform the
acts set forth in the preceding sentence and the discharge mentioned therein
shall run to such legal representative and to the incapacitated Trustee or the
estate of the deceased Trustee as the case may be. Notwithstanding failure of
any Trustee or his legal representative to execute and deliver documents and to
render an accounting as
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aforesaid, said Trustee shall cease to hold legal title to the Trust Estate as
of the time of his resignation, removal, incapacity, death or his otherwise
ceasing to be a Trustee.
2.4 VACANCIES. If any or all of the Trustees cease to be Trustees
hereunder, whether by reason of resignation, removal, incapacity, death or
otherwise, such event shall not terminate the Trust or affect its continuity.
Until vacancies are filled, the remaining Trustee or Trustees (even though less
than three) may exercise the powers of the Trustees hereunder. Except as may
otherwise be required by the provisions of any series of Preferred Shares then
outstanding, vacancies (including vacancies created by increases in the number
of Trustees) may be filled by the remaining Trustee or by a majority of the
remaining Trustees even though less than a quorum. If at any time there shall
be no Trustees in office, successor Trustees shall be elected by the
Shareholders entitled to vote as provided in Section 6.9.
2.5 SUCCESSOR AND ADDITIONAL TRUSTEES. The right, title and interest of
the Trustees in and to the Trust Estate shall also vest in successor and
additional Trustees upon their qualification, and they shall thereupon have all
the rights and obligations of Trustees hereunder. Such right, title and
interest shall vest in the Trustees whether or not conveyancing documents have
been executed and delivered pursuant to Section 2.3 or otherwise.
2.6 ACTION BY TRUSTEES. A quorum for all meetings of the Trustees shall
be a majority of the Trustees. Unless specifically provided otherwise in this
Declaration or in the provisions of any series of Preferred Shares then
outstanding, any action of the Trustees may be taken at a meeting by vote of a
majority of the Trustees present at such meeting if a quorum is present, or
without a meeting by unanimous written consent of the Trustees. The Trustees
may participate in meetings by means of conference telephone or similar means of
communications equipment. Any agreement, deed, mortgage, lease or other
instrument or writing executed by any one or more of the Trustees or by any one
or more authorized persons shall be valid and binding upon the Trustees and upon
the Trust when authorized by action of the Trustees or as provided in the
By-Laws.
2.7 NON-AFFILIATED TRUSTEES. In order that a majority of the Trustees
shall at all times be Persons who are not Affiliates of the Adviser, if at any
time, by reason of one or more vacancies, there shall not be such a majority,
then within 60 days after such vacancy occurs, the continuing Trustee or
Trustees then in office shall appoint, pursuant to Section 2.4, a sufficient
number of other Persons who are not such Affiliates so that there shall be such
a majority.
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ARTICLE 3
TRUSTEES' POWERS
3.1 POWER AND AUTHORITY OF TRUSTEES. The Trustees, subject only to the
specific limitations contained in this Declaration or in the provisions of any
series of Preferred Shares which may be outstanding, shall have, without further
or other authorization, and free from any power or control on the part of the
Shareholders, full, absolute and exclusive power, control and authority over the
Trust Estate and over the business and affairs of the Trust to the same extent
as if the Trustees were the sole owners thereof in their own right, and to do
all such acts and things as in their sole judgment and discretion are necessary
or incidental to, or desirable for, the carrying out of any of the purposes of
the Trust or conducting the business of the Trust. Any determination made in
good faith by the Trustees of the purposes of the Trust or the existence of any
power or authority hereunder shall be conclusive. In construing the provisions
of this Declaration, presumption shall be in favor of the grant of powers and
authority to the Trustees. The enumeration of any specific power or authority
herein shall not be construed as limiting the general powers or authority or any
other specified power or authority conferred herein upon the Trustees.
3.2 SPECIFIC POWERS AND AUTHORITIES. Subject only to the express
limitations contained in this Declaration or in the provisions of any series of
Preferred Shares which may be outstanding, and in addition to any powers and
authorities conferred by this Declaration or which the Trustees may have by
virtue of any present or future statute or rule of law, the Trustees without any
action or consent by the Shareholders shall have and may exercise at any time
and from time to time the following powers and authorities which may or may not
be exercised by them in their sole judgment and discretion and in such manner
and upon such terms and conditions as they may from time to time deem proper:
(1) To retain, invest and reinvest the capital or other funds of the
Trust and, for such consideration as they deem proper, to purchase or
otherwise acquire for cash or other property or through the issuance of
Shares or other Securities of the Trust and hold for investment real or
personal property of any kind, tangible or intangible, in entirety or in
participation, all without regard to whether any such property is
authorized by law for the investment of trust funds and to possess and
exercise all the rights, powers and privileges appertaining to the
ownership of the Trust Estate with respect thereto.
(2) To increase the capital of the Trust by the issuance of
additional Shares at such time or times and for such consideration as may
be deemed appropriate by the affirmative vote of a majority of the
Trustees, including a majority of the Trustees who are not Affiliates of
the Adviser.
(3) To sell, rent, lease, hire, exchange, release, partition, assign,
mortgage, pledge, hypothecate, grant security interests in, encumber,
negotiate, convey, transfer or otherwise dispose of or grant interests in
all or any portion of the Trust Estate by deeds, trust deeds, assignments,
bills of sale, transfers, leases, mortgages, financing statements, security
agreements and other instruments for any of such purposes.
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(4) To issue other Securities, which may be secured or unsecured and
may be subordinated to any indebtedness of the Trust and may be convertible
into Shares, all without vote of or other action by the Shareholders, to
such Persons for such cash, property or other consideration (including
Securities issued or created by, or interests in, any Person) at such time
or times and on such terms as may be deemed appropriate by the affirmative
vote of a majority of the Trustees, including a majority of the Trustees
who are not Affiliates of the Adviser, and to purchase or otherwise
acquire, hold, cancel, reissue, sell and transfer any of such Securities;
provided, however, that the Trust shall not (i) issue "redeemable
securities" as defined in Section 2(a)(32) of the Investment Company Act of
1940; or (ii) issue Long Term Debt unless the historical cash flow of the
Trust or the estimated future cash flow of the Trust excluding
extraordinary non-recurring items, is sufficient to cover interest payments
on such debt securities.
(5) To issue Share Purchase Warrants ("Warrants") which entitle the
holders thereof to subscribe for Preferred or Common Shares (which Shares
shall be reserved at the time of issuance of such Warrants by the Trustees
for issuance upon exercise of such Warrants) at such time or times and on
such terms as the Trustees may prescribe. Warrants may be issued to such
Persons and for such consideration as the Trustees may from time to time
determine, and may be issued in detachable or nondetachable form in
conjunction with the issuance of debt securities or as an inducement to
those acquiring or underwriting Securities of the Trust, and may be
redeemable at the option of the Trust. Warrants shall be evidenced by
certificates in such from as the Trustees may approve.
(6) To enter into leases, indentures, contracts, obligations, and
other agreements for a term extending beyond the term of office of the
Trustees and beyond the possible termination of the Trust or for a lesser
term.
(7) To borrow money, incur indebtedness and issue Securities of the
Trust therefor; to guarantee, indemnify or act as surety with respect to
payment or performance of obligations of third parties; to enter into other
obligations on behalf of the Trust; and to assign, convey, transfer,
mortgage, subordinate, pledge, grant security interests in, encumber or
hypothecate the Trust Estate to secure any of the foregoing; provided,
however, that in no event shall the Trust incur Long Term Debt if after
giving effect thereto the total amount of Long Term Debt would exceed 400%
of Net Assets or incur any Short Term Borrowings if after giving effect
thereto the total amount of Short Term Borrowings would exceed 400% of Net
Assets and provided further that the aggregate Long Term Debt and Short
Term Borrowings shall not exceed 500% of Net Assets prior to December 31,
1972. Compliance with the provisions of the foregoing proviso shall be
determined on the basis of the latest available balance sheet of the Trust
(which shall be as of a date not more than 90 days prior to the date of
incurring such Indebtedness) adjusted on a pro forma basis to give effect
to the incurring of such Indebtedness.
(8) To lend money, whether secured or unsecured.
(9) To create reserve funds for any purpose.
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(10) To incur and pay out of the Trust Estate any charges or
expenses, and disburse any funds of the Trust, which charges, expenses or
disbursements are, in the opinion of the Trustees, necessary or incidental
to or desirable for the carrying out of any of the purposes of the Trust or
conducting the business of the Trust, including without limitation taxes
and other governmental levies, charges and assessments, of whatever kind or
nature, imposed upon or against the Trustees in connection with the Trust
or the Trust Estate or upon or against the Trust Estate or any part thereof
and for any of the purposes herein.
(11) To deposit funds of the Trust in banks, trust companies, savings
and loan associations and other depositories, including the Bank, whether
or not such deposits will draw interest, the same to be subject to
withdrawal on such terms and in such manner and by such Person or Persons
(including any one or more Trustees, officers, agents or representatives)
as the Trustees may determine.
(12) To possess and exercise all the rights, powers and privileges
appertaining to the ownership of any or all Mortgages or Securities issued
or created by, or interests in, any Person, forming part of the Trust
Estate, to the same extent that an individual might, and, without limiting
the generality of the foregoing, to vote or give any consent, request or
notice, or waive any notice, either in person or by proxy or power of
attorney, with or without power of substitution, to one or more Persons,
which proxies and powers of attorney may be for meetings or action
generally or for any particular meeting or action, and may include the
exercise of discretionary powers.
(13) After approval by the holders of two-thirds of the outstanding
Shares entitled to vote, by vote of two-thirds of the Trustees, to cause a
corporation or other entity to be organized under the laws of Maryland or
any other jurisdiction and transfer the assets of the Trust to it in
exchange for its shares or other Securities (which Securities shall then be
distributed to the Shareholders) and terminate the Trust; provided that,
such new corporation or entity and its shareholders would then be entitled
to federal income tax treatment substantially equal to that enjoyed by a
qualified real estate investment trust and its shareholders, and the
resulting investment received by Preferred or Common Shareholders would be
substantially equal in quality and substantially the same in type as an
investment in the Preferred or Common Shares of the Trust, as the case may
be.
(14) To enter into joint ventures, general or limited partnerships
and any other lawful combinations or associations.
(15) To elect, appoint, engage or employ officers for the Trust, who
may be removed or discharged at the discretion of the Trustees, such
officers to have such titles, powers and duties, and to serve such terms,
as may be prescribed by the Trustees or by the By-Laws; subject to the
provisions of Sections 7.5 and 7.6, to engage or employ any Persons as
agents, representatives, employees, or independent contractors (including
without limitation real estate advisers, investment advisers, transfer
agents, registrars, underwriters, accountants, attorneys at law, real
estate agents, managers, appraisers, brokers, architects, engineers,
construction managers, general
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contractors or otherwise) in one or more capacities, and to pay
compensation from the Trust for services in as many capacities as such
Person may be so engaged or employed; and, except as prohibited by law, to
delegate any of the powers and duties of the Trustees to any one or more
Trustees, agents, representatives, officers, employees, independent
contractors or other Persons except as provided in Article 4 hereof,
provided, however, that no such delegation shall be made to an Affiliate of
the Adviser except with the approval of a majority of the Trustees who are
not Affiliates of the Adviser.
(16) To appoint from among the Trustees an executive committee and
other committees composed of two or more Trustees, and to delegate to such
committees, in the intervals between meetings of the Trustees, any or all
of the powers of the Trustees in the management of the business and affairs
of the Trust, except the power to declare dividends, issue Shares or
recommend to Shareholders any action requiring Shareholders' approval.
(17) To determine from time to time the value of all or any part of
the Trust Estate and of any services, Securities, property or other
consideration to be furnished to or acquired by the Trust, and from time to
time to revalue all or any part of the Trust Estate in accordance with such
appraisals or other information as the Trustees, in their sole judgment,
may deem necessary.
(18) To collect, sue for, and receive all sums of money coming due to
the Trust, and to engage in, intervene in, prosecute, join, defend,
compound, compromise, abandon or adjust, by arbitration or otherwise, any
actions, suits, proceedings, disputes, claims, controversies, demands or
other litigation relating to the Trust, the Trust Estate or the Trust's
affairs, to enter into agreements therefor, whether or not any suit is
commenced or claim accrued or asserted and, in advance of any controversy,
to enter into agreements regarding arbitration, adjudication or settlement
thereof.
(19) To renew, modify, release, compromise, extend, consolidate, or
cancel, in whole or in part, any obligation to or of the Trust.
(20) To extend, renew or reissue outstanding rights, warrants or
options to purchase Shares of the Trust.
(21) To purchase and pay for out of the Trust Estate insurance
contracts and policies insuring the Trust Estate against any and all risks
and insuring the Trust, the Trustees, the Shareholders or the officers of
the Trust, or any or all of them, against any and all claims and
liabilities of every nature asserted by any Person arising by reason of any
action alleged to have been taken or omitted by the Trust or by the
Trustees, Shareholders, or officers.
(22) To cause legal title to any of the Trust Estate to be held by or
in the name of the Trustees or, except as prohibited by law, by or in the
name of the Trust or one or more of the Trustees or any other Person, on
such terms, in such manner, with such powers in such Person as the Trustees
may determine, and with or without disclosure that the Trust or Trustees
are interested therein.
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(23) To adopt a fiscal year for the Trust, and from time to time to
change such fiscal year.
(24) To adopt and use a seal (but the use of a seal shall not be
required for the execution of instruments or obligations of the Trust).
(25) To file any and all documents and take any and all such other
action as the Trustees, in their sole judgment, may deem necessary in order
that the Trust may lawfully conduct its business in any jurisdiction.
(26) To change the name of the Trust.
(27) To adopt a plan for reinvestment by Shareholders of
distributions of the Trust containing provision for the sale of Shares by
the Trust at book value in the event market value is higher and such other
provisions as the Trustees may determine.
(28) To do all other such acts and things as are incident to the
foregoing, and to exercise all powers which are necessary or useful to
carry on the business of the Trust, to promote and attain any of the
purposes for which the Trust is formed, and to carry out the provisions of
this Declaration.
3.3 BY-LAWS. The Trustees may make, adopt, amend or repeal By-Laws
containing provisions relating to the government of the Trust, and the
administration of its affairs, including its rights or powers and the rights or
powers of its Shareholders, Trustees or officers not inconsistent with law or
with this Declaration or the provisions of any series of Preferred Shares which
may then be outstanding.
ARTICLE 4
ADVISORY AGREEMENT
4.1 EMPLOYMENT OF ADVISER. The Trustees are responsible for the general
policies of the Trust and for such general supervision of the business of the
Trust conducted by all officers, agents, employees, advisers, managers or
independent contractors of the Trust as may be necessary to insure that such
business conforms to the provisions of this Declaration. However, the Trustees
shall not be required personally to conduct the business of the Trust, and,
consistent with their ultimate responsibility as stated above, the Trustees
shall have the power to appoint, employ or contract with any Person or Persons
(including one or more of themselves or any Person in which one or more of them
may be directors, officers, shareholders, partners or trustees) as the Trustees
may deem necessary or proper for the transaction of the business of the Trust,
and for such purpose may grant or delegate such authority to any such Person as
the Trustees may in their sole discretion deem necessary or desirable without
regard to whether such authority is normally granted or delegated by Trustees;
provided, however, that any determination to employ or contract with the Adviser
or an Affiliate of a Trustee or the Adviser shall be valid only if made or
ratified with the approval of a majority of the Trustees who are not such
Affiliates.
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The Trustees shall have the power to determine the terms and compensation
of the Adviser or any other Person whom they may employ or with whom they may
contract. The Trustees may exercise broad discretion in allowing the Adviser to
administer and regulate the operations of the Trust, to act as agent for the
Trust, to execute documents on behalf of the Trustees, and to take action which
conforms to general policies and general principles previously established by
the Trustees.
4.2 TERM. The Trustees shall not enter into any contract with an Adviser
unless such contract has an initial term of not more than two years and provides
that it may be terminated by the Trust on not more than 60 days notice by the
affirmative vote of a majority of the Trustees who are not Affiliates of the
Adviser.
4.3 NO RESTRICTIONS ON ADVISER. Nothing contained in this Declaration
shall limit or restrict the right of any director, officer, employee or
shareholder of the Adviser, whether or not also a Trustee, officer or employee
of the Trust, to engage in any other business or to render services of any kind
to any other Person.
4.4 DUTIES OF ADVISER. The Adviser shall: (i) administer the Trust's
day-to-day investment operations; (ii) serve as the Trust's investment adviser
and consultant on policy decisions to be made by the Trustees; (iii) present to
the Trust opportunities for investment within the Trust's investment policies;
(iv) investigate, select and recommend to the Trustees, and conduct relations
with, accountants, mortgage loan originators and correspondents, lenders,
builders, developers and others as necessary in connection with the Trust's
mortgage and other investments, and enter into appropriate contracts with such
persons in its own name or the Trust's; and (v) generally take such other action
as the Trustees may request in connection with the conduct of the business of
the Trust.
4.5 AGREEMENT WITH AFFILIATE OF ADVISER. In the event that the Adviser
shall be an Affiliate of a Person engaged in the mortgage banking business, the
employment of the Adviser by the Trust shall be conditioned upon an undertaking
by such Affiliate that such Affiliate shall consult with the Adviser and present
to the Adviser, for presentation to the Trust, opportunities to acquire mortgage
loans and other investments which are consistent with the investment policies of
the Trust and which are generally representative of comparable investments of
similar quality being made or placed by such Affiliate with other institutional
investors and shall furnish the Adviser and the Trust with information as to any
investments within the Trust's investment policies made or placed by such
Affiliate with other institutions. The Trust may also enter into agreements
with Affiliates of the Adviser for servicing any or all of the Trust's loans or
for any other purposes, subject to the provisions of Section 7.6 hereof.
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ARTICLE 5
INVESTMENT POLICY
5.1 GENERAL STATEMENT OF POLICY. It is the general investment policy of
the Trust to invest in long term investments consisting principally of permanent
First Mortgage loans, Junior and wrap-around Mortgage loans, net lease
financings, sale leaseback transactions, leasehold Mortgage loans and ownership
or other interests in Real Property or in Persons involved in owning, operating,
leasing, developing, financing or dealing in Real Property, which investments
shall ordinarily be made in connection with properties having proven or
projected income-producing capabilities and in short term and intermediate term
Mortgage loans, warehouse loans, and installment contracts. The Trustees may
make commitments to make investments consistent with the foregoing policies and
may also participate in investments with other investors on the same or
different terms, including investors to whom the Adviser may also act as
adviser. The Trustees shall endeavor to invest the Trust's assets in accordance
with the investment policies set forth in this Article 5, but the failure so to
invest its assets shall not affect the validity of any investment made or action
taken by the Trustees.
5.2 REIT PROVISIONS OF THE INTERNAL REVENUE CODE. The Trustees intend at
all times to make investments in such a manner as to comply with the
requirements of the REIT Provisions of the Internal Revenue Code with respect to
the composition of the Trust's investments and the derivation of its income;
provided, however, that no Trustee, officer, employee, agent, investment adviser
or independent contractor of the Trust shall be liable for any act or omission
resulting in the loss of tax benefits under the Internal Revenue Code, except as
provided in Section 7.1 hereof.
5.3 ADDITIONAL INVESTMENTS. The Trustees may also invest the Trust Estate
in the ownership of or participations in the ownership of:
(1) Shares of other real estate investment trusts to the extent
permitted by the REIT Provisions of the Internal Revenue Code and which do
not hold investments or engage in the activities prohibited by Section 5.5;
(2) Securities, including but not limited to convertible or
subordinated bonds, other than those referred to in Section 5.4; and
(3) Office and other equipment leased to tenants of Real Property
owned by the Trust or subject to the lien of a Mortgage securing a Mortgage
loan owned by the Trust, if the Trustees in good faith determine that the
making of such investments will not disqualify the Trust as a real estate
investment trust under the REIT Provisions of the Internal Revenue Code.
5.4 OTHER PERMISSIBLE INVESTMENTS. To the extent that the Trust has
assets not invested in accordance with the foregoing Sections of this Article 5,
the Trustees may employ such assets by investing them in:
(1) Obligations of the United States Government or agencies thereof;
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(2) Obligations of any state or territory of the United States of
America or any political subdivision thereof or any agencies of any
thereof;
(3) Evidences of deposits in or obligations of banking institutions
and savings institutions which are members of the Federal Deposit Insurance
Corporation or of the Federal Home Loan Bank System;
(4) Commercial paper; and
(5) Financial futures, forward and standby contracts for the deferred
or future delivery of the obligations and securities described in
Subsections (1) through (4) of this Section 5.4.
5.5 PROHIBITED INVESTMENTS AND ACTIVITIES. The Trustees shall not engage
in any of the following investment practices or activities:
(1) Invest in any Mortgage loan (except those insured by the Federal
Housing Administration) if immediately thereafter and as a result thereof
any one borrower on any one project shall be obligated to the Trust, either
primarily or secondarily, in an amount exceeding 15% of Total Assets;
provided, however, that in the calculation of any obligor's obligation to
the Trust for the purpose of this limitation there shall not be included
any payments which any obligor may be required to make to the Trust on
account of senior Mortgages held by other creditors in connection with
wrap-around loans made by the Trust;
(2) Purchase (which shall not be deemed to include the receipt of
equity interests in connection with loans made by the Trust) Real Property
at a price in excess of its Appraised Value determined by a disinterested
independent appraiser as of a date not more than 90 days prior to the date
of such purchase;
(3) Invest more than 10% of the Total Assets of the Trust Estate in
the ownership of, participation in the ownership of, or loans on,
unimproved non-income-producing Real Property, other than Real Property
which is expected to be improved within a reasonable period of time;
(4) Make warehousing loans secured by the pledge of First Mortgage
loans to the Adviser or any Affiliate of the Adviser;
(5) Invest in commodities, bullion or chattels except such chattels
as are required in the day-to-day business of the Trust or in connection
with its Mortgage loans or Real Property;
(6) Invest in any contracts for the sale of real estate; provided,
however, that nothing herein shall prevent the holding of contracts of sale
as additional security for Mortgage loans made by the Trust and the
ownership of such contracts of sale upon the foreclosure of or realization
upon such security interests;
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(7) Engage in any short sale, except that the Trustees may purchase
or sell financial futures, forward and standby contracts for the deferred
or future delivery of the obligations and securities described in Section
5.4;
(8) Engage in trading as compared with investment activities or
engage in underwriting or agency distribution of securities issued by
others, but this prohibition shall not prevent the Trustees from selling
participations in Mortgage loans or interests in Real Property or from
purchasing or selling financial futures, forward and standby contracts as
permitted in Section 5.4(5) and 5.5(7);
(9) Invest in any Real Property which is subject to a Mortgage to any
person other than a bank, insurance company, pension fund, other
institutional lender, or corporation or trust engaged in the business of
mortgage investments except in the case of a purchase money Mortgage;
(10) Hold property primarily for sale to customers in the ordinary
course of the trade or business of the Trust, but this prohibition shall
not be construed to deprive the Trust of the power to sell any property
which it owns at any time;
(11) Invest in companies for the purpose of exercising control or
management, but freedom of action is reserved with respect to exercise of
voting rights in respect of securities in the portfolio of the Trust;
(12) Invest in equity securities (except equity securities related to
long term mortgage loans made by the Trust or leases of real property owned
by the Trust) issued by any Person which to the actual knowledge of the
Trustees is holding investments or engaging in activities prohibited to the
Trust, if, after giving effect to the investment, the aggregate amount of
such investment exceeds 5% of Total Assets.
Compliance with the provisions of paragraphs (1) and (4) shall be determined on
the basis of the latest available balance sheet of the Trust (which need not be
audited but which shall be as of a date not more than 90 days prior to the date
of making such investment) adjusted on a pro forma basis to give effect to the
making of such investment.
5.6 ADDITIONAL LIMITATIONS. The By-Laws may contain additional
limitations on the investments of the Trust, which limitations may be changed
from time to time by amendment of the By-Laws as provided therein.
5.7 OBLIGOR'S DEFAULT. Notwithstanding any provision in any Article of
this Declaration, when an obligor to the Trust is in default under the terms of
any obligation to the Trust, the Trustees shall have the power to pursue any
remedies permitted by law which in their sole judgment are in the interest of
the Trust and the Trustees shall have the power to enter into any necessary
investment, commitment, or obligation of the Trust resulting from the pursuit of
such remedies or necessary or desirable to dispose of property acquired in the
pursuit of such remedies.
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ARTICLE 6
THE SHARES AND SHAREHOLDERS
6.1 SHARES.
(1) The units into which the beneficial interests in the Trust will be
divided shall be designated as Shares, which Shares shall be of two
classes, one of which shall be designated Common Shares and one of which
shall be designated Preferred Shares. All such Shares shall have a par
value of $1.00 per share. The certificates evidencing the Shares shall
specify the class and series of such Shares and shall be in such form and
signed (manually or by facsimile) on behalf of the Trust in such a manner
as the Trustees may from time to time prescribe or as may be prescribed in
the By-Laws. The certificates shall be negotiable and title thereto and to
the Shares represented thereby shall be transferable by assignment and
delivery thereof, subject, however, to the provisions of Section 6.15. The
number of Common Shares which may be issued is limited to 20,000,000 and
the number of Preferred Shares which may be issued is limited to 3,500,000.
The Shares may be issued for such consideration as the Trustees shall
determine or by way of share dividend or share split in the discretion of
the Trustees; provided, however, that except in the case of a share
dividend or share split, the Shares shall be issued for a consideration of
at least $1.00 value per share. The Shares shall be held by at least 100
Persons. Shares reacquired by the Trust shall no longer be deemed
outstanding and shall have no voting or other rights unless and until
reissued. Shares reacquired by the Trust may be cancelled by action of the
Trustees. All Shares shall be fully paid and nonassessable by or on behalf
of the Trust upon receipt of full consideration for which they have been
issued or without additional consideration if issued by way of share
dividend or share split.
(2) Upon the Effective Date (as hereinafter defined in Section 6.14),
every 33.33 Shares of outstanding Common Shares shall be automatically
reclassified, changed and converted into 1 share of Common Shares and the
authorized number of Common Shares will be limited to 20,000,000. No fractional
shares of Common Shares shall be issued upon such conversion, but in lieu
thereof, fractions of 1/2 or greater shall be rounded to the next greater whole
number and fractions of less than 1/2 shall be rounded to the next lower whole
number. No consideration will be paid in respect of such fractional interests
that are rounded down. Unless otherwise required or requested by the holders
thereof, the share certificates representing the Common Shares outstanding prior
to the Effective Date shall represent such Common Shares as reclassified,
changed and converted following the Effective Date.
6.2 COMMON SHARES. All of the Common Shares shall be of the same class
and shall have equal voting, dividend or distribution, liquidation and other
rights. Subject to the provisions of any series of Preferred Shares which may
at the time be outstanding, the holders of Common Shares shall be entitled to
receive, when and as declared by the Trustees out of any funds legally available
for the purpose, such dividends or distributions as may be declared from time to
time by the Trustees in accordance with Section 6.7. In the event of the
termination of the Trust pursuant to Section 12.3, or upon the distribution of
its assets, after the payment in full or the setting apart for payment of such
preferential amounts, if any, as the holders of
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Preferred Shares at the time outstanding shall be entitled, the remaining assets
of the Trust available for payment and distribution to Shareholders shall,
subject to any participating or similar rights of Preferred Shares at the time
outstanding, be distributed ratably among the holders of Common Shares at the
time outstanding in accordance with Section 8.2. Common Shares shall not
entitle the holder to preference, conversion, exchange or preemptive rights of
any kind.
6.3 PREFERRED SHARES. The Trustees shall have power by resolution or
resolutions, to the extent not inconsistent with the provisions of this
Declaration, to divide and issue Preferred Shares in series, to fix the number
of Preferred Shares constituting any such series and to set or change the
preferences, conversion or other rights, voting powers, restrictions, including
restrictions on transferability, limitations as to dividends, qualifications or
terms or conditions of redemption of such Preferred Shares or any series
thereof. The Trustees shall have power, unless otherwise provided in such
resolution or resolutions as may be adopted pursuant to this Section 6.3 and to
the extent not inconsistent with the provisions of this Declaration, to increase
or decrease by resolution (but not below the number of Preferred Shares thereof
then outstanding) the number of Preferred Shares of any series subsequent to the
issue of Preferred Shares of that series. Except as provided by the provisions
of a series of Preferred Shares, Preferred Shares of that series shall not
entitle the holder to preference, conversion, exchange or preemptive rights of
any kind. Before the Trust issues any Preferred Shares or any series thereof,
or sets or changes the preferences, conversion or other rights, voting powers,
restrictions, including restrictions on transferability, limitations as to
dividends, qualifications or terms or conditions of redemption with respect to
Preferred Shares or any series thereof, the Trustees shall file Articles
Supplementary for record with the Department of Assessments and Taxation of the
State of Maryland which shall set forth a description of the Preferred Shares or
series thereof including the preferences, conversion and other rights, voting
powers, restrictions, including restrictions on transferability, limitations as
to dividends, qualifications and terms and conditions of redemption, as set or
changed by the Trustees and which shall state that such Preferred Shares or
series thereof have been classified or reclassified under the authority
contained in this Declaration of Trust.
6.4 LEGAL OWNERSHIP OF TRUST ESTATE. The legal ownership of the Trust
Estate and the right to conduct the business of the Trust are vested exclusively
in the Trustees, and the Shareholders shall have no interest therein other than
the beneficial interest in the Trust conferred by their Shares issued hereunder
and, subject to the provisions of Section 8.2, they shall have no right to
compel any partition, division, dividend or distribution of the Trust or any of
the Trust Estate.
6.5 SHARES DEEMED PERSONAL PROPERTY. The Shares shall be personal
property. The Common Shares shall confer upon the holders thereof only the
interest and rights specifically set forth in this Declaration. The Preferred
Shares shall confer upon the holders thereof only the interest and rights
specifically set forth in this Declaration and in the resolution or resolutions
adopted by the Trustees pursuant to Section 6.3. The death, insolvency or
incapacity of a Shareholder shall not dissolve or terminate the Trust or affect
its continuity nor give his legal representative any rights whatsoever, whether
against or in respect of other Shareholders, the Trustees or the Trust Estate or
otherwise except the sole right to demand and, subject to the provisions of this
Declaration, the By-Laws and any requirements of law, to receive a
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new certificate for Shares registered in the name of such legal representative,
in exchange for the certificate held by such Shareholder.
6.6 SHARE RECORD; ISSUANCE AND TRANSFERABILITY OF SHARES. Records shall
be kept by or on behalf of and under the direction of the Trustees, which shall
contain the names and addresses of the Shareholders, the class, series and
number of Shares held by them respectively, and the numbers of the certificates
representing the Shares, and in which there shall be recorded all transfers of
Shares. The Persons in whose names certificates are registered on the records
of the Trust shall be deemed the absolute owners of the Shares represented
thereby for all purposes of this Trust; but nothing herein shall be deemed to
preclude the Trustees or officers, or their agents or representatives, from
inquiring as to the actual ownership of Shares. Until a transfer is duly
registered on the records of the Trust, the Trustees shall not be affected by
any notice of such transfer, either actual or constructive. The payment thereof
to the Person in whose name any Shares are registered on the records of the
Trust or to the duly authorized agent of such Person (or if such Shares are so
registered in the names of more than one Person, to any one of such Persons or
to the duly authorized agent of such Person), shall be a sufficient discharge
for all dividends or distributions payable or deliverable in respect of such
Shares and from all liability to see to the application thereof. The By-Laws
may provide for the regulation of the transfer of Share certificates and the
Shares represented thereby.
6.7 DIVIDENDS OR DISTRIBUTIONS TO SHAREHOLDERS. The Trustees may from
time to time declare and pay to holders of Preferred and Common Shares such
dividends or distributions in cash or other property, out of current or
accumulated income, capital, capital gains, principal, surplus, proceeds from
the increase or refinancing of Trust obligations, or from the sale of portions
of the Trust Estate or from any other source as the Trustees in their discretion
shall determine, subject to the provisions of any series of Preferred Shares
which may at the time be outstanding. Holders of Preferred and Common Shares
shall have no right to any dividend or distribution unless and until declared by
the Trustees. The Trustees shall furnish the holders of Preferred and Common
Shares at the time of each such distribution with a statement in writing
advising as to the source of the funds so distributed or that the source thereof
has not then been determined, in which event a statement in writing as to such
source shall be sent to each Shareholder who received the distribution not later
than 90 days after the close of the fiscal year in which the distribution was
made.
6.8 TRANSFER AGENT, DIVIDEND DISBURSING AGENT AND REGISTRAR. The Trustees
shall have power to employ one or more transfer agents, dividend disbursing
agents and registrars and to authorize them on behalf of the Trust to keep
records, to hold and disburse any dividends and distributions, and to have and
perform in respect of all original issues and transfers of Shares, dividends and
distributions and reports and communications to Shareholders, such powers and
duties customarily had and performed by transfer agents, dividend disbursing
agents and registrars as may be conferred upon them by the Trustees.
6.9 SHAREHOLDERS' MEETINGS. There shall be an annual meeting of the
Shareholders at such time and at such convenient place within or without the
State of Maryland as provided in or pursuant to the By-Laws at which Trustees
shall be elected and any other proper business may be conducted. The Annual
Meeting of Shareholders shall be held after delivery to the Shareholders of the
report specified in
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Section 6.11 and within six months after the end of each fiscal year. Special
meetings of Shareholders may be called by the Trustees and such other Persons as
shall be provided in the By-Laws and shall be called upon the written request of
Shareholders holding not less than 25% of the outstanding Shares of the Trust
entitled to vote, in the manner provided in or pursuant to the By-Laws. If
there shall be no Trustees, a special meeting of the Shareholders shall be held
promptly for the election of successor Trustees. Notice of any special meeting
shall state the purposes of the meeting. At each Shareholders' meeting each
Shareholder of record of a Common Share shall be entitled to one vote for each
Common Share standing in his name on the books of the Trust. The holders of
Preferred Shares of any series shall be entitled to vote upon any matter at any
Shareholders' meeting only to the extent specified in the resolution or
resolutions providing for such series adopted by the Trustees. A majority of
the outstanding Shares entitled to vote at any meeting represented in person or
by proxy shall constitute a quorum at such meeting. The vote or consent of the
holders of two-thirds of the outstanding Shares entitled to vote shall be
required to approve the nature and amount of the consideration and the other
principal terms of any transaction involving the sale, lease, exchange or other
disposition of substantially all of the Trust Estate as a whole. Whenever
Shareholders are required or permitted to take any action, such action may be
taken, except as otherwise provided by this Declaration or the provisions of any
series of Preferred Shares which may be outstanding or required by law, by a
majority of the votes cast at a meeting of Shareholders at which a quorum is
present by holders of Shares entitled to vote thereon, or without a meeting by
written consent setting forth the action so taken signed by the holders of a
majority of the outstanding Shares entitled to vote thereon or such larger
proportion thereof as would be required for a vote of Shareholders at a meeting.
Written notice of any action taken by written consent shall be given all
Shareholders who have not signed such consent at least ten days prior to the
effective date of such action. The vote or consent of Shareholders shall not be
required for the pledging, hypothecating, granting security interests in,
mortgaging, or encumbering of all or any of the Trust Estate, or for the sale,
lease, exchange or other disposition of less than substantially all of the Trust
Estate as a whole.
6.10 PROXIES. Whenever the vote or consent of Shareholders is required or
permitted under this Declaration, such vote or consent may be given either
directly by the Shareholder or by a proxy in the form provided in or pursuant to
the By-Laws. The Trustees may solicit such proxies from the Shareholders or any
of them in any matter requiring or permitting the Shareholders' vote or consent.
6.11 REPORTS TO SHAREHOLDERS.
(1) Not later than 120 days after the close of each fiscal year of
the Trust, the Trustees shall mail a report of the business and operation
of the Trust during such fiscal year to the Shareholders, which report
shall constitute the accounting of the Trustees for such fiscal year. The
report shall be in such form and have such content as the Trustees deem
proper. Each Annual Report shall include a balance sheet and statement of
surplus of the Trust as of the close of the preceding fiscal year and a
statement of income of the Trust for such preceding fiscal year together
with a comparable statement of income for the preceding fiscal year. Such
financial statements shall be accompanied by a report of an independent
certified public accountant. A manually signed copy of the accountant's
report shall be filed with the Trustees.
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(2) Within 90 days after the close of each of the first three
quarters of each fiscal year, the Trustees shall send interim reports
containing summary financial statements (which may be unaudited) to the
Shareholders, having such form and content as the Trustees deem proper.
6.12 FIXING RECORD DATE. The By-Laws may provide for fixing or, in the
absence of such provision, the Trustees may fix, in advance, a date as the
record date for determining the Shareholders entitled to notice of or to vote at
any meeting of Shareholders or to express consent to any proposal without a
meeting, or for the purpose of determining Shareholders entitled to receive
payment of any dividend or distribution (whether before or after a termination
of the Trust) or any report or other communication from the Trustees; or for any
other purpose. The record date so fixed shall be not less than ten days nor
more than 60 days prior to the date of the meeting or event for the purposes of
which it is fixed.
6.13 NOTICE TO SHAREHOLDERS. Any notice of meeting or other notice,
communication or report to any Shareholders shall be deemed duly delivered to
such Shareholder when such notice, communication or report is deposited, with
postage thereon prepaid, in the United States mail, addressed to such
Shareholder at his address as it appears on the records of the Trust or is
delivered in person to such Shareholder.
6.14 RESTRICTIONS ON TRANSFER TO PRESERVE TAX BENEFIT; DESIGNATION OF
SHARES-IN-TRUST.
(1) DEFINITIONS. For the purposes of this Declaration of Trust, the
following terms shall have the following meanings:
"Beneficial Ownership" shall mean ownership of Capital Stock, either
directly or constructively, through the application of Section 544 of the
Code, as modified by Section 856(h)(1)(B) and Section 856(h)(3) of the
Code. The terms "Beneficial Owner," "Beneficially Owns," and "Beneficially
Owned" shall have the correlative meanings.
"Beneficiary" shall mean, with respect to any Special Trust, one or
more organizations described in each of Section 170(b)(1)(A) (other than
clauses (vii) and (viii) thereof) and Section 170(c)(2) of the Code which
are named by the Special Trustee as the beneficiary or beneficiaries of
such Special Trust, in accordance with the provisions of Section 6.16(l),
provided that the selection of such beneficiary or beneficiaries would not
cause any of the restrictions set forth in Section 6.14(2) to be violated.
"Capital Stock" shall mean Common Shares or Preferred Shares and shall
include all Preferred Shares or Common Shares that are held as Shares-in-
Trust in accordance with the provisions of Section 6.16(l).
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time, or any successor thereto.
"Constructive Ownership" shall mean ownership, either directly or
constructively, through the application of Section 318 of the code, as
modified by Section 856(d)(5) of the Code. The terms "Constructive
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Owner," "Constructively Owns," and "Constructively Owned" shall have the
correlative meanings.
"Constructive Ownership Limit" shall mean 9.9% of the value of the
outstanding Capital Stock of the Trust.
"Effective Date" shall mean the "Effective Date" as defined in the
Plan of Reorganization of Mortgage and Realty Trust under Chapter 11 of the
Bankruptcy Code, as filed with the United States Bankruptcy Court for the
Central District of California during the Company's fiscal year ended
September 30, 1995, as the same may be amended from time to time.
"Equity Shares" shall mean either Common Shares or Preferred Shares
that are not held as Shares-in-Trust in accordance with the provisions of
Section 6.16(l).
"Existing Constructive Holder" shall mean any Person that is an
Existing Holder.
"Existing Holder" shall mean (i) Heine Securities Corporation, and any
entity for which it may hold shares of Capital Stock as agent, including
without limitation, Mutual Series Fund, Inc., Broadway Ventures, Mutual
Beacon Fund, Mutual Discovery Fund, The Common Fund, Orion Fund Ltd. and
any entity for which any of the foregoing may hold shares of Capital Stock
as agent (collectively, the "Mutual Group"), (ii) Fidelity Management &
Research Company, any entity for which it may hold shares of Capital Stock
as agent, including without limitation, Fidelity Capital & Income Fund,
Inc. and Belmont Capital Partners II, L.P. and any entity for which any of
the foregoing may hold shares of Capital Stock as agent (collectively, the
"Fidelity Group"), (iii) Angelo Gordon & Co., L.P., any entity for which it
may hold shares of Capital Stock as agent, including without limitation,
GAM Arbitrage Investments, Inc., GAM Special Situations, L.P., AG Arb
Partners, L.P., AG Eleven Partners, L.P., Common Fund 103-70700-2-8, Common
Fund 103-70600-2-9, A.G.C.P., L.P., 40153 Partnership, 40154 Partnership,
Montrose Corporation, AG Super Fund, L.P., AG Super Fund International
Partners, L.P., Treetop Partners, L.P., and Nutmeg Partners, L.P., and any
entity for which any of the foregoing may hold shares of Capital Stock as
agent (collectively, the "Angelo Gordon Group") and (iv) Intermarket
Corporation and any entity for which it may hold shares of Capital Stock as
agent, including without limitation, Fernwood Associates, L.P., Fernwood
Restructuring Ltd., Fernwood Total Return Fund, L.P., Fernwood Total Return
Holdings, Ltd., and Fernwood Foundation Fund and any entity for which any
of the foregoing may hold shares of Capital Stock as agent (collectively,
the "Intermarket Group"). Each individual entity or other member of the
Mutual Group, Fidelity Group or Angelo Gordon Group together with
Intermarket Corporation shall be an Existing Holder.
"Existing Holder Limit" (i) for Belmont Capital Partners II, L.P.
initially shall mean the greater of the Ownership Limit and 15% of the
value of the outstanding Capital Stock of the Trust, (ii) for Fernwood
Associates, L.P. initially shall mean the greater of the Ownership Limit
and 15% of the value of the outstanding Capital Stock of the Trust,
(iii) for Fernwood
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Restructurings, Ltd. initially shall mean the greater of the Ownership
Limit and 15% of the value of the outstanding Capital Stock of the Trust,
(iv) for Fidelity Capital & Income Fund, Inc. initially shall mean the
greater of the Ownership Limit and 12% of the value of the outstanding
Capital Stock of the Trust, (v) for Mutual Beacon Fund initially shall mean
the greater of the Ownership Limit and 40% of the value of the outstanding
Capital Stock of the Trust, (vi) for Mutual Discovery Fund initially shall
mean the greater of the Ownership Limit and 12% of the value of the
outstanding Capital Stock of the Trust, and (vii) for any other member of
the Mutual Group, Fidelity Group, Angelo Gordon Group or Intermarket Group
initially shall mean 9.9% of the value of the outstanding Capital Stock of
the Trust; provided, however, that the Existing Holder Limit shall mean
100% of the outstanding Capital Stock of the Trust for any Existing Holder
for the period during which the Existing Holder is described in Section
6.14(11). From and after the Effective Date, the secretary of the Trust
shall maintain and, upon request, make available to each Existing Holder a
schedule which sets forth the then current Existing Holder Limits for each
Existing Holder.
"Existing Holder Shares" shall have the meaning assigned to such term
in Section 6.14(12).
"Market Price" on any date shall mean the average of the Closing Price
for the five consecutive Trading Days ending on such date. The "Closing
Price" on any date shall mean the last sale price, regular way, or, in case
no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed
or admitted to trading on the New York Stock Exchange or, if the Equity
Shares are not listed or admitted to trading on the New York Stock
Exchange, as reported in the principal consolidated transaction reporting
system with respect to securities listed on the principal national
securities exchange on which the Equity Shares are listed or admitted to
trading, or, if the Equity Shares are not listed or admitted to trading on
any national securities exchange, the last quoted price, or if not so
quoted, the average of the high bid and low asked prices in the over-the-
counter market, as reported by the NASDAQ National Market system, or, if
such system is no longer in use, the principal other automated quotations
system that may then be in use or, if the Equity Shares are not quoted by
any such organization, the average of the closing bid and asked prices as
furnished by a professional market maker making a market in the Equity
Shares selected by the Trustees. "Trading Day" shall mean a day on which
the principal national securities exchange on which the Equity Shares are
listed or admitted to trading is open for the transaction of business or,
if the Equity Shares are not listed or admitted to trading on any national
securities exchange, shall mean any day other than a Saturday, a Sunday, or
a day on which banking institutions in the State of New York are authorized
or obligated by law or executive order to close.
"Non-Transfer Event" shall mean an event other than a purported
Transfer that would cause (i) any Person to Beneficially Own Capital Stock
in excess of the Ownership Limit (in the case of any Person other than an
Existing Holder) or the applicable Existing Holder Limit (in the case of an
Existing Holder) or (ii) any Person, other than an Existing Constructive
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Holder, to Constructively Own Capital Stock in excess of the Constructive
Ownership Limit.
"Ownership Limit" shall mean 9.9% of the value of the outstanding
Capital Stock of the Trust.
"Permitted Transferee" shall mean any Person designated as a Permitted
Transferee in accordance with the provisions of Section 6.16(5).
"Person" shall mean an individual, corporation, partnership, estate,
limited liability company, unincorporated organization, joint venture,
state or political subdivision, governmental agency, trust, a portion of a
trust permanently set aside for or to be used exclusively for the purposes
described in Section 642(c) of the Code, an association, a private
foundation within the meaning of Section 509(a) of the Code, a joint stock
company, other entity, or a group as that term is used for purposes of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended.
"Prohibited Owner" shall mean, with respect to any purported Transfer
described in Section 6.14(2) or Non-Transfer Event, any Person who, but for
the provisions of Section 6.14(2), would own record title to Capital Stock.
"REIT" shall mean a Freal estate investment trust under the REIT
Provisions.
"REIT Provisions" shall mean Sections 856 through 860 of the Code, and
the regulations thereunder.
"Restriction Termination Date" shall mean the first day after the
Effective Date on which the Trustees determine that it is no longer in the
best interests of the Trust to attempt to continue to qualify as a REIT.
"Shares-in-Trust" shall mean any Capital Stock designated as Shares-
in-Trust pursuant to Section 6.14(3).
"Special Trust" shall mean any separate trust created pursuant to
Section 6.16(l) and administered in accordance with the terms of Section
6.16, for the exclusive benefit of any Beneficiary.
"Special Trustee" shall mean any person or entity unaffiliated with
the Trust, any Prohibited Owner (and, if different, any purported
beneficial transferee for whom the Prohibited Owner would have acquired
Capital Stock but for Section 6.14(2)) and any Beneficiary, such Special
Trustee to be designated by the Trust to act as trustee of any Special
Trust, or any successor trustee thereof.
"Transfer" shall mean any issuance, sale, transfer, gift,
hypothecation, pledge, assignment devise, or other disposition of Capital
Stock (including, without limitation, (i) the granting of any option or
entering into any agreement for the sale, transfer, assignment, or other
disposition of Capital Stock or (ii) the sale, transfer, assignment or
other disposition of any
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securities or rights convertible into or exchangeable for Capital Stock),
whether voluntary or involuntary, whether of record, constructively, or
beneficially and whether by operation of law or otherwise.
"Transfer Violation" shall have the meaning assigned to such term in
Section 6.14(3).
"Underwriter" shall mean a securities firm or similar entity solely in
its capacity as a party to an underwriting agreement with the Trust entered
into with the intent of such firm or other entity of acquiring securities
of the Trust for resale, but only to the extent any Capital Stock is held
by it in its capacity as an Underwriter (and then, only for a period not to
exceed ninety days).
"Unrecovered Excess Dividends" shall mean, with respect to a
Prohibited Owner, the dollar amount of any dividends or distributions
received by such Prohibited Owner which are described in the second
sentence of Section 6.16(2), but only to the extent such amount has not
been recovered by the Trust and paid over to the Special Trustee or for the
benefit of the Beneficiary in accordance with Section 6.16(2).
(2) RESTRICTIONS ON OWNERSHIP AND TRANSFERS. The following
restrictions on ownership and transfers are subject to Sections 6.14(11)
and 6.14(13) of this Declaration of Trust:
(i) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, no Person (other than an Existing Holder) shall Beneficially Own
Capital Stock in excess of the Ownership Limit, and no Existing Holder
shall Beneficially Own Capital Stock in excess of the Existing Holder
Limit for such Existing Holder.
(ii) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, no Person (other than an Existing Constructive Holder) shall
Constructively Own Capital Stock in excess of the Constructive
Ownership Limit.
(iii) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, any Transfer that, if effective, would result in any Person
other than an Existing Holder Beneficially Owning Capital Stock in
excess of the Ownership Limit shall be void AB INITIO as to the
Transfer of that number of shares of Capital Stock which would be
otherwise Beneficially Owned by such Person in excess of the Ownership
Limit, and the intended transferee shall acquire no rights or interest
whatsoever in such excess shares of Capital Stock.
(iv) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, any Transfer that, if effective, would result in any
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Existing Holder Beneficially Owning Capital Stock in excess of the
applicable Existing Holder Limit shall be void AB INITIO as to the
Transfer of that number of shares of Capital Stock which would be
otherwise Beneficially Owned by such Person in excess of the
applicable Existing Holder Limit, and such Existing Holder shall
acquire no rights or interest whatsoever in such excess shares of
Capital Stock.
(v) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, any Transfer that, if effective, would result in any Person
(other than an Existing Constructive Holder) Constructively Owning
Capital Stock in excess of the Constructive Ownership Limit shall be
void AB INITIO as to the Transfer of that number of shares of Capital
Stock which would be otherwise Constructively Owned in excess of the
Constructive Ownership Limit, and the intended transferee shall
acquire no rights or interest whatsoever in such excess shares of
Capital Stock.
(vi) Except as otherwise provided in Section 6.14(10), from
and after the Effective Date and prior to the Restriction Termination
Date, any Transfer or Non-Transfer Event that, if effective, would
result in the shares of Capital Stock being beneficially owned by
fewer than 100 Persons (determined without reference to any rules of
attribution) shall be void AB INITIO as to the Transfer of that number
of shares of Capital Stock which would be otherwise beneficially owned
(determined without reference to any rules of attribution) by the
transferee, and the intended transferee shall acquire no rights or
interest whatsoever in such shares of Capital Stock.
(vii) From and after the Effective Date and prior to the
Restriction Termination Date, any Transfer that, if effective, would
result in the Trust being "closely held" within the meaning of Section
856(h) of the code, shall be void AB INITIO as to the Transfer of that
number of shares of Capital Stock which would cause the Trust to be
"closely held" within the meaning of Section 856(h) of the Code, and
the intended transferee shall acquire no rights or interest whatsoever
in such excess shares of Capital Stock.
(3) TRANSFER IN TRUST.
(i) If, notwithstanding the other provisions contained in
Sections 6.14 through 6.16 and subject to Section 6.17 hereof, at any
time on or after the Effective Date and prior to the Restriction
Termination Date, there is a purported Transfer or Non-Transfer Event
such that any Person would Beneficially Own shares of Capital Stock in
excess of the Ownership Limit (in the case of any Person other than an
Existing Holder) or Existing Holder Limit (in the case of an Existing
Holder), then, except as otherwise provided in Sections 6.14(10),
(11), (12) or (13), (A) the purported transferee
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shall acquire no right or interest (or, in the case of a Non-Transfer
Event, the person holding record title to the shares of Capital Stock
Beneficially Owned by such Beneficial Owner shall cease to own any
right or interest) in such number of shares of Capital Stock which
would cause such Beneficial Owner to Beneficially Own shares of
Capital Stock in excess of the Ownership Limit or the Existing Holder
Limit, as the case may be; (B) such number of shares of Capital Stock
in excess of the Ownership Limit or the Existing Holder Limit (rounded
up to the nearest whole share) shall be designated Shares-in-Trust
and, in accordance with Section 6.16(l), transferred automatically and
by operation of law to a Special Trust; and (C) such purported
transferee or record holder (as the case may be) shall submit to the
Trust certificates for such number of shares of Capital Stock to be
transferred to the Special Trust for registration in the name of the
Special Trustee. Such transfer to a Special Trust and the designation
of the Shares-in-Trust shall be effective as of the close of business
on the business day prior to the date of the purported Transfer or
Non-Transfer Event, as the case may be. Subject to Section 6.14(12),
in determining which shares of Capital Stock are so transferred and so
designated in the case of a Non-Transfer Event, shares of Capital
Stock directly owned by any Person who caused the Non-Transfer Event
to occur shall be so transferred and so designated before any shares
of Capital Stock not so held are so transferred and so designated.
Subject to Section 6.14(12), where several Persons are similarly
situated, such transfer and such designation shall be pro rata.
(ii) If, notwithstanding the other provisions contained in
Sections 6.14 through 6.16 and subject to Section 6.17 hereof, at any
time on or after the Effective Date and prior to the Restriction
Termination Date, there is a purported Transfer or Non-Transfer Event
such that any Person would Constructively Own shares of Capital Stock
in excess of the Constructive Ownership Limit (other than an Existing
Constructive Holder), then, except as otherwise provided in Sections
6.14(10), (11), (12), or (13), (A) the purported transferee shall
acquire no right or interest (or, in the case of a NonTransfer Event,
the person holding record title to the shares of Capital Stock
Constructively Owned by such Constructive Owner shall cease to own any
right or interest) in such number of shares of Capital Stock which
would cause such Constructive Owner to Constructively Own shares of
Capital Stock in excess of the Constructive Ownership limit; (B) such
number of shares of Capital Stock in excess of the Constructive
Ownership Limit (rounded up to the nearest whole share) shall be
designated Shares-in-Trust and, in accordance with Section 6.16(l),
transferred automatically and by operation of law to a Special Trust;
and (C) such purported transferee or record holder (as the case may
be) shall submit to the Trust certificates for such number of shares
of Capital Stock to be transferred to the Special Trust for
registration in the name of the Special Trustee. Such transfer to a
Special Trust and the designation of the Shares-in-Trust shall be
effective as of the close of business on the business day prior to the
date of the purported Transfer or
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Non-Transfer Event, as the case may be. Subject to Section 6.14(12),
in determining which shares of Capital Stock are so transferred and so
designated in the case of a Non-Transfer Event, shares of Capital
Stock directly owned by any Person who caused the Non-Transfer Event
to occur shall be so transferred and so designated before any shares
of Capital Stock not so held are so transferred and so designated.
Subject to Section 6.14(12), where several Persons are similarly
situated, such transfer and such designation shall be pro rata.
(iii) If, notwithstanding the other provisions contained in
Sections 6.14 through 6.16 and subject to Section 6.17 hereof, at any
time on or after the Effective Date and prior to the Restriction
Termination Date, there is a purported Transfer or Non-Transfer Event
that, if effective, would cause the Trust to (x) be beneficially owned
by fewer than 100 Persons (determined without reference to any rules
of attribution) or (y) become "closely held" within the meaning of
Section 856(h) of the Code (each, a "Transfer Violation"), then,
except as otherwise provided in Section 6.14(10), (11), (12), or (13),
(A) the purported transferee shall not acquire any right or interest
(or, in the case of a Non-Transfer Event, the person holding record
title of the shares of Capital Stock with respect to which such Non-
Transfer Event occurred, shall cease to own any right or interest, in
such number of shares of Capital Stock, the ownership of which by such
purported transferee or record holder would result in a Transfer
Violation; (B) such number of shares of Capital Stock (rounded up to
the nearest whole share) shall be designated Shares-in-Trust and, in
accordance with the provisions of Section 6.16(l), transferred
automatically and by operation of law, to one or more Special Trusts
to be held in accordance with that Section 6.16; and (C) such
purported transferee or record holder (as the case may be) shall
submit to the Trust certificates for such number of shares of Capital
Stock to be transferred to the Special Trust or Special Trusts for
registration in the name of the Special Trustee. Such transfer to a
Special Trust and the designation of shares as Shares-in-Trust shall
be effective as of the close of business on the business day prior to
the date of the Transfer or Non-Transfer Event, as the case may be.
Subject to Section 6.14(12), in determining which shares of Capital
Stock are so transferred and so designated in the case of a Non-
Transfer Event, shares of Capital Stock directly owned by any Person
who caused the Non-Transfer Event to occur shall be so transferred and
so designated before any shares of Capital Stock not so held are so
transferee and so designated. Subject to Section 6.14(12), where
several Persons are similarly situated, such transfer and such
designation shall be pro rata.
(4) REMEDIES FOR BREACH. If the Trustees or their designees shall at
any time determine in good faith that a Transfer has taken place in
violation of Section 6.14 or that a Person intends to acquire or has
attempted to acquire Beneficial Ownership or Constructive Ownership of any
shares of
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Capital Stock of the Trust in violation of Section 6.14, or that any such
Transfer or acquisition, intended or attempted, would jeopardize the status
of the Trust as a REIT under the Code, the Trustees or their designees
shall take such actions as it or they deem advisable to refuse to give
effect or to prevent such Transfer or acquisition, including, but not
limited to, refusing to give effect or to prevent such Transfer or
acquisition on the books of the Trust or instituting proceedings to enjoin
such Transfer or acquisition; provided however, that, except as provided in
Section 6.14(10), (11), (12) or (13), any Transfers, attempted Transfers or
acquisitions in violation of Section 6.14(2) shall be void AB INITIO and
automatically result in the designation described in Section 6.14(3)
hereof, irrespective of any action (or non-action) by the Trustees or their
designees.
(5) NOTICE OF RESTRICTED TRANSFER. Any Person who acquires or
attempts to acquire shares of Capital Stock in violation of Section
6.14(2), or any Person who owned shares of Capital Stock that were
transferred to a Special Trust pursuant to the provisions of Section
6.14(3), shall immediately give written notice to the Trust of such event,
shall submit to the Trust certificates for such number of shares of Capital
Stock to be transferred to the Special Trust, and shall provide to the
Trust such other information as the Trust may request in order to determine
the effect, if any, of such Transfer or NonTransfer Event, as the case may
be, on the Trust's status as a REIT.
(6) REMEDIES NOT LIMITED. Nothing contained in this Section 6.14
through Section 6.16 shall limit the authority of the Trustees to take such
other action as it deems necessary or advisable to protect the Trust and
the interests of its shareholders by preservation of the Trust's status as
a REIT and to ensure compliance with the Ownership Limit, the Existing
Holder Limit, the Constructive Ownership Limit, and the REIT Provisions.
(7) AMBIGUITY. In the case of an ambiguity in the application of any
of the provisions of Section 6.14, including any definition contained in
Section 6.14(l), the Trustees shall have the power to determine the
application of the provisions of this Section 6.14 with respect to any
situation based on the facts known to it.
(8) MODIFICATION OF OWNERSHIP LIMIT. Subject to the limitations
provided in Section 6.14(9), the Trustees may from time to time increase
the Existing Holder Limit for an Existing Holder.
(9) LIMITATIONS ON MODIFICATIONS. Notwithstanding any other
provision of Sections 6.14 through 6.16:
(i) The Existing Holder Limit may not be increased if,
after giving effect to such increase, five or fewer Beneficial Owners
that are (i) individuals for purposes of Section 542(a)(2) of the
Code, or (ii) trusts to which the provisions of Section
856(h)(3)(A)(i) of the Code apply, could Beneficially Own, in the
aggregate, more than 49.9% in value of the outstanding shares of
Capital Stock.
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(ii) Prior to the modifications of the Existing Holder Limit
pursuant to Section 6.14(8), the Trustees may require such opinions of
counsel, affidavits, undertakings, or agreements as they may deem
necessary or advisable in order to determine or ensure the Trust's
status as a REIT.
(10) EXCEPTION. The Trustees, upon receipt of a ruling from the
Internal Revenue Service, an opinion of counsel, or such other evidence
that the Trustees deem satisfactory, in each case to the effect that the
restriction contained in Section 6.14(2)(vii) will not be violated, shall,
subject to such terms and conditions as the Trustees deem appropriate,
exempt a Person from the Ownership Limit, the Existing Holder Limit, or the
Constructive Ownership Limit if (x) in the case of any exemption from the
Ownership Limit or an Existing Holder Limit, such Person is (i) not an
individual for purposes of Section 542(a)(2) of the Code, or (ii) a trust
to which the provisions of Section 856(h)(3)(A)(i) of the Code apply, (y)
the Trustees obtain such representations, undertakings or other
arrangements from such Person as the Trustees deem necessary or appropriate
to ensure that the granting of the exemption will not jeopardize the
Trust's status as a REIT, and (z) such Person agrees that any violation or
attempted violation of the terms or conditions of the exemption, the
Ownership Limit, an Existing Holder Limit, or the Constructive Ownership
Limit will result in a transfer to a Special Trust of Equity Shares in
accordance with Section 6.14(3).
(11) EXCEPTION FOR CERTAIN EXISTING HOLDERS. Notwithstanding any
provision of Section 6.14 of this Declaration of Trust to the contrary, the
restrictions on ownership and transfers contained in Section 6.14(2) shall
not apply to an Existing Holder that is (i) a regulated investment company
(within the meaning of the Investment Company Act of 1940), so long as no
more than 9.9% of the value of the outstanding equity interests therein is
Beneficially Owned by a Person who is treated as an individual for purposes
of Section 542(a)(2) of the Code, (ii) a mutual life insurance company, or
(iii) a trust described in Section 401(a) of the Code, so long as the
actuarial interest of any individual in such trust does not exceed 9.9% of
the total actuarial interests in such trust.
(12) ORDERING RULE FOR SHARES-IN-TRUST. Notwithstanding any
provision of Section 6.14 of this Declaration of Trust to the contrary, any
shares of Capital Stock held or acquired by an Existing Holder as record or
beneficial owner (without applying any rules of attribution under the Code)
shall not be considered to violate the restrictions on ownership and
Transfer in Section 6.14(2) or be designated as Shares-in-Trust pursuant to
Section 6.14(3) unless the shares of Capital Stock held or acquired by the
Existing Holder as record or beneficial owner (without applying any rules
of attribution under the Code) exceed the Existing Holder Limit for such
Existing Holder and such Existing Holder is not described in clauses (i),
(ii) or (iii) of Section 6.14(11). This Section 6.14(12) is to be
interpreted and applied so that if (A) any shares of Capital Stock held or
acquired by an Existing Holder as record or beneficial owner (without
applying any rules of attribution under the Code) are treated as being
Beneficially Owned or Constructively Owned by another Person ("Existing
Holder Shares") and (B)
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that Person Beneficially Owns shares of Capital Stock in excess of the
Constructive Ownership Limit, then no Existing Holder Shares may be deemed
to violate the restrictions of Section 6.14(2) or be designated Shares-in-
Trust pursuant to Section 6.14(3) until all of the shares of Capital Stock
Beneficially Owned or Constructively Owned by such Person (other than
Existing Holder Shares) have been so designated, and then only to the
extent the Existing Holder Shares held or acquired by the Existing Holder
as record or beneficial owner (without applying any attribution rules of
the Code) violate the Existing Holder Limit for such Existing Holder and
such Existing Holder is not described in clauses (i), (ii) or (iii) of
Section 6.14(11).
(13) EXCEPTION FOR CERTAIN UNDERWRITERS. Unless an exception is
otherwise provided pursuant to Section 6.14(10), the restrictions on
ownership and transfers contained in Section 6.14(2) shall not apply to an
Underwriter unless the ownership of Capital Stock by the Underwriter would
result in the Trust being "closely held" (within the meaning of Section
856(h) of the Code) or otherwise would result in the Trust failing to
qualify as a REIT.
6.15 LEGEND. Each certificate for Capital Stock shall bear the following
legend:
"THE SHARES OF CAPITAL STOCK REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO
RESTRICTIONS ON OWNERSHIP AND TRANSFER FOR THE PURPOSE OF THE TRUSTS MAINTENANCE
OF ITS STATUS AS A REAL ESTATE INVESTMENT TRUST UNDER THE INTERNAL REVENUE CODE
OF 1986, AS AMENDED (THE "CODE"). SUBJECT TO CERTAIN PROVISIONS OF THE TRUSTS
DECLARATION OF TRUST, NO PERSON MAY (A) BENEFICIALLY OWN SHARES OF CAPITAL STOCK
IN EXCESS OF THE OWNERSHIP LIMIT UNLESS SUCH PERSON IS AN EXISTING HOLDER (IN
WHICH CASE, THE EXISTING HOLDER LIMIT SHALL BE APPLICABLE); (B) TRANSFER SHARES
OF CAPITAL STOCK IF SUCH TRANSFER WOULD RESULT IN THE SHARES OF CAPITAL STOCK
BEING OWNED BENEFICIALLY BY FEWER THAN 100 PERSONS; (C) BENEFICIALLY OWN OR
CONSTRUCTIVELY OWN SHARES OF CAPITAL STOCK WHICH WOULD RESULT IN THE TRUST BEING
"CLOSELY HELD" UNDER SECTION 856(H) OF THE CODE OR (D) CONSTRUCTIVELY OWN SHARES
OF CAPITAL STOCK IN EXCESS OF 9.9% OF THE VALUE OF THE OUTSTANDING CAPITAL STOCK
OF THE TRUST (UNLESS SUCH PERSON IS AN EXISTING CONSTRUCTIVE HOLDER). ANY
PERSON WHO ATTEMPTS TO BENEFICIALLY OWN OR CONSTRUCTIVELY OWN SHARES OF CAPITAL
STOCK IN EXCESS OF THE ABOVE LIMITATIONS MUST IMMEDIATELY NOTIFY THE TRUST. FOR
PURPOSES OF THE OWNERSHIP RESTRICTION DESCRIBED IN CLAUSE (A) ABOVE, THE
"OWNERSHIP LIMIT" MEANS 9.9% OF THE VALUE OF THE OUTSTANDING SHARES OF CAPITAL
STOCK OF THE TRUST. CERTAIN TRANSACTIONS NOT INVOLVING THE DIRECT TRANSFER OF
CAPITAL STOCK OF THE TRUST MAY RESULT IN THE APPLICATION OF THE RESTRICTIONS
REFERRED TO ABOVE. ALL DEFINED TERMS IN THIS LEGEND HAVE THE MEANINGS DEFINED
IN THE TRUSTS DECLARATION OF TRUST, AS THE SAME MAY BE AMENDED FROM TIME TO TIME
A COPY OF WHICH, INCLUDING THE
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RESTRICTIONS ON TRANSFER, WILL BE SENT WITHOUT CHARGE TO EACH SHAREHOLDER WHO SO
REQUESTS IN WRITING WITHIN FIVE (5) DAYS AFTER RECEIPT OF THE WRITTEN REQUEST.
IF THE RESTRICTIONS ABOVE ARE VIOLATED, THE SHARES OF CAPITAL STOCK REPRESENTED
HEREBY WILL BE TRANSFERRED AUTOMATICALLY AND BY OPERATION OF LAW TO A SPECIAL
TRUST AND SHALL BE DESIGNATED SHARES-IN-TRUST."
6.16 SHARES-IN-TRUST.
(1) SPECIAL TRUST. Any shares of Capital Stock transferred to a
Special Trust and designated Shares-in-Trust pursuant to Section 6.14(3)
shall be held for the exclusive benefit of the Beneficiary or
Beneficiaries. The Special Trustee shall name a Beneficiary or
Beneficiaries of each Special Trust within five (5) days after discovery of
the existence thereof Any transfer to a Special Trust, and subsequent
designation of shares of Capital Stock as Shares-in-Trust, pursuant to
Section 6.14(3) shall be effective as of the close of business on the
business day prior to the date of the Transfer or Non-Transfer event that
results in the transfer to the Special Trust. Shares-in-Trust shall remain
issued and outstanding shares of Capital Stock of the Trust and shall be
entitled to the same rights and privileges on the identical terms and
conditions as are all other issued and outstanding shares of Capital Stock
of the same class and series. When transferred to the Permitted Transferee
in accordance with the provisions of Section 6.16(5), such Shares-in-Trust
shall cease to be designated as Shares-in-Trust.
(2) DIVIDEND RIGHTS. The Special Trustee, as record holder of
Shares-in-Trust, shall be entitled to receive all dividends and
distributions as may be declared by the Trustees on such shares of Capital
Stock and shall hold such dividends or distributions in trust for the
benefit of the Beneficiary or Beneficiaries. The Prohibited Owner with
respect to Shares-in-Trust shall repay to the Special Trustee the amount of
any dividends or distributions received by it (i) that are attributable to
any shares of Capital Stock designated Shares-in-Trust and (ii) the record
date of which was on or after the effective date of the designation of such
shares as Shares-in-Trust. The Trust shall take all measures that it
determines reasonably necessary to recover the amount of any such dividend
or distribution paid to a Prohibited Owner, including, if necessary,
withholding any portion of future dividends or distributions payable on
shares of Capital Stock of the Person who, but for the provisions of
Section 6.14(3), would Constructively Own or Beneficially Own the Shares-
in-Trust; and, as soon as reasonably practicable following the Trust's
receipt or withholding thereof, shall pay over to the Special Trustee for
the benefit of the Beneficiary or Beneficiaries the dividends so received
or withheld, as the case may be.
(3) RIGHTS UPON LIQUIDATION. In the event of any voluntary or
involuntary liquidation, dissolution, or winding up of the Trust, each
holder of Shares-in-Trust shall be entitled to receive, ratably with each
other holder of shares of Capital Stock of the same class or series, that
portion of the assets of the Trust which is available for distribution to
the holders of such class and series of shares of Capital Stock. The
Special Trustee shall
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distribute to the Prohibited Owner the amounts received upon such
liquidation, dissolution, or winding up; provided, however, that (i) the
Prohibited Owner shall not be entitled to receive amounts pursuant to this
subsection (3) in excess of, (x) in the case of a purported Transfer in
which the Prohibited Owner gave value for shares of Capital Stock and which
Transfer resulted in the transfer of the shares to the Special Trust, the
price per share, if any, such Prohibited Owner paid for the shares of
Capital Stock and, (y) in the case of a Non-Transfer Event or Transfer in
which the Prohibited Owner did not give value or such shares (E.G., if the
shares were received through a gift or devise) and which Non-Transfer Event
or Transfer, as the case may be, resulted in the transfer of shares to the
Special Trust, the price per share equal to the Market Price on the date of
such Non-Transfer Event or Transfer; and (ii) that any amount otherwise
payable to the Prohibited Owner pursuant to this subsection (3) shall be
reduced by any Unrecovered Excess Dividends of such Prohibited Owner, but
only to the extent the amount thereof has been specified in a written
notice by the Trust to the Special Trustee. Any remaining amount in such
Special Trust shall be distributed to the Beneficiary or Beneficiaries.
(4) VOTING RIGHTS. The Special Trustee shall be entitled to vote all
Shares-in-Trust. The Trustees shall take all measures that they determine
to be reasonably necessary and in the best interests of the Trust, subject
to applicable law, to invalidate or rescind any vote case by a Prohibited
Owner as a holder of shares of Capital Stock prior to the discovery by the
Trust that the shares of Capital Stock are Shares-in-Trust. In the event
that the Trustees take action to invalidate or rescind any vote case by a
Prohibited Owner in accordance with the preceding sentence, subject to
applicable law, the Prohibited Owner shall be deemed to have given, as of
the close of business on the business day prior to the date of the
purported Transfer or Non-Transfer Event that results in the transfer to
the Special Trust of the shares of Capital Stock under Section 6.14(3), an
irrevocable proxy to the Special Trustee to vote the Shares-in-Trust, in
which case such Shares-in-Trust shall be deemed to have voted by the
Special Trustee in the same proportions as the votes cast by holders of
shares of Capital Stock other than Shares-in-Trust.
(5) DESIGNATION OF PERMITTED TRANSFEREE. The Special Trustee shall
have the exclusive and absolute right to designate a Permitted Transferee
of any and all Shares-in-Trust. To the extent reasonably practicable, and
in an orderly fashion so as not to materially adversely affect the Market
Price of the Shares-in-Trust, the Special Trustee shall designate any
Person as a Permitted Transferee, PROVIDED, HOWEVER, that (i) the Permitted
Transferee so designated purchases for valuable consideration (whether in a
public or private sale) the Shares-in-Trust, (ii) the Permitted Transferee
so designated may acquire such Shares-in-Trust without such acquisition
resulting in a transfer to a Special Trust and the redesignation of such
shares of Capital Stock so acquired as Shares-in-Trust under Section
6.14(3) and (iii) the Trust shall have waived its right, pursuant to
Section 6.16(7), to repurchase such Shares-in-Trust or such right shall
have expired. Upon the designation by the Special Trustee of a Permitted
Transferee in accordance with the provisions of this subsection (5) (and
the payment by the Permitted Transferee of the
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consideration provided in clause (i) above), the Special Trustee of a
Special Trust shall (A) cause to be transferred to the Permitted Transferee
that number of Shares-in-Trust acquired by the Permitted Transferee; (B)
cause to be recorded on the books of the Trust that the Permitted
Transferee is the holder of record of such number of shares of Capital
Stock; and (C) distribute to the Beneficiary any and all amounts held with
respect to the Shares-in-Trust after making the payment to the Prohibited
Owner provided for pursuant to Section 6.16(6).
(6) COMPENSATION TO RECORD HOLDER OF EQUITY SHARES THAT BECOME
SHARES-IN-TRUST. Any Prohibited Owner shall be entitled (following
discovery by the Trust that shares of Capital Stock owned by such
Prohibited Owner are Shares-in-Trust and subsequent designation of the
Permitted Transferee in accordance with Section 6.16(5)) to receive from
the Special Trustee the lesser of (i) in the case of (A) a purported
Transfer in which the Prohibited Owner gave value for shares of Capital
Stock and which Transfer resulted in the transfer of the shares to the
Special Trust, the price per share, if any, such Prohibited Owner paid for
the shares of Capital Stock, or (B) a Non-Transfer Event or Transfer in
which the Prohibited Owner did not give value for such shares (e.g., if
the shares were received through a gift or devise) and which Non-Transfer
Event or Transfer, as the case may be, resulted in the transfer of shares
to the Special Trust, the price per share equal to the Market Price on the
date of such NonTransfer Event or Transfer, and (ii) the price per share
received by the Special Trustee of the Special Trust from the sale or other
disposition of such Shares-in-Trust in accordance with Section 6.16(5);
provided, however, that any amount otherwise payable to the Prohibited
Owner pursuant to this subsection (6) shall be reduced by any Unrecovered
Excess Dividends of such Prohibited Owner, but only to the extent the
amount hereof has been specified in a written notice by the Trust to the
Special Trustee. Any amounts received by the Special Trustee in respect of
such Shares-in-Trust in excess of such amounts to be paid to the Prohibited
Owner pursuant to this Section 6.16(6) shall be distributed to the
Beneficiary in accordance with the provisions of Section 6.16(5). Each
Beneficiary and Prohibited Owner waives any and all claims that such
Beneficiary or Prohibited Owner may have against the Special Trustee and
the Trust arising out of the gross negligence or willful misconduct of, or
any failure to make payments in accordance with misconduct of, or any
failure to make payments in accordance with Section 6.16 by, such Special
Trustee or the Trust.
(7) PURCHASE RIGHT IN SHARES-IN-TRUST. Shares-in-Trust shall be
deemed to have been offered for sale to the Trust, or its designee, at a
price per share equal to the lesser of (i) the price per share in the
transaction that created such Shares-in-Trust (or, in case of devise, gift,
or Non-Transfer Event, the Market Price at the time of such device, gift,
or Non-Transfer Event) and (ii) the Market Price on the date the Trust, or
its designee, accepts such offer. The Trust shall have the right to accept
such offer for a period of ninety (90) days after the later of (A) the date
of the Non-Transfer Event or purported Transfer which resulted in such
Shares-in-Trust and (B) the date the Trust determines in good faith that a
Transfer or Non-Transfer Event resulting in Shares-in-Trust has occurred,
if the Trust does not receive
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a notice of such Transfer or Non-Transfer or Non-Transfer Event pursuant to
Section 6.14(5).
6.17 EXCHANGE TRANSACTIONS. Nothing in this Declaration of Trust shall
preclude the settlement of any transaction with respect to the Capital Stock of
the Trust entered into through the facilities of the New York Stock Exchange.
As set forth in Sections 6.14 through 6.16, certain transactions may be settled
by designating shares of Capital Stock Beneficially Owned or Constructively
Owned by a Person in violation of the Ownership Limit, the Existing Holder
Limit, or the Constructive Ownership Limit, as the case may be, as Shares-in-
Trust.
ARTICLE 7
LIABILITY OF TRUSTEES, SHAREHOLDERS AND OFFICERS,
AND OTHER MATTERS
7.1 EXCULPATION OF TRUSTEES AND OFFICERS.
(1) No Trustee or officer of the Trust shall be liable to the Trust
or to any Trustee for any act or omission of any other Trustee,
Shareholder, officer or agent of the Trust or be held to any personal
liability whatsoever in tort, contract or otherwise in connection with the
affairs of the Trust except only that arising from his own willful
misfeasance, bad faith, gross negligence or reckless disregard of duty.
(2) To the maximum extent that the laws of the State of Maryland in
effect from time to time permit limitation of the liability of Trustees and
Officers, no Trustee or Officer of the Trust shall be liable to the Trust
or its Shareholders for money damages. Neither the amendment nor repeal of
this Section, nor the adoption or amendment of any other provision of the
Declaration of Trust or By-laws inconsistent with this Section, shall apply
to or affect in any respect the applicability of the preceding sentence
with respect to any act or failure to act which occurred prior to such
amendment, repeal or adoption.
(3) The provisions of subsection (a) shall be applicable to any act
or omission by a Trustee or officer of the Trust occurring prior to the
filing of Articles of Amendment adopting subsections (b) and (c) hereof
with the State Department of Assessments and Taxation of Maryland (the
"Effective Date"). For acts or omissions occurring on or after the
Effective Date, the provisions of subsection (b) shall also be applicable.
7.2 LIMITATION OF LIABILITY OF SHAREHOLDERS, TRUSTEES AND OFFICERS. The
Trustees and officers of the Trust in incurring any debts, liabilities or
obligations, or in taking or omitting any other actions for or in connection
with the Trust are, and shall be deemed to be, acting as Trustees or officers of
the Trust and not in their own individual capacities. Except to the extent
provided in Section 7.1, no Trustee or officer of the Trust shall, nor shall any
Shareholder, be liable for any debt, claim, demand, judgment, decree, liability
or obligation of any kind of, against or with respect to the Trust, arising out
of any action taken or omitted for or on behalf of the
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Trust and the Trust shall be solely liable therefor and resort shall be had
solely to the Trust Estate for the payment or performance thereof. Each
Shareholder shall be entitled to pro rata indemnity from the Trust Estate if,
contrary to the provisions hereof, such Shareholder shall be held to any such
personal liability.
7.3 EXPRESS EXCULPATORY CLAUSES IN INSTRUMENTS. As far as practicable,
the Trustees shall cause any written instrument creating an obligation of the
Trust to include a reference to this Declaration and to provide that neither the
Shareholders nor the Trustees nor the officers of the Trust shall be liable
thereunder and that the other parties to such instrument shall look solely to
the Trust Estate for the payment of any claim thereunder or for the performance
thereof; provided, however, that the omission of such provision from any such
instrument shall not render the Shareholders or any Trustee or officer of the
Trust liable nor shall the Trustees or any officer of the Trust be liable to
anyone for such omission.
7.4 INDEMNIFICATION OF TRUSTEES AND OFFICERS. The Trust shall indemnify
the Trustee and Officers of the Trust to the full extent permitted by the
general laws of the State of Maryland now or hereafter in force with respect to
the indemnification of directors of a Maryland corporation including the advance
of expenses under the procedures provided by such laws. Any reference in such
laws to directors shall be deemed to refer to Trustees of the Trust and to the
corporation shall be deemed to refer to the Trust. The foregoing shall not
limit the authority of the Trust to indemnify officers who are not Trustees and
other employees and agents of the Trust consistent with law.
7.5 RIGHT OF TRUSTEES AND OFFICERS TO OWN SHARES OR OTHER PROPERTY AND TO
ENGAGE IN OTHER BUSINESS.
(1) Any Trustee or officer of the Trust may acquire, own, hold and
dispose of Shares and other Securities of the Trust for his individual
account, and may exercise all rights of a Shareholder to the same extent
and in the same manner as if he were not a Trustee or officer. Any Trustee
or officer of the Trust may have personal business interests and may engage
in personal business activities, which interests and activities may include
the acquisition, syndication, holding, management, operation or
disposition, for his own account or for the account of others, of interests
in Mortgages, interests in Real Property, or interests in Persons engaged
in the real estate business, provided the same do not (except as permitted
in subsection 7.5(2)) directly compete with the actual business being
conducted by the Trust. Subject to the provisions of Article 4, any
Trustee or officer of the Trust may be interested as trustee, officer,
director, stockholder, partner, member, adviser or employee, or otherwise
have a direct or indirect interest in any Person who may be engaged to
render advice or services to the Trust, and may receive compensation from
such Person as well as compensation as Trustee, officer or otherwise
hereunder and no such activities shall be deemed to conflict with his
duties and powers as Trustee or officer.
(2) Nothing in this Declaration shall be deemed:
(i) to prohibit a Trustee or officer of the Trust who is
also engaged in rendering professional services from rendering such
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professional services to any Person or from acting as trustee,
director, member, adviser, officer or representative of any such
Person to whom he renders or has rendered such services; or
(ii) to prohibit a Trustee or officer of the Trust from
having personal business interests or engaging in personal business
activities which:
(A) the Trustees (by vote or consent sufficient for
such purpose without counting the vote of the interested
Trustee) have decided should not be acquired or engaged
in by the Trust; or
(B) the Trust could not have acquired or engaged in
without violating any provision of this Declaration or
applicable law,
even though any such Person, interests or activities are or could be
in competition, in any way, with the Trust, or any such Person is in
the same or similar business as that of the Trust.
7.6 TRANSACTIONS BETWEEN THE TRUSTEES AND THE TRUST. Notwithstanding any
other provisions of this Declaration, the Trust shall not knowingly, directly or
indirectly, (i) acquire any property from, or sell, lend, or otherwise transfer
any property to, any Trustee, or (ii) make any such transaction with any
Affiliate of any Trustee or any Person of which a Trustee owns more than 1% of
the voting securities, unless such transaction has been approved by the
affirmative vote of a majority of the Trustees who are not Affiliates of such
Trustee or any Person of which a Trustee owns more than 1% of the voting
securities, after full disclosure as to the interest of the Trustee or his
Affiliate or such Person in such transaction, is on terms not less favorable to
the Trust than those then prevailing for comparable transactions at arm's
length, is fair and reasonable to the Shareholders, and relates to (i)
acquisition by the Trust from Affiliates of a Trustee or the Adviser or any
Person of which a Trustee owns more than 1% of the voting securities, of
participations in any Mortgage loans if such Affiliate or Person retains, on no
more favorable terms than the Trust, at least a 25% participation therein,
provided that no such participation need be retained by an Affiliate which is
principally engaged in the mortgage banking business and has undertaken to
provide the Trust with investment opportunities within the Trust's investment
policies, (ii) acquisition or disposition of assets at the formation of the
Trust or within 120 days thereafter or when purchased with the proceeds of
subsequent offerings of securities of the Trust, (iii) repayment of Construction
Loans at maturity or upon completion of the construction, or (iv) acquisition of
properties by the Trust at prices not exceeding fair value as determined by
independent appraisal. The Trustees are not restricted by this Section 7.6 from
forming a corporation, partnership, trust or other business association owned by
the Trustees or by their nominees for the purpose of holding title to property
of the Trust or managing property of the Trust provided the Trustees' motive for
the formation of such business association is not their own enrichment.
7.7 RESTRICTION OF DUTIES AND LIABILITIES. To the extent that the nature
of this Trust will permit, the duties and liabilities of Shareholders, Trustees
and officers shall
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<PAGE>
in no event be greater than the duties and liabilities of shareholders,
directors and officers of a Maryland corporation. The Shareholders, Trustees
and officers shall in no event have any greater duties or liabilities than those
imposed by applicable law as shall be in effect from time to time.
7.8 PERSONS DEALING WITH TRUSTEES OR OFFICERS. Any act of the Trustees or
officers purporting to be done in their capacity as such shall, as to any
Persons dealing with such Trustees or officers, be conclusively deemed to be
within the purposes of this Trust and within the powers of the Trustees and
officers. No Person dealing with the Trustees or any of them, or with the
authorized officers, agents or representatives of the Trust, shall be bound to
see to the application of any funds or property passing into their hands or
control. The receipt of the Trustees or any of them, or of authorized officers,
agents, or representatives of the Trust, for moneys or other consideration,
shall be binding upon the Trust.
7.9 RELIANCE. The Trustees and officers may consult with counsel (which
may be a firm in which one or more of the Trustees or officers is or are
members) and the advice or opinion of such counsel shall be full and complete
personal protection to all of the Trustees and officers in respect of any action
taken or suffered by them in good faith and in reliance on or in accordance with
such advice or opinion. In discharging their duties, Trustees and officers,
when acting in good faith, may rely upon financial statements of the Trust
represented to them to be correct by the President or the officer of the Trust
having charge of its books of account, or stated in a written report by an
independent certified public accountant fairly to present the financial position
of the Trust. The Trustees may rely, and shall be personally protected in
acting, upon any instrument or other document believed by them to be genuine.
ARTICLE 8
DURATION, AMENDMENT, TERMINATION AND
QUALIFICATION OF TRUST
8.1 DURATION OF TRUST. Unless terminated as provided herein, the Trust
created hereby shall have perpetual existence; provided, however, anything
herein to the contrary notwithstanding, if at any time prior to the first date
on which the Shares of the Trust shall be owned beneficially by more than 100
Persons all of the Trustees named in Section 9.9 shall have ceased to be living,
the Trust created hereby shall terminate immediately upon the death of the last
survivor of such Trustees.
8.2 TERMINATION OF TRUST.
(1) The Trust may be terminated by the vote or consent of the holders
of two-thirds of the outstanding Shares entitled to vote thereon. Upon the
termination of the Trust:
(i) The Trust shall carry on no business except for the
purpose of winding up its affairs.
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<PAGE>
(ii) The Trustees shall proceed to wind up the affairs of
the Trust and all of the powers of the Trustees under this Declaration
shall continue until the affairs of the Trust shall have been wound
up, including the power to fulfill or discharge the contracts of the
Trust, collect its assets, sell, convey, assign, exchange, transfer or
otherwise dispose of all or any part of the remaining Trust Estate to
one or more persons at public or private sale for consideration which
may consist in whole or in part of cash, Securities or other property
of any kind, discharge or pay its liabilities, and do all other acts
appropriate to liquidate its business; provided that any sale,
conveyance, assignment, exchange, transfer or other disposition of
substantially all of the Trust Estate as a whole shall require
approval of the principal terms of the transaction and the nature and
amount of the consideration by vote or consent of the holders of a
majority of the outstanding Shares entitled to vote thereon.
(iii) After paying or adequately providing for the payment of
all liabilities, and upon receipt of such releases, indemnities and
refunding agreements, as they deem necessary for their protection, the
Trustees shall, subject to the provisions of any Preferred Shares
which may then be outstanding, distribute the remaining Trust Estate,
in cash or in kind or partly each, among the Shareholders pro rata
according to the number of Common Shares held by each.
(2) After termination of the Trust and distribution to the
Shareholders as herein provided, the Trustees shall execute and lodge among
the records of the Trust an instrument in writing setting forth the fact of
such termination, and the Trustees shall thereupon be discharged from all
further liabilities and duties hereunder and the rights and interests of
all Shareholders hereunder shall thereupon cease.
8.3 AMENDMENT PROCEDURE.
(1) This Declaration may be amended by the vote or consent of the
holders of a majority of the outstanding Shares entitled to vote thereon,
except that Section 7.2 and the prohibition against assessment upon
Shareholders in Section 6.1 shall be amended only by the vote or consent
of the holders of all outstanding Shares entitled to vote thereon. The
Trustees may also amend this Declaration without the vote or consent of
Shareholders if they deem it necessary to conform this Declaration to the
requirements of the REIT Provisions of the Internal Revenue Code or to
other applicable federal laws or regulations, but the Trustees shall not be
liable for failing to do so.
(2) A certification in recordable form signed by a majority of the
Trustees setting forth an amendment and reciting that it was duly adopted
by the Shareholders or by the Trustees as aforesaid or a copy of the
Declaration, as amended, in recordable form, and executed by a majority of
the Trustees, shall be conclusive evidence of such amendment when lodged
among the records of the Trust.
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<PAGE>
ARTICLE 9
MISCELLANEOUS
9.1 APPLICABLE LAW. This Declaration and the rights of all parties and
the construction and effect of every provision hereof shall be subject to and
construed according to the statutes and laws of Maryland.
9.2 INDEX AND HEADINGS FOR REFERENCE ONLY. The index and headings
preceding the text, articles and sections hereof have been inserted for
convenience and reference only and shall not be construed to affect the meaning,
construction or effect of this Declaration.
9.3 SUCCESSORS IN INTEREST. This Declaration and the By-Laws shall be
binding upon and inure to the benefit of the undersigned Trustees and their
successors, assigns, heirs, distributees and legal representatives, and every
Shareholder and his successors, assigns, heirs, distributees and legal
representatives.
9.4 COUNTERPARTS. This Declaration may be simultaneously executed in
several counterparts, each of which when so executed shall be deemed to be an
original and such counterparts together shall constitute one and the same
instrument, which shall be sufficiently evidenced by any such original
counterpart.
9.5 PROVISIONS OF THE TRUST IN CONFLICT WITH LAW OR REGULATIONS.
(1) The provisions of this Declaration are severable, and if the
Trustees shall determine, with the advice of counsel, that any one or more
of such provisions (the "Conflicting Provisions") would have the effect of
preventing the Trust from qualifying as a "real estate investment trust"
under the REIT Provisions of the Internal Revenue Code or are in conflict
with other applicable federal laws and regulations, the Conflicting
Provisions shall be deemed never to have constituted a part of the
Declaration; PROVIDED, HOWEVER, that such determination by the Trustees
shall not affect or impair any of the remaining provisions of this
Declaration or render invalid or improper any action taken or omitted
(including but not limited to the election of Trustees) prior to such
determination. A certification in recordable form signed by a majority of
the Trustees setting forth any such determination and reciting that it was
duly adopted by the Trustees, or a copy of this Declaration, with the
Conflicting Provisions removed pursuant to such a determination, in
recordable form, signed by a majority of the Trustees, shall be conclusive
evidence of such determination when lodged in the records of the Trust.
The Trustees shall not be liable for failure to make any determination
under this Section 9.5(1). Nothing in this Section 9.5(1) shall in any way
limit or affect the right of the Trustees to amend this Declaration
provided in Section 8.3(1).
(2) If any provision of this Declaration shall be held invalid or
unenforceable, such invalidity or unenforceability shall attach only to
such provision and shall not in any manner affect or render invalid or
unenforceable any other provision of this Declaration, and this Declaration
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<PAGE>
shall be carried out as if any such invalid or unenforceable provision were
not contained herein.
9.6 CERTIFICATIONS. The following certifications shall be final and
conclusive as to any persons dealing with the Trust:
(1) A certification of a vacancy among the Trustees by reason of
resignation, removal, increase in the number of Trustees, incapacity, death
or otherwise, when made in writing by a majority of the remaining Trustees;
(2) A certification as to the persons holding office as Trustees or
officers at any particular time, when made in writing by the Secretary of
the Trust or by any Trustee;
(3) A certification that a copy of this Declaration or of the By-Laws
is a true and correct copy thereof as then in force, when made in writing
by the Secretary of the Trust or by any Trustee;
(4) The certifications referred to in Sections 8.3(2) and 9.5(1)
hereof;
(5) A certification as to any action by Trustees, other than those
referred to in paragraph (4) above, or the Shareholders when made in
writing by the Secretary of the Trust or by any Trustee.
9.7 RECORDING AND FILING. A copy of this instrument and any amendments to
the Declaration shall be filed with the Department of Assessments and Taxation
of Maryland. This Declaration and any amendments may also be filed or recorded
in such other places as the Trustees deem appropriate.
9.8 RESIDENT AGENT. The name and post office address of the resident
agent of the Trust in the State of Maryland is The Corporation Trust,
Incorporated, 32 South Street, Baltimore, Maryland 21202. Said resident is a
citizen of the State of Maryland actually residing therein. The resident agent
may be removed and a vacancy existing in such office for any reason may be
filled by a majority of the Trustees.
9.9 NAMES AND ADDRESSES OF TRUSTEES AND OFFICERS. The names and addresses
of the Trustees and officers of the Trust are as follows:
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<PAGE>
Name Address
---- -------
Trustees:
Martin Bernstein . . . . . . . . . . . 85 Shrewsbury Drive
Livingston, NJ 07039
Richard S. Frary . . . . . . . . . . . Tallwood Associates, Inc.
1370 Avenue of the Americas
New York, NY 10019
Jeffrey A. Altman. . . . . . . . . . . Mutual Shares
51 JFK Parkway
Short Hills, NJ 07078
Richard B. Jennings. . . . . . . . . . Realty Capital International, Inc.
885 Third Avenue, Suite 2900
New York, NY 10022-4082
George R. Zoffinger. . . . . . . . . . 120 Albany Street Plaza
8th Floor
New Brunswick, NJ 08901
John B. Levy . . . . . . . . . . . . . 206 South Mooreland Road
Richmond, VA 23229
Carl A. Mayer, Jr. . . . . . . . . . . The Mayer Group
2265 Westwood Blvd., Suite 106
Los Angeles, CA 90064
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<PAGE>
Name Address
---- -------
Officers:
C.W. Strong, Jr
Chief Executive Officer. . . . . . . . 1421 Via Zumaya
Palos Verdes Estates, CA 90274
James A. Dalton
Executive Vice President . . . . . . . 249 Northwestern Avenue
Philadelphia, PA 19128
Daniel F. Hennessey
Chief Financial Officer. . . . . . . . 300 Camphill Road
Ft. Washington, PA 19034
Donald W. Burnes, Jr.
Senior Vice President. . . . . . . . . Mortgage and Realty Trust
3500 Olive Avenue, #600
Burbank, CA 91505-4628
Douglas R. Eckard
Senior Vice President. . . . . . . . . Mortgage and Realty Trust
8380 Old York Road, Suite 300
Elkins Park, PA 19117-1590
Hugh T. Regan, Jr.
Vice President . . . . . . . . . . . . 15 East Delaware Trail
Medford, NJ 08055
Claire M. Adams
Secretary. . . . . . . . . . . . . . . 830-1/2 North Gardner Street
Los Angeles, CA 90046
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<PAGE>
Each of the Trustees of Mortgage and Realty Trust has caused these presents
to be signed, in counterpart, as of September 29, 1995:
MORTGAGE AND REALTY TRUST
By: /s/ Martin Bernstein
--------------------------------
Martin Bernstein, Trustee
By: /s/ Richard S. Frary
--------------------------------
Richard S. Frary, Trustee
By: /s/ Kevin F. Haggarty
--------------------------------
Kevin F. Haggarty, Trustee
By: /s/ Richard B. Jennings
--------------------------------
Richard B. Jennings, Trustee
By: /s/ George R. Zoffinger
--------------------------------
George R. Zoffinger, Trustee
By: /s/ John B. Levy
--------------------------------
John B. Levy, Trustee
By: /s/ Carl A. Mayer, Jr.
--------------------------------
Carl A. Mayer, Jr., Trustee
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<PAGE>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
MORTGAGE AND REALTY TRUST
$110,000,000
11-1/8% SENIOR SECURED NOTES DUE 2002
_________________________________
___________
AMENDED AND RESTATED INDENTURE
Dated as of September 29, 1995
___________
___________
WILMINGTON TRUST COMPANY
___________
as Trustee
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
<PAGE>
CROSS-REFERENCE TABLE*
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
310(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(a)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(a)(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.10
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
311(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.11
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
312(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.05
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.03
313(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
(b)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06,10.03
(b)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06,12.02
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.06
314(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4.09,12.02
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.02,12.02
(c)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.04
(c)(3). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.03,10.04
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.05
(f) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
315(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.05,12.02
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7.01
(e) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.11
316(a)(last sentence). . . . . . . . . . . . . . . . . . . . . . . . . . . .2.09
(a)(1)(A) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.05
(a)(1)(B) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.04
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.07
<PAGE>
TRUST INDENTURE
ACT SECTION INDENTURE SECTION
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.13
317(a)(1). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.08
(a)(2). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6.09
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2.04
318(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.01
(b) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .N.A.
(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.01
N.A. means not applicable.
* This Cross-Reference Table is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE. . . . . . . . 1
SECTION 1.01. DEFINITIONS . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.02. OTHER DEFINITIONS . . . . . . . . . . . . . . . . . 13
"Standing Instruction" 3.09
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT . . . . . . . . . . . . . . . . . . . . . . . 13
SECTION 1.04. RULES OF CONSTRUCTION . . . . . . . . . . . . . . . 14
ARTICLE 2
THE NOTES. . . . . . . . . . . . . . . . 14
SECTION 2.01. FORM AND DATING . . . . . . . . . . . . . . . . . . 14
SECTION 2.02. EXECUTION AND AUTHENTICATION. . . . . . . . . . . . 14
SECTION 2.03. REGISTRAR AND PAYING AGENT. . . . . . . . . . . . . 15
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST . . . . . . . . 15
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES . . . . . . . . . . . 16
SECTION 2.06. TRANSFER AND EXCHANGE . . . . . . . . . . . . . . . 16
SECTION 2.07. REPLACEMENT NOTES . . . . . . . . . . . . . . . . . 17
SECTION 2.08. OUTSTANDING NOTES . . . . . . . . . . . . . . . . . 17
SECTION 2.09. TREASURY NOTES. . . . . . . . . . . . . . . . . . . 18
SECTION 2.10. TEMPORARY NOTES . . . . . . . . . . . . . . . . . . 18
SECTION 2.11. CANCELLATION. . . . . . . . . . . . . . . . . . . . 18
SECTION 2.12. DEFAULTED INTEREST. . . . . . . . . . . . . . . . . 19
SECTION 2.13. RECORD DATE . . . . . . . . . . . . . . . . . . . . 19
SECTION 2.14. CUSIP NUMBER. . . . . . . . . . . . . . . . . . . . 19
ARTICLE 3
REDEMPTION. . . . . . . . . . . . . . . . 19
SECTION 3.01. NOTICES TO TRUSTEE. . . . . . . . . . . . . . . . . 19
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED . . . . . . . . . 20
SECTION 3.03. NOTICE OF REDEMPTION. . . . . . . . . . . . . . . . 20
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION. . . . . . . . . . . 21
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE . . . . . . . . . . . . 21
SECTION 3.06. NOTES REDEEMED IN PART. . . . . . . . . . . . . . . 22
SECTION 3.07. OPTIONAL REDEMPTION . . . . . . . . . . . . . . . . 22
SECTION 3.08. MANDATORY REDEMPTION. . . . . . . . . . . . . . . . 22
SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF
i
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Page
ASSET SALE PROCEEDS. . . . . . . . . . . . . . . . . . . . . . 22
ARTICLE 4
COVENANTS. . . . . . . . . . . . . . . . 25
SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST . . . . . . . . . 25
SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY . . . . . . . . . . 25
SECTION 4.03. OFFICERS' AND ACCOUNTANTS' CERTIFICATES
AS TO COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . 26
SECTION 4.04. CONDUCT OF BUSINESS . . . . . . . . . . . . . . . . 26
SECTION 4.05. PAYMENT OF TAXES, ETC.. . . . . . . . . . . . . . . 26
SECTION 4.06. MAINTENANCE OF INSURANCE. . . . . . . . . . . . . . 27
SECTION 4.07. PRESERVATION OF EXISTENCE, ETC. . . . . . . . . . . 27
SECTION 4.08. MAINTENANCE OF PROPERTIES, ETC. . . . . . . . . . . 27
SECTION 4.09. FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . 27
SECTION 4.10. NEW REAL ESTATE, ETC. . . . . . . . . . . . . . . . 29
SECTION 4.11. DEPOSIT OF ASSET SALE PROCEEDS. . . . . . . . . . . 29
SECTION 4.12. LIMITATION ON INVESTMENTS . . . . . . . . . . . . . 30
SECTION 4.13. LIENS, ETC. . . . . . . . . . . . . . . . . . . . . 30
SECTION 4.14. INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . 32
SECTION 4.15. LEASE OBLIGATIONS . . . . . . . . . . . . . . . . . 33
SECTION 4.16. RESTRICTED PAYMENTS . . . . . . . . . . . . . . . . 33
SECTION 4.17. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . 34
SECTION 4.18. NEW SUBSIDIARIES. . . . . . . . . . . . . . . . . . 34
SECTION 4.19. OFFER TO REPURCHASE UPON CHANGE OF CONTROL. . . . . 35
ARTICLE 5
SUCCESSORS. . . . . . . . . . . . . . . . 36
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS. . . . . . 36
SECTION 5.02. SUCCESSOR ENTITY SUBSTITUTED. . . . . . . . . . . . 37
ARTICLE 6
DEFAULTS AND REMEDIES. . . . . . . . . . . . . 37
SECTION 6.01. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . 37
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Page
SECTION 6.02. ACCELERATION. . . . . . . . . . . . . . . . . . . . 39
SECTION 6.03. OTHER REMEDIES. . . . . . . . . . . . . . . . . . . 39
SECTION 6.04. WAIVER OF PAST DEFAULTS . . . . . . . . . . . . . . 39
SECTION 6.05. DIRECTION BY REQUIRED HOLDERS . . . . . . . . . . . 40
SECTION 6.06. LIMITATION ON SUITS . . . . . . . . . . . . . . . . 40
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT . . . 41
SECTION 6.08. COLLECTION SUIT . . . . . . . . . . . . . . . . . . 41
SECTION 6.09. PROOFS OF CLAIM . . . . . . . . . . . . . . . . . . 41
SECTION 6.10. PRIORITIES. . . . . . . . . . . . . . . . . . . . . 42
SECTION 6.11. UNDERTAKING FOR COSTS . . . . . . . . . . . . . . . 42
ARTICLE 7
TRUSTEE . . . . . . . . . . . . . . . . 43
SECTION 7.01. DUTIES OF TRUSTEE . . . . . . . . . . . . . . . . . 43
SECTION 7.02. RIGHTS OF TRUSTEE . . . . . . . . . . . . . . . . . 44
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE. . . . . . . . . . . . 45
SECTION 7.04. DISCLAIMER. . . . . . . . . . . . . . . . . . . . . 46
SECTION 7.05. NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . 46
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES. . . . . 46
SECTION 7.07. COMPENSATION AND INDEMNITY. . . . . . . . . . . . . 47
SECTION 7.08. REPLACEMENT OF TRUSTEE. . . . . . . . . . . . . . . 48
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC. . . . . . . . . . 49
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION . . . . . . . . . . . 49
SECTION 7.11. PREFERENTIAL COLLECTION OF
CLAIMS AGAINST ISSUER. . . . . . . . . . . . . . . . . . . . . 49
ARTICLE 8
DEFEASANCE. . . . . . . . . . . . . . . . 50
SECTION 8.01. OPTION TO EFFECT DEFEASANCE . . . . . . . . . . . . 50
SECTION 8.02. DEFEASANCE AND DISCHARGE. . . . . . . . . . . . . . 50
SECTION 8.03. CONDITIONS TO DEFEASANCE. . . . . . . . . . . . . . 50
SECTION 8.04. DEPOSITED MONEY AND GOVERNMENTAL
SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS . . . . . . . . . . . . . . . . 52
iii
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Page
SECTION 8.05. REPAYMENT TO ISSUER . . . . . . . . . . . . . . . . 52
SECTION 8.06. REINSTATEMENT . . . . . . . . . . . . . . . . . . . 53
ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER . . . . . . . . . . 53
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES . . . . . . . . 53
SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES. . . . . . . . . . 54
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT . . . . . . . . 55
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS . . . . . . . . . 56
SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES. . . . . . . . . . 56
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.. . . . . . . . . . 56
ARTICLE 10
COLLATERAL AND SECURITY . . . . . . . . . . . . 57
SECTION 10.01. COLLATERAL DOCUMENTS . . . . . . . . . . . . . . . 57
SECTION 10.02. RECORDING AND OPINIONS . . . . . . . . . . . . . . 57
SECTION 10.03. RELEASE OF COLLATERAL. . . . . . . . . . . . . . . 58
SECTION 10.04. CERTIFICATES OF THE ISSUER . . . . . . . . . . . . 59
SECTION 10.05. AUTHORIZATION OF ACTIONS TO BE TAKEN BY
THE COLLATERAL AGENT UNDER THE COLLATERAL
DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . 59
SECTION 10.06. AUTHORIZATION OF RECEIPT OF FUNDS BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS . . . . . . . . . . . 60
SECTION 10.07. TERMINATION OF SECURITY INTEREST . . . . . . . . . 60
ARTICLE 11
GUARANTEE OF NOTES. . . . . . . . . . . . . . 60
SECTION 11.01. UNCONDITIONAL GUARANTEE. . . . . . . . . . . . . . 60
SECTION 11.02. CONTRIBUTION . . . . . . . . . . . . . . . . . . . 61
SECTION 11.03. "TRUSTEE" TO INCLUDE PAYING AGENT. . . . . . . . . 61
SECTION 11.04. RELEASE OF A GUARANTOR . . . . . . . . . . . . . . 62
SECTION 11.05. EXECUTION OF GUARANTEES. . . . . . . . . . . . . . 62
ARTICLE 12
MISCELLANEOUS. . . . . . . . . . . . . . . 62
SECTION 12.01. TRUST INDENTURE ACT CONTROLS . . . . . . . . . . . 62
iv
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Page
SECTION 12.02. NOTICES. . . . . . . . . . . . . . . . . . . . . . 62
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES . . . . . . . . . . . . . . . . . . . 64
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION . . . . . . . . . . . . . . . . . . . . . . . . . 64
SECTION 12.06. RULES BY TRUSTEE AND AGENTS. . . . . . . . . . . . 65
SECTION 12.07. NO PERSONAL LIABILITY OF TRUSTEES,
OFFICERS, EMPLOYEES AND EQUITYHOLDERS. . . . . . . . . . . . 65
SECTION 12.08. GOVERNING LAW. . . . . . . . . . . . . . . . . . . 65
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . 65
SECTION 12.10. SUCCESSORS . . . . . . . . . . . . . . . . . . . . 66
SECTION 12.11. SEVERABILITY . . . . . . . . . . . . . . . . . . . 66
SECTION 12.12. COUNTERPART ORIGINALS. . . . . . . . . . . . . . . 66
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.. . . . . . . . . 66
SECTION 12.14. AMENDMENT AND RESTATEMENT. . . . . . . . . . . . . 66
SECTION 12.15. SATISFACTION AND DISCHARGE . . . . . . . . . . . . 66
v
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EXHIBITS
Exhibit A Form of Note
Exhibit B Form of Assignment of Lease
Exhibit C Form of Collateral Assignment of Lease
Exhibit C-1 Form of Collateral Assignment of Mortgage
Exhibit D Form of Mortgage
Exhibit D-1 Form of Amendment to Mortgage
Exhibit E Form of Pledge Agreement
Exhibit F Form of Amended and Restated Collateral and Security Agreement
SCHEDULES
Schedule 1 Real Estate
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AMENDED AND RESTATED INDENTURE dated as of September 29, 1995 between
Mortgage and Realty Trust, a real estate investment trust formed under the laws
of Maryland (the "Issuer"), and Wilmington Trust Company, as trustee (the
"Trustee").
The Issuer and the Trustee agree as follows for the benefit of each
other and for the equal and ratable benefit of the Holders of the Issuer's
11-1/8% Senior Secured Notes due 2002 (the "Notes"):
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. DEFINITIONS.
"ADJUSTED NET ASSETS" of a Guarantor at the date of any claim for
contribution pursuant to Section 11.02 hereof means the lesser of the amount by
which (x) the fair value of the property of such Guarantor exceeds the total
amount of liabilities, including, without limitation, contingent liabilities
(after giving effect to all other fixed and contingent liabilities incurred or
assumed on such date), but excluding liabilities under the related Guarantee, of
such Guarantor at such date and (y) the present fair salable value of the assets
of such Guarantor at such date exceeds the amount that will be required to pay
the probable liability of such Guarantor on its debts (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date and
after giving effect to any collection from any other Subsidiary of the Issuer in
respect of the obligations of such Subsidiary under the related Guarantee),
excluding debt in respect of the related Guarantee, as they become absolute and
matured.
"AFFILIATE" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person and includes each officer, director, trustee
or general partner of such Person, and each owner of 5% or more of any class of
voting stock or interests of such Person. For purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means any Registrar, Paying Agent or co-registrar.
"ASSET SALE" means any sale or other disposition, or series of
sales or other dispositions, made on or after the Effective Date by the
Issuer or any Subsidiary to any Person of any Collateral. For the purposes
hereof, any prepayment or
<PAGE>
payment at maturity of an Underlying Promissory Note shall be deemed to be an
"Asset Sale."
"ASSET SALE ACCOUNT" means that trust account (account no. 28666-1)
maintained at Wilmington Trust Company in the name of the Collateral Agent,
under the sole dominion and control of the Collateral Agent, and administered
pursuant to the Collateral Documents.
"ASSET SALE PROCEEDS" means payments in Cash or other property
(including securities) received by the Issuer or any Subsidiary (including,
without limitation, any Cash payments received by way of deferred payment of
principal pursuant a note or receivable or otherwise, but only as and when
received) from any Asset Sale (after repayment of any Indebtedness required to
be paid by reason of such Asset Sale), in each case net of the amount of
(a) reasonable brokers' and advisors' fees and commissions actually paid other
than to an Affiliate of the Issuer, (b) all foreign, federal, state and local
taxes actually payable by the Issuer as a direct consequence of such Asset Sale,
(c) the reasonable fees and expenses attributable to such Asset Sale, to the
extent not included in clause (a) above, except to the extent paid to any
Affiliate of the Issuer, and (d) any proportionate share of the proceeds
required to be paid to any Person owning a beneficial interest in the property
or assets sold pursuant to such Asset Sale.
"ASSIGNMENTS OF LEASES" means each Assignment of Lease, in the form
attached hereto as Exhibit B made by the Issuer or a Subsidiary, executed
heretofore, concurrently herewith or hereafter in favor of the Collateral Agent
on behalf of the Trustee, the Collateral Agent and the Holders, assigning a
Lease, as the same may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced in accordance with the terms thereof.
"AVAILABLE CASH" means, as at any date of determination, all Cash and
Cash Equivalents held by the Issuer, any Subsidiary or the Trustee, including,
without limitation, Cash and Cash Equivalents held in the Asset Sale Account.
"BANKRUPTCY CODE" means the Bankruptcy Reform Act of 1978, as amended,
and as codified in title 11 of the United States Code.
"BANKRUPTCY LAW" means the Bankruptcy Code or any similar federal or
state law for the relief of debtors.
"BUSINESS DAY" means any day other than a Legal Holiday.
"CAPITAL EXPENDITURES" means, for any Person for any period, the
aggregate of all expenditures by such Person and its consolidated Subsidiaries,
except interest capitalized during construction, during such period for
property, plant or
2
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equipment, including, without limitation, renewals, improvements,
replacements and capitalized repairs, that would be reflected as additions to
property, plant or equipment on a consolidated balance sheet of such Person
and its Subsidiaries prepared in accordance with GAAP and includes without
limitation payments, other than those attributable to interest, on
capitalized leases and other Indebtedness incurred to finance such property,
plant and equipment. For the purpose of this definition, the purchase price
of equipment which is acquired simultaneously with the trade-in of existing
equipment owned by such Person or any of its Subsidiaries or with insurance
proceeds shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the credit granted by the seller of
such equipment being traded in at such time or the amount of such proceeds,
as the case may be.
"CASH" means legal tender accepted in the United States of America for
the payment of public and private debts currently United States Dollars.
"CASH EQUIVALENTS" means, collectively, (a) securities with maturities
of 90 days or less from the date of acquisition issued or fully guaranteed or
insured by the United States government or any agency thereof, (b) certificates
of deposit, overnight bank deposits and banker acceptances of any commercial
bank (including Wilmington Trust Company) having combined capital and surplus of
at least $200,000,000, a short term deposit rating of A1/P1 or better and
organized under the laws of the United States of America having maturities of 90
days or less from the date of acquisition and (c) commercial paper with
maturities of 90 days or less having a rating of A1/P1 or better.
"CHANGE OF CONTROL" means (i) the sale of all or substantially all of
the Issuer's and the Subsidiaries' assets (taken as a whole), in one or in a
series of transactions, to any "person" or "group" (as such terms are used in or
defined in Section 13(d)(3) of the Exchange Act), (ii) an event or series of
events (whether a stock purchase, merger, consolidation or other business
combination or otherwise) by which any Person or group (other than the Holders
existing on the date hereof, including any Person becoming a Holder prior to the
date hereof and who is a Holder on the date hereof) is or becomes the
"Beneficial Owner" (as defined under Rule 13d-3 under the Exchange Act) directly
or indirectly of more than 50% of the combined voting power of the then
outstanding securities of the Issuer ordinarily (and apart from rights accruing
after the happening of a contingency) having the right to vote in the election
of trustees or (iii) after the Issue Date, the replacement of a majority of the
Board of Trustees of the Issuer over a two-year period from the trustees who
constituted the Board of Trustees at the beginning of such period other than by
(a) trustees whose nomination for election by the equityholders of the Issuer
was approved by such Board of Trustees, (b) trustees elected by such Board of
Trustees or (c) trustees nominated or elected by trustees approved as set forth
in (a) or (b) above.
3
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"COLLATERAL" means all the assets of the Issuer defined as
"Collateral" in the Collateral Documents.
"COLLATERAL AGENT" means the collective reference to Wilmington Trust
Company and William J. Wade or such other collateral agent as may be appointed
from time to time pursuant to the Security Agreement.
"COLLATERAL ASSIGNMENTS OF LEASES" means each Collateral Assignment of
Lease, in the form attached hereto as Exhibit C made by the Issuer or a
Subsidiary, executed heretofore, concurrently herewith or hereafter in favor of
the Collateral Agent on behalf of the Trustee, the Collateral Agent and the
Holders, assigning the related underlying assignment of lease, as the same may
hereafter be amended, modified, supplemented, extended, renewal, restated or
replaced in accordance with the terms thereof.
"COLLATERAL ASSIGNMENTS OF MORTGAGES" means each Collateral Assignment
of Mortgage or Collateral Assignment of Deed of Trust, in the form attached
hereto as Exhibit C-1, made by the Issuer or a Subsidiary, executed heretofore,
concurrently herewith or hereafter in favor of the Collateral Agent on behalf of
the Trustee, the Collateral Agent and the Holders, assigning the Underlying
Mortgages, as the same may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced in accordance with the terms thereof.
"COLLATERAL DOCUMENTS" mean the Security Agreement, the Pledge
Agreement, the Mortgages, the Assignments of Leases, the Collateral Assignments
of Mortgages and the Collateral Assignment of Leases, and, with respect to any
of the foregoing that may have been granted prior to the date hereof, amendments
or restatements of such documents, together with all related filings,
assignments, instruments, mortgages and other papers entered into or delivered
in connection with any of the foregoing, as such agreements, filings,
assignments, instruments, mortgages or papers or documents may from time to time
be amended, supplemented or otherwise modified in accordance with the terms
hereof and thereof.
"COMMON SHARES" shall mean the Common Shares of beneficial interests
in the Issuer, par value $1.00 per share, as authorized by the declaration of
trust of the Issuer.
"COMPANY REQUEST" or "COMPANY ORDER" means a written request or order
signed in the name of the Issuer by its President, its Executive Vice President,
a Senior Vice President, a Vice President, its Treasurer or Controller, or, if
authorized by a power of attorney executed by any of such officers, by such
other person as may be authorized in such power of attorney, and delivered to
the Trustee.
4
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"CONSOLIDATED NET WORTH" means, with respect to any Person, the sum of
(i) the consolidated equity of the common equityholders of such Person and its
consolidated Subsidiaries plus (ii) the respective amounts reported on such
Person's most recent balance sheet with respect to any series of preferred
equity that by its terms is not entitled to the payment of dividends unless such
dividends may be declared and paid only out of net earnings in respect of the
year of such declaration and payment, but only to the extent of any cash
received by such Person upon issuance of such preferred equity, after
eliminating inter-company items, including appropriate deductions for any
minority interest in such Person's Subsidiaries, less (x) all write-ups (other
than write-ups of tangible assets of a going concern business made within 12
months after the acquisition of such business) subsequent to the Issue Date in
the book value of any asset owned by such Person or a consolidated Subsidiary of
such Person and (y) all unamortized debt discount and expense and unamortized
deferred charges, all of the foregoing determined in accordance with GAAP.
"CONTAMINANT" means any waste, pollutant, hazardous substance, toxic
substance, hazardous waste, special waste, petroleum or petroleum-derived
substance or waste, or any constituent of such substance or waste, including,
without limitation, any substance regulated under any Environmental Law.
"CONTINGENT OBLIGATION" means with reference to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness or contractual obligation of another Person, if the purpose or
intent of such Person in incurring the Contingent Obligation is to provide
assurance to the obligee of such Indebtedness or Contractual Obligation that
such Indebtedness or contractual obligation will be paid or discharged, or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness or contractual obligation will be protected (in whole or in part)
against loss in respect thereof.
"CORPORATE TRUST OFFICE OF THE TRUSTEE" shall be at the address of the
Trustee specified in Section 12.02 hereof or such other address as to which the
Trustee may give notice to the Issuer.
"CUSTODIAN" means any receiver, trustee or similar official under any
Bankruptcy Law.
"DEFAULT" means any event that is or with the passage of time or the
giving of notice or both would be an Event of Default.
"DISCLOSURE STATEMENT" means the Disclosure Statement and Proxy
Statement-Prospectus for the Solicitation of Votes for the Prepackaged Plan of
Reorganization of the Issuer dated July 7, 1995.
5
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"EFFECTIVE DATE" means the "Effective Date" as defined in the Plan.
"ENVIRONMENTAL LAWS" means all applicable federal, state and local
laws, statutes, rules, ordinances, judicial decisions, permits, licenses,
regulations and other governmental restrictions relating to pollution or the
environment (including, without limitation, ambient air, surface water, ground
water, land surface or subsurface strata), including, without limitation, laws,
statutes, rules, ordinances, judicial decisions, permits, licenses, regulations
and other governmental restrictions relating to emissions, discharges, releases
or threatened releases of Hazardous Substances, or otherwise relating to the
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contaminants, Hazardous Substances or
wastes or the cleanup or other remediation thereof.
"ENVIRONMENTAL LIABILITIES AND COSTS" means with reference to any
Person, all liabilities, obligations, responsibilities, liabilities resulting
from Remedial Actions, losses, damages, punitive damages, consequential damages,
treble damages, costs and expenses (including, without limitation, all
reasonable fees, disbursements and expenses of counsel, expert and consulting
fees, and costs of investigation and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any claim or demand by any other
Person, whether based in contract, tort, implied or express warranty, strict
liability, criminal or civil statute, including, without limitation, any thereof
arising under any Environmental Law, permit, order or agreement with any
Governmental Authority or other Person, and which relate to any environmental,
health or safety condition, or a Release or threatened Release, and result from
the past, present or future operations of such Person.
"ENVIRONMENTAL LIEN" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"FIRST LIEN DEBT" means Indebtedness of Paseo Padre Associates, a
California limited partnership under the Imperial Bank Loan Agreement in an
aggregate principal amount at any time outstanding not to exceed $17,566,343.03
(plus interest, fees, costs and expenses).
"FISCAL QUARTER" means each of the four consecutive three-month
periods during any Fiscal Year, which begin October 1, January 1, April 1 and
July 1, respectively.
"FISCAL YEAR" means the Issuer's fiscal year ending September 30.
6
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"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time set forth in the opinions and
pronouncements of the Accounting Principles Board and the American Institute of
Certified Public Accountants and the statements and pronouncements of the
Financial Accounting Standards Board, or in such other statements by such other
Person as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"GOVERNMENTAL SECURITIES" means direct obligations of, or obligations
guaranteed by, the United States of America, to the payment of which the full
faith and credit of the United States is pledged.
"GUARANTEE" means the guarantee of each of the Guarantors set forth in
Article 11 hereof.
"GUARANTOR" means each of the Subsidiaries of the Issuer listed as
guarantors in this Indenture or any other guarantor of the Obligations under
this Indenture.
"HAZARDOUS SUBSTANCE" means any toxic or hazardous waste, pollutants,
or substances, including, without limitation, friable asbestos, PCBs above 50
p.p.m., petroleum products and byproducts regulated as hazardous waste,
substances defined or listed as: "hazardous substances" or "toxic substances"
in the Comprehensive Environmental Response, Compensation and Liability Act of
1980 ("CERCLA") as amended, 42 U.S.C. Section 9601, ET SEQ., "hazardous
materials" in the Hazardous Transportation Act, 49 U.S.C. Section 1802, ET
SEQ., "hazardous waste" in the Resource Conservation and Recovery Act,
42 U.S.C. Section 6901, ET SEQ., any chemical substance or mixture regulated
under the Toxic Substance Control Act of 1976, as amended, 15 U.S.C. Section
2601, ET SEQ., and any hazardous or toxic substance or pollutant regulated
under any other applicable federal, state or local Environmental Laws.
"HOLDER" means a Person in whose name a Note is registered.
"INDEBTEDNESS" means with reference to any Person (a) all indebtedness
of such Person for borrowed money (including, without limitation, reimbursement
and all other obligations with respect to surety bonds, letter of credit and
bankers' acceptances, whether or not matured) or for the deferred purchase price
of property or services (other than normal trade accounts payable incurred in
the ordinary course of business), (b) all obligations of such Person evidenced
by notes, bonds, debentures or similar instruments, (c) all indebtedness of such
Person created or arising under any
7
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conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to
repossession or sale of such property), (d) all capitalized lease obligations
of such Person, (e) all Contingent Obligations of such Person, (f) all
obligations of such Person under interest rate contracts, (g) all
indebtedness of the type referred to in clause (a), (b), (c), (d), (e) or (f)
above secured by (or for which the holder of such indebtedness has an
existing right, contingent or otherwise, to be secured by) any Lien against
property or an interest in property owned by such Person, even though such
Person has not assumed or become liable for the payment of such indebtedness,
and (h) in the case of the Issuer, the Notes.
"INDENTURE" means this Indenture, as amended or supplemented from time
to time.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTMENT" means any advance, loan, extension of credit or capital
contribution to, or purchase of any stocks, bonds, notes, debentures or other
securities of, or interest in, any Person, any purchase of any interest in Real
Estate (other than by foreclosure, deed in lieu of foreclosure or other method
of realizing on security), any commitment or other obligation, whether
contingent or absolute, to do any of the foregoing, which commitment or other
obligation does not constitute a Contingent Obligation and any Capital
Expenditures.
"ISSUE DATE" means the date of first issuance of the Notes hereunder.
"LEASE" means each underlying lease of Real Estate.
"LEGAL HOLIDAY" means a Saturday, a Sunday or a day on which banking
institutions in the City of New York, Los Angeles, California, Philadelphia,
Pennsylvania, Wilmington, Delaware or at a place of payment are authorized by
law, regulation or executive order to remain closed. If a payment date is a
Legal Holiday at a place of payment, payment may be made at that place on the
next succeeding day that is not a Legal Holiday, and no interest shall accrue
for the intervening period.
"LIENS" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including, without
limitation, any conditional sale or other title retention agreement, the
interest of a lessor under a capitalized lease obligation, any financing lease
having substantially the same economic effect as any of the foregoing, the
filing, under the Uniform Commercial Code or comparable law
8
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of any jurisdiction, of any financing statement naming the owner of the
assets to which such Lien relates as debtor, and any agreement to grant a
Lien.
"MATERIAL ADVERSE CHANGE" means a material adverse change in any of
(a) the financial condition, business, performance, operations, results of
operations or the aggregate net book value of the properties of the Issuer,
(b) the legality, validity or enforceability of this Indenture, (c) the
perfection or priority of the Liens granted pursuant to this Indenture or the
Collateral Documents caused by the action or lack of action of the Issuer or any
Subsidiary, (d) the ability of the Issuer to pay any installment due under the
Notes or the Plan or to perform its obligations under this Indenture or the Plan
or the ability of the Issuer or the Subsidiaries to perform their respective
obligations under the Collateral Documents, or (e) the rights and remedies of
the Holders or the Trustee under this Indenture.
"MATERIAL ADVERSE EFFECT" means an effect that would result in a
Material Adverse Change.
"MATERIAL SUBSIDIARY" means each Subsidiary of the Issuer that, as at
any time, has at such time capital equal to more than 10% of the Consolidated
Net Worth of the Issuer.
"MORTGAGES" means each Mortgage, Security Agreement and Financing
Statement or Deed of Trust, Security Agreement and Financing Statement,
substantially in the forms attached hereto as Exhibit D, and each Amendment to
Mortgage, Security Agreement and Financing Statement or Amendment to Deed of
Trust, Security Agreement and Financing Statement, substantially in the forms
attached hereto as Exhibit D-1, in each case made by the Issuer or a Subsidiary,
executed concurrently herewith or hereafter in favor of the Collateral Agent on
behalf of the Trustee, the Collateral Agent and the Holders, encumbering the
Real Estate, as the same may hereafter be amended, modified, supplemented,
extended, renewed, restated or replaced in accordance with the terms thereof.
"NOTES" means the notes described above issued under this Indenture.
"OBLIGATIONS" means any principal, interest, penalties, fees,
indemnifications, reimbursements, damages and other liabilities payable under
the documentation governing any Indebtedness.
"OFFICER" means, with respect to any Person, the Chairman of the
Board, the Chief Executive Officer, the President, the Chief Operating Officer,
the Chief Financial Officer, the Treasurer, any Assistant Treasurer, Controller,
Secretary or any Vice-President of such Person.
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"OFFICERS' CERTIFICATE" means a certificate signed on behalf of the
Issuer by two Officers of the Issuer, one of whom must be the President or the
Executive Vice President, and the other must be the Treasurer, an Assistant
Treasurer, the Controller, the Secretary, an Assistant Secretary, a Senior Vice
President or a Vice President of the Issuer.
"OPINION OF COUNSEL" means an opinion from legal counsel (including at
the option of the Trustee and/or the Collateral Agent, local legal counsel in
each state where the relevant Collateral is located) who is reasonably
acceptable to the Trustee and/or the Collateral Agent, as applicable.
"PERSON" means any individual, corporation, partnership, joint
venture, entity, association, joint-stock company, trust or unincorporated
organization (including any subdivision or ongoing business of any such entity
or substantially all of the assets of any such entity, subdivision or business).
"PLAN" means the Plan of Reorganization in the Chapter 11 case of the
Issuer confirmed by the Honorable Samuel L. Bufford, United States Bankruptcy
Judge, in Case No. 95-31101-SB, by order entered September 22, 1995, as such
plan has been amended prior to the Effective Date.
"PLEDGE AGREEMENT" means that certain Pledge Agreement, dated as of
the date hereof, in the form attached hereto as Exhibit E, made by the Issuer,
executed concurrently herewith in favor of Wilmington Trust Company, as
collateral agent on behalf of the Trustee and the Holders, as the same may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced in accordance with the terms thereof.
"PREFERRED STOCK", as applied to the Stock of any Person, means Stock
of any class or classes (however designated) which is preferred as to the
payment of dividends, or as to the distribution of assets upon any voluntary or
involuntary liquidation or dissolution of such Person, over shares of Stock of
any other class of such Person.
"REAL ESTATE" means any interest in all plots, pieces or parcels of
land owned in any capacity, whether as a joint venturer, participant, partner or
otherwise, or in which the Issuer may have a security interest, or leased as at
the date hereof or acquired or leased hereafter by the Issuer or any Subsidiary,
including, without limitation, those listed on Schedule 1 hereto and described
in the Mortgages, together with all of the buildings and other improvements now
or hereafter erected on the Real Estate, and any fixtures appurtenant thereto.
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"REIT" means a Person satisfying the conditions of being a "real
estate investment trust" under Sections 856 through 860 of the Internal Revenue
Code and under other applicable law.
"RELEASE" means with reference to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, disbursal,
leaching or migration into the indoor or outdoor environment or into or out of
any property owned by such Person, including, without limitation, the movement
of Contaminants through or in the air, soil, surface water, ground water or
property.
"REMEDIAL ACTION" means all actions required to (a) clean up, remove,
treat or in any other way address Contaminants in the indoor or outdoor
environment, (b) prevent the Release or threat of Release or minimize the
further Release of Contaminants so they do not migrate or endanger or threaten
to endanger public health or welfare or the indoor or outdoor environment, or
(c) perform pre-remedial studies and investigations and post-remedial monitoring
and care.
"REQUIRED HOLDERS" means the Holders of a majority in principal amount
of the Notes outstanding on the date of determination.
"REQUIREMENT OF LAW" means with reference to any Person, the charter
and bylaws or other organizational or governing documents or such Person
(including, with particular reference to the Issuer, a declaration of trust),
and all federal, state and local laws, rules and regulations, including, without
limitation, Environmental Laws, and all orders, judgments, decrees or other
determinations of any Governmental Authority or arbitrator, applicable to or
binding upon such Person or any of its property or to which such Person or any
of its property is subject.
"RESPONSIBLE OFFICER," when used with respect to the Trustee or the
Collateral Agent, means any trust officer, financial services officer or vice
president within the Corporate Trust Division of the Trustee or the Collateral
Agent (or any successor group of the Trustee or the Collateral Agent) or any
other officer of the Trustee or the Collateral Agent customarily performing
functions similar to those performed by any of the above designated officers and
also means, with respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"SEC" means the Securities and Exchange Commission.
"SECURITIES ACT" means the Securities Act of 1933, as amended.
"SECURITY AGREEMENT" means that certain Amended and Restated
Collateral and Security Agreement, dated as of the date hereof, in the form
attached hereto as Exhibit F, made by the Issuer and the Subsidiaries,
executed concurrently
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herewith or hereafter in favor of the Collateral Agent on behalf of the
Trustee, the Collateral Agent and the Holders, as the same may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced in
accordance with the terms thereof.
"STOCK" means shares of capital stock, beneficial or partnership
interests, participations or other equivalents (regardless of how designated) of
or in any Person, whether voting or non-voting.
"STOCK EQUIVALENTS" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any stock, whether or not presently convertible, exchangeable or
exercisable.
"SUBSIDIARY" means with respect to any Person, any corporation,
partnership or other business entity of which an aggregate of 50% or more of the
outstanding Stock having ordinary voting power to elect a majority of the board
of directors, managers, trustees or other controlling Persons is, at the time,
directly or indirectly, owned by such Person and/or one or more Subsidiaries of
such Person (irrespective of whether, at the time, Stock of any other class or
classes of such entity shall have or might have voting power by reason of the
happening of any contingency). Unless the context otherwise requires, as used
herein "Subsidiary" shall mean a Subsidiary of the Issuer.
"TERMINATION DATE" means that date on which all Notes are paid in full
and all amounts due and owing under this Indenture and the Plan are paid in
full.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections 77aaa-
77bbbb) as in effect on the date on which this Indenture is qualified under the
TIA.
"TRUSTEE" means the party named as such above until a successor
replaces it in accordance with the applicable provisions of this Indenture and
thereafter means the successor serving hereunder.
"UNDERLYING LOAN DOCUMENTS" means collectively, the Underlying
Promissory Notes, the Underlying Mortgages, underlying assignments of leases and
rents and any guarantees, instruments, agreements or other documents existing on
the effective date of the Plan and executed by any Person to or for the benefit
of the Issuer or any Subsidiary in connection with any loan made by the Issuer
or any Subsidiary to or for the benefit of such Person, as the same may have
been amended, modified or supplemented.
"UNDERLYING MORTGAGES" means collectively, the mortgages or deeds of
trust granted by any Person to or for the benefit of the Issuer or any
Subsidiary securing
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an Underlying Promissory Note or other obligation of such Person, as the same
may have been or hereafter may be amended, modified or supplemented.
"UNDERLYING PROMISSORY NOTES" means the promissory notes or other
instruments evidencing the Indebtedness of any Person to the Issuer or any
Subsidiary other than (a) promissory notes or other instruments constituting
Cash Equivalents and (b) promissory notes or other instruments evidencing
indebtedness of any Person to the Issuer or any Subsidiary in connection with
residential loans made by the Issuer or any Subsidiary to such Person for the
purpose of purchasing a condominium unit.
SECTION 1.02. OTHER DEFINITIONS.
Defined in
Term Section
---- ----------
"Asset Sale Offer". . . . . . . . . . . . 3.09
"Change of Control Offer" . . . . . . . . 4.19
"Change of Control Payment" . . . . . . . 4.19
"Change of Control Payment Date". . . . . 4.19
"Defeasance". . . . . . . . . . . . . . . 8.02
"Event of Default". . . . . . . . . . . . 6.01
"Foreclosure Action". . . . . . . . . . . 7.02
"Funding Guarantor" . . . . . . . . . . . 11.02
"Offer Amount". . . . . . . . . . . . . . 3.09
"Offer Period". . . . . . . . . . . . . . 3.09
"Paying Agent". . . . . . . . . . . . . . 2.03
"Purchase Date" . . . . . . . . . . . . . 3.09
"Registrar" . . . . . . . . . . . . . . . 2.03
"Standing Instruction". . . . . . . . . . 3.09
SECTION 1.03. INCORPORATION BY REFERENCE OF TRUST
INDENTURE ACT.
Whenever this Indenture refers to a provision of the TIA, the
provision is incorporated by reference in and made a part of this Indenture.
The following TIA terms used in this Indenture have the following
meanings:
"INDENTURE SECURITIES" means the Notes;
"INDENTURE SECURITY HOLDER" means a Holder of a Note;
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"INDENTURE TO BE QUALIFIED" means this Indenture;
"INDENTURE TRUSTEE" or "INSTITUTIONAL TRUSTEE" means the Trustee; and
"OBLIGOR" on the Notes means the Issuer, any Guarantor and any
successor obligor upon the Notes.
All other terms used in this Indenture that are defined by the TIA,
deemed by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings so assigned to them.
SECTION 1.04. RULES OF CONSTRUCTION.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with GAAP;
(3) "or" is not exclusive;
(4) words in the singular include the plural, and in the plural
include the singular; and
(5) provisions apply to successive events and transactions.
ARTICLE 2
THE NOTES
SECTION 2.01. FORM AND DATING.
The Notes, the notation thereon relating to the Guarantee and the
Trustee's certificate of authentication shall be substantially in the form of
Exhibit A hereto, the terms of which are incorporated in and made a part of this
Indenture. The Notes may have notations, legends or endorsements approved as to
form by the Issuer and required by law, stock exchange rule, agreements to which
the Issuer is subject or usage. Each Note shall be dated the date of its
authentication. The Notes shall be issuable only in denominations of $1,000 and
integral multiples thereof.
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SECTION 2.02. EXECUTION AND AUTHENTICATION.
An Officer of the Issuer shall sign the Notes for the Issuer by manual
or facsimile signature. One Officer of each Guarantor shall sign the Guarantee
on behalf of such Guarantor by facsimile or manual signature. The Issuer's seal
shall be reproduced on the Notes and may be in facsimile form.
If an Officer whose signature is on a Note no longer holds that office
at the time the Note is authenticated, the Note shall nevertheless be valid.
A Note shall not be valid until authenticated by the manual signature
of the Trustee. The signature of the Trustee shall be conclusive evidence that
the Note has been authenticated under this Indenture.
The Trustee shall, upon a written order of the Issuer signed by two
Officers of the Issuer, authenticate Notes for original issue of up to the
aggregate principal amount stated in paragraph 4 of the Notes. The aggregate
principal amount of Notes outstanding at any time shall not exceed the amount
set forth herein.
The Trustee may appoint an authenticating agent acceptable to the
Issuer to authenticate Notes. Unless limited by the terms of such appointment,
an authenticating agent may authenticate Notes whenever the Trustee may do so.
Each reference in this Indenture to authentication by the Trustee includes
authentication by such agent. An authenticating agent has the same rights as an
Agent to deal with the Issuer or an Affiliate of the Issuer.
SECTION 2.03. REGISTRAR AND PAYING AGENT.
The Issuer shall maintain (i) an office or agency where Notes may be
presented for registration of transfer or for exchange (including any
co-registrar, the "Registrar") and (ii) an office or agency where Notes may be
presented for payment ("Paying Agent"). The Registrar shall keep a register of
the Notes and of their transfer and exchange. The Issuer may appoint one or
more co-registrars and one or more additional paying agents. The term "Paying
Agent" includes any additional paying agent. The Issuer may change any Paying
Agent, Registrar or co-registrar without prior notice to any Holder of a Note.
The Issuer shall notify the Trustee and the Trustee shall notify the Holders of
the Notes of the name and address of any Agent not a party to this Indenture.
The Issuer may act as Paying Agent, Registrar or co-registrar. The Issuer shall
enter into an appropriate agency agreement with any Agent not a party to this
Indenture, which shall incorporate the provisions of the TIA. The agreement
shall implement the provisions of this Indenture that relate to such Agent. The
Issuer shall notify the Trustee of the name and address of any such Agent. If
the Issuer fails to maintain a Registrar or Paying Agent, or fails to give the
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foregoing notice, the Trustee shall act as such, and shall be entitled to
appropriate compensation in accordance with Section 7.07 hereof.
The Issuer initially appoints the Trustee as Registrar, Paying Agent
and agent for service of notices and demands in connection with the Notes.
SECTION 2.04. PAYING AGENT TO HOLD MONEY IN TRUST.
The Issuer shall require each Paying Agent other than the Trustee to
agree in writing that the Paying Agent shall hold in trust for the benefit of
the Holders of the Notes or the Trustee all money held by the Paying Agent for
the payment of principal of and interest on the Notes, and shall notify the
Trustee of any Default by the Issuer in making any such payment. While any such
Default continues, the Trustee may require a Paying Agent to pay all money held
by it to the Trustee and to account to the Trustee for any funds disbursed. The
Issuer at any time may require a Paying Agent to pay all money held by it to the
Trustee and to account to the Trustee for any funds disbursed. Upon payment
over to the Trustee, the Paying Agent (if other than the Issuer) shall have no
further liability for the funds disbursed to the Trustee. If the Issuer acts as
Paying Agent, it shall segregate and hold in a separate trust fund for the
benefit of the Holders of the Notes all money held by it as Paying Agent.
SECTION 2.05. LISTS OF HOLDERS OF THE NOTES.
The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses
of Holders of the Notes and shall otherwise comply with TIA Section 312(a).
If the Trustee is not the Registrar, the Issuer shall furnish to the Trustee
at least seven Business Days before each interest payment date and at such
other times as the Trustee may request in writing a list in such form and as
of such date as the Trustee may reasonably require of the names and addresses
of Holders of the Notes, including the aggregate principal amount of the
Notes held by each thereof, and the Issuer shall otherwise comply with TIA
Section 312(a).
SECTION 2.06. TRANSFER AND EXCHANGE.
When Notes are presented to the Registrar with a request to register
the transfer or to exchange them for an equal principal amount of Notes of other
denominations, the Registrar shall register the transfer or make the exchange if
its requirements for such transactions are met; PROVIDED, HOWEVER, that any Note
presented or surrendered for registration of transfer or exchange shall be duly
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endorsed or accompanied by a written instruction of transfer in form
satisfactory to the Registrar and the Trustee duly executed by the Holder
thereof or by his attorney duly authorized in writing. To permit
registrations of transfer and exchanges, the Issuer shall issue and the
Trustee shall authenticate Notes at the Registrar's request, subject to such
rules as the Trustee may reasonably require.
Neither the Issuer nor the Registrar shall be required to (i) issue,
register the transfer of or exchange Notes during a period beginning at the
opening of business on a Business Day 15 days before the day of any selection of
Notes for redemption under Section 3.02 hereof or (ii) register the transfer of
or exchange any Note so selected for redemption in whole or in part, except the
unredeemed portion of any Note being redeemed in part.
No service charge shall be made to any Holder of a Note for any
registration of transfer or exchange (except as otherwise expressly permitted
herein), but the Issuer may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than such transfer tax or similar governmental charge payable upon
exchanges pursuant to Section 2.10, 3.06 or 9.05 hereof, which shall be paid by
the Issuer).
Prior to due presentment to the Trustee for registration of the
transfer of any Note, the Trustee, any Agent and the Issuer may deem and treat
the Person in whose name any Note is registered as the absolute owner of such
Note for the purpose of receiving payment of principal of, premium, if any, and
interest on such Note and for all other purposes whatsoever, whether or not such
Note is overdue, and neither the Trustee, any Agent nor the Issuer shall be
affected by notice to the contrary.
SECTION 2.07. REPLACEMENT NOTES.
If any mutilated Note is surrendered to the Trustee, or the Issuer and
the Trustee receive evidence to their satisfaction of the destruction, loss or
theft of any Note, the Issuer shall issue and the Trustee, upon the written
order of the Issuer signed by two Officers of the Issuer, shall authenticate a
replacement Note if the Trustee's requirements for replacements of Notes are
met. If required by the Trustee or the Issuer in connection with any loss,
theft or destruction of a Note, an indemnity bond must be supplied by the Holder
that is sufficient in the judgment of the Trustee and the Issuer to protect the
Issuer, the Trustee, any Agent or any authenticating agent from any loss which
any of them may suffer if a Note is replaced; PROVIDED, HOWEVER, that any
institutional Holder may satisfy such requirement for an indemnity bond by
delivering its unsecured indemnity agreement. Each of the Issuer and the
Trustee may charge for its expenses in replacing a Note.
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SECTION 2.08. OUTSTANDING NOTES.
The Notes outstanding at any time are all the Notes authenticated by
the Trustee except for those cancelled by it, those delivered to it for
cancellation and those described in this Section 2.08 as not outstanding.
If a Note is replaced pursuant to Section 2.07 hereof, it ceases to be
outstanding unless the Trustee receives proof satisfactory to it that the
replaced Note is held by a bona fide purchaser.
If the principal amount of any Note is considered paid under Section
4.01 hereof, it ceases to be outstanding and interest on it ceases to accrue.
Subject to Section 2.09 hereof, a Note does not cease to be
outstanding because the Issuer, a Subsidiary of the Issuer or an Affiliate of
the Issuer holds the Note.
SECTION 2.09. TREASURY NOTES.
In determining whether the Holders of the required principal amount of
Notes have concurred in any direction, waiver or consent, Notes owned by the
Issuer, any Subsidiary or any Affiliate of the Issuer shall be considered as
though not outstanding, except that for purposes of determining whether the
Trustee shall be protected in relying on any such direction, waiver or consent,
only Notes which a Responsible Officer knows to be so owned shall be so
considered. Notwithstanding the foregoing, Notes that are to be acquired by the
Issuer, any Subsidiary or an Affiliate of the Issuer pursuant to an exchange
offer, tender offer or other agreement shall not be deemed to be owned by the
Issuer, such Subsidiary or such Affiliate, until legal title to such Notes
passes to the Issuer, such Subsidiary or such Affiliate, as the case may be.
SECTION 2.10. TEMPORARY NOTES.
Until definitive Notes are ready for delivery, the Issuer may prepare
and the Trustee shall authenticate temporary Notes. Temporary Notes shall be
substantially in the form of definitive Notes but may have variations that the
Issuer and the Trustee consider appropriate for temporary Notes. Without
unreasonable delay, the Issuer shall prepare and the Trustee, upon receipt of
the written order of the Issuer signed by two Officers of the Issuer, shall
authenticate definitive Notes in exchange for temporary Notes. Until such
exchange, temporary Notes shall be entitled to the same rights, benefits and
privileges as definitive Notes.
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SECTION 2.11. CANCELLATION.
The Issuer at any time may deliver Notes to the Trustee for
cancellation. The Registrar and Paying Agent shall forward to the Trustee any
Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee shall cancel all Notes surrendered for registration of transfer,
exchange, payment, replacement or cancellation and shall destroy cancelled Notes
(subject to the record retention requirement of the Exchange Act), unless the
Issuer directs cancelled Notes to be returned to it. The Issuer may not issue
new Notes to replace Notes that it has redeemed or paid or that have been
delivered to the Trustee for cancellation. All cancelled Notes held by the
Trustee shall be destroyed and certification of their destruction delivered to
the Issuer, unless by a written order, signed by two Officers of the Issuer, the
Issuer shall direct that cancelled Notes be returned to it.
SECTION 2.12. DEFAULTED INTEREST.
If the Issuer defaults in a payment of interest on the Notes, it shall
pay the defaulted interest in any lawful manner plus, to the extent lawful,
interest payable on the defaulted interest, to the Persons who are Holders of
the Notes on a subsequent special record date, which date shall be at the
earliest practicable date but in all events at least five Business Days prior to
the next payment date, in each case at the rate provided in the Notes. The
Issuer shall fix or cause to be fixed each such special record date and payment
date, and shall, promptly thereafter, notify the Trustee of any such date. At
least 15 days before the special record date, the Issuer (or the Trustee, in the
name of and at the expense of the Issuer) shall mail to Holders of the Notes a
notice that states the special record date, the related payment date and the
amount of such interest to be paid.
SECTION 2.13. RECORD DATE.
The record date for purposes of determining the identity of Holders of
the Notes entitled to vote or consent to any action by vote or consent
authorized or permitted under this Indenture shall be determined as provided for
in TIA Section 316(c).
SECTION 2.14. CUSIP NUMBER.
The Issuer in issuing the Notes may use a "CUSIP" number and, if it
does so, the Trustee shall use the CUSIP number in notices of redemption or
exchange as a convenience to Holders; PROVIDED, HOWEVER, that any such notice
may state that no representation is made as to the correctness or accuracy of
the CUSIP number printed in the notice or on the Notes and that reliance may be
placed only on
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the other identification numbers printed on the Notes. The Issuer will
promptly notify the Trustee of any change in the CUSIP number.
ARTICLE 3
REDEMPTION
SECTION 3.01. NOTICES TO TRUSTEE.
If the Issuer elects to redeem Notes pursuant to the optional
redemption provisions of Section 3.07 hereof, it shall furnish to the Trustee,
at least 45 days but not more than 75 days before a redemption date, written
notice setting forth (i) the redemption date, (ii) the principal amount of Notes
to be redeemed and (iii) the redemption price.
SECTION 3.02. SELECTION OF NOTES TO BE REDEEMED.
If less than all of the Notes are to be redeemed, the Trustee shall
select the Notes to be redeemed among the Holders of the Notes in compliance
with the requirements of the principal national securities exchange, if any, on
which the Notes are listed, or, if the Notes are not so listed, on a pro rata
basis, by lot or in accordance with any other method the Trustee considers fair
and appropriate (and in such manner as complies with applicable legal and stock
exchange requirements, if any), provided that no Notes of $1,000 or less shall
be redeemed in part. In the event of partial redemption by lot, the particular
Notes to be redeemed shall be selected, unless otherwise provided herein, not
less than 30 nor more than 60 days prior to the redemption date by the Trustee
from the outstanding Notes not previously called for redemption.
The Trustee shall promptly notify the Issuer in writing of the Notes
selected for redemption and, in the case of any Note selected for partial
redemption, the principal amount thereof to be redeemed. Notes and portions of
them selected shall be in amounts of $1,000 or whole multiples of $1,000; except
that if all of the Notes of a Holder are to be redeemed, the entire outstanding
amount of Notes held by such Holder, even if not a multiple of $1,000, shall be
redeemed. Except as provided in the preceding sentence, provisions of this
Indenture that apply to Notes called for redemption also apply to portions of
Notes called for redemption.
SECTION 3.03. NOTICE OF REDEMPTION.
Subject to the provisions of Section 3.09 hereof, at least 30 days but
not more than 60 days before a redemption date, the Issuer shall mail or cause
to be
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mailed, by first class mail, a notice of redemption to each Holder whose
Notes are to be redeemed at its registered address.
The notice shall identify the Notes to be redeemed and shall state:
(a) the redemption date;
(b) the redemption price;
(c) if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the redemption
date upon surrender of such Note, a new Note or Notes in principal amount
equal to the unredeemed portion shall be issued;
(d) the name and address of the Paying Agent;
(e) that Notes called for redemption must be surrendered to the
Paying Agent to collect the redemption price;
(f) that, unless the Issuer defaults in making such redemption
payment, interest on Notes called for redemption ceases to accrue on and
after the redemption date;
(g) the aggregate principal amount of the Notes that are being
redeemed; and
(h) that no representation is made as to the correctness or accuracy
of the CUSIP number, if any, listed in such notice or printed on the Notes.
At the Issuer's written request, the Trustee shall give the notice of
redemption in the Issuer's name and at its expense.
SECTION 3.04. EFFECT OF NOTICE OF REDEMPTION.
Once notice of redemption is mailed in accordance with Section 3.03
hereof, Notes called for redemption become due and payable on the redemption
date at the redemption price.
SECTION 3.05. DEPOSIT OF REDEMPTION PRICE.
On or prior to one Business Day before any redemption date, the Issuer
shall deposit with the Trustee or with the Paying Agent money sufficient to
pay the
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redemption price of and accrued interest on all Notes to be redeemed on that
date. The Trustee or the Paying Agent shall promptly return to the Issuer
any money deposited with the Trustee or the Paying Agent by the Issuer in
excess of the amounts necessary to pay the redemption price of, and accrued
interest on, all Notes to be redeemed.
On and after the redemption date, interest shall cease to accrue on
the Notes or the portions of Notes called for redemption. If a Note is redeemed
on or after an interest record date but on or prior to the related interest
payment date, then any accrued and unpaid interest shall be paid on such
interest payment date to the Person in whose name such Note was registered at
the close of business on such record date. If any Note called for redemption
shall not be so paid upon surrender for redemption, because of the failure of
the Issuer to comply with the preceding paragraph, interest shall be paid on the
unpaid principal, from the redemption date until such principal is paid, and to
the extent lawful on any interest not paid on such unpaid principal, in each
case at the rate provided in the Notes.
SECTION 3.06. NOTES REDEEMED IN PART.
Upon surrender of a Note that is redeemed in part, the Issuer shall
issue and upon written order of the Issuer the Trustee shall authenticate for
the Holder of the Notes at the expense of the Issuer a new Note equal in
principal amount to the unredeemed portion of the Note surrendered.
SECTION 3.07. OPTIONAL REDEMPTION.
The Issuer shall have the option to redeem the Notes, in whole or in
part, upon not less than 30 nor more than 60 days' notice, at a redemption price
equal to 100% of the principal amount plus accrued and unpaid interest, if any,
thereon to the applicable redemption date.
SECTION 3.08. MANDATORY REDEMPTION.
Except as set forth under Section 3.09 or Section 4.19 hereof, the
Issuer shall not be required to make mandatory redemption payments or sinking
fund payments with respect to the Notes.
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SECTION 3.09. OFFER TO PURCHASE BY APPLICATION OF
ASSET SALE PROCEEDS.
If at any time the aggregate amount of Asset Sale Proceeds and the net
cash proceeds of Indebtedness incurred pursuant to Section 4.14(i) that have not
been applied in accordance with this Section 3.09 (exclusive of any Asset Sale
Proceeds or net cash proceeds which remain after the completion of any prior
Asset Sale Offer) exceeds $10 million, the Issuer shall make an offer to all
Holders of Notes (an "Asset Sale Offer") to purchase the maximum principal
amount of Notes that, together with accrued and unpaid interest thereon, may be
purchased with 80% of any such Asset Sale Proceeds or 100% of the net cash
proceeds of such Indebtedness, at an offer price in cash in an amount equal to
100% of the outstanding principal amount thereof plus accrued and unpaid
interest, if any, to the date fixed for the closing of such offer, in accordance
with the procedures specified below.
The Asset Sale Offer shall remain open for a period of 20 Business
Days following its commencement and no longer, except to the extent that a
longer period is required by applicable law (the "Offer Period"). No later than
five Business Days after the termination of the Offer Period (the "Purchase
Date"), the Issuer shall purchase the maximum principal amount of Notes that may
be purchased with 80% of such Asset Sale Proceeds or 100% of the net cash
proceeds of such Indebtedness (the "Offer Amount"), or, if less than the Offer
Amount has been tendered, all Notes tendered in response to the Asset Sale
Offer.
If the Purchase Date is on or after an interest record date and on or
before the related interest payment date, any accrued interest shall be paid to
the Person in whose name a Note is registered at the close of business on such
record date, and no additional interest shall be payable to Holders who tender
Notes pursuant to the Asset Sale Offer.
Upon the commencement of any Asset Sale Offer the Issuer shall send,
by first class mail, a notice to the Trustee and each of the Holders of the
Notes, with a copy to the Trustee. The notice shall contain all instructions
and materials necessary to enable such Holders to tender Notes pursuant to the
Asset Sale Offer. The notice, which shall govern the terms of the Asset Sale
Offer shall state:
(a) that such Asset Sale Offer is being made pursuant to this Section
3.09 and the length of time such Asset Sale Offer shall remain open;
(b) the Offer Amount, the purchase price and the Purchase Date;
(c) that any Note not tendered or accepted for payment shall continue
to accrue interest in accordance with its terms;
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(d) that any Note accepted for payment pursuant to such Asset Sale
Offer shall cease to accrue interest after the Purchase Date;
(e) that Holders electing to have a Note purchased pursuant to such
Asset Sale Offer shall be required to surrender the Note at least three
Business Days before the Purchase Date with the form entitled "Option of
Holder to Elect Purchase" on the reverse of the Note completed, to the
Issuer, a depositary, if appointed by the Issuer, or a Paying Agent at the
address specified in the notice;
(f) that Holders shall be entitled to withdraw their election if the
Issuer, depositary or Paying Agent, as the case may be, receives, not later
than the expiration of the Offer Period, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of the Note the Holder delivered for purchase and a statement that
such Holder is withdrawing his or her election to have the Note purchased;
(g) that, if the aggregate principal amount of Notes surrendered by
Holders exceeds the Offer Amount, the Issuer shall select the Notes to be
purchased on a pro rata basis (with such adjustments as may be deemed
appropriate by the Issuer so that only Notes in denominations of $1,000, or
integral multiples thereof, shall be purchased); and
(h) that Holders whose Notes were purchased only in part shall be
issued new Notes equal in principal amount to the unpurchased portion of
the Notes surrendered.
Any Holder may at any time elect to deliver to the Trustee written
instructions (each a "Standing Instruction") stating that such Holder desires to
participate in any Asset Sale Offer by tendering the maximum permitted number of
such Holder's Notes for repurchase in such Asset Sale Offer. Upon receipt of
such Standing Instruction, the Trustee shall deem the maximum permitted number
of such Holder's Notes tendered upon the commencement of any Asset Sale Offer.
The issuing Holder may withdraw such Standing Instruction at any time prior to
the expiration of an Offer Period by so notifying the Trustee in writing. Each
Holder electing not to deliver a Standing Instruction shall respond to the
notice of an Asset Sale Offer, as set forth in this Section 3.09, prior to the
termination of the Offer Period.
On or before the Purchase Date, the Issuer shall, to the extent
lawful, accept for payment, on a pro rata basis to the extent necessary, the
Offer Amount of Notes or portions thereof tendered pursuant to the Asset Sale
Offer, or, if less than the Offer Amount has been tendered, all Notes, and
deliver to the Trustee an Officers' Certificate stating that such Notes or
portions thereof were accepted for
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payment by the Issuer in accordance with the terms of this Section 3.09. The
Issuer, depositary or Paying Agent, as the case may be, shall promptly (but
in any case not later than five days after the Purchase Date) mail or deliver
(or wire, if requested by a Holder in advance) to each tendering Holder an
amount equal to the purchase price of the Note tendered by such Holder and
accepted by the Issuer for purchase, and the Issuer shall promptly issue a
new Note, and the Trustee shall authenticate and mail or deliver such new
Note to such Holder equal in principal amount to any unpurchased portion of
the Note surrendered. Any Note not so accepted shall be promptly mailed or
delivered by the Issuer to the Holder thereof. The Issuer shall publicly
announce the results of the Asset Sale Offer on the Purchase Date. In the
event that the aggregate amount of Asset Sale Proceeds or net cash proceeds
of Indebtedness incurred pursuant to Section 4.14(i) exceeds the aggregate
principal amount of Notes surrendered by Holders thereof pursuant to such
Asset Sale Offer the Issuer may use the remaining Asset Sale Proceeds or net
cash proceeds of Indebtedness in accordance with the terms of this Indenture.
If the aggregate principal amount of Notes surrendered by Holders thereof
exceeds the amount of Asset Sale Proceeds or net cash proceeds of
Indebtedness incurred pursuant to Section 4.14(i), the Trustee shall select
the Notes to be purchased on a pro rata basis. Upon completion of an Asset
Sale Offer, the amount of Asset Sale Proceeds or net cash proceeds of
Indebtedness shall be deemed to be reset at zero.
Other than as specifically provided in this Section 3.09, any purchase
pursuant to this Section 3.09 shall be made pursuant to the provisions of
Sections 3.01 through 3.06 hereof.
Whenever any Asset Sale Proceeds or net cash proceeds of Indebtedness
incurred pursuant to Section 4.14(i) are received by the Issuer such Asset Sale
Proceeds or net cash proceeds of Indebtedness will be set aside in the Asset
Sale Account pending allocation of such Asset Sale Proceeds or net cash proceeds
of Indebtedness pursuant to this Section 3.09.
ARTICLE 4
COVENANTS
SECTION 4.01. PAYMENT OF PRINCIPAL AND INTEREST.
The Issuer shall pay the principal of and interest on the Notes in
accordance with the terms, and on the dates set forth in, this Indenture and the
Notes.
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SECTION 4.02. MAINTENANCE OF OFFICE OR AGENCY.
The Issuer shall maintain in the City of Philadelphia, Pennsylvania an
office or agency where Notes may be presented for registration of transfer or
exchange of Notes and where notices and demands to or upon the Issuer in respect
of the Notes and this Indenture may be served. The Issuer will give prompt
written notice to the Trustee of any change in the location of such office or
agency. If at any time the Issuer shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the address thereof,
such presentations, notices and demands may be made or served at the Corporate
Trust Office of the Trustee, and, in such event, the Trustee shall act as the
Issuer's agent to receive all such presentations, notices and demands.
The Issuer may also from time to time designate one or more other
offices or agencies (in or outside the City of Philadelphia, Pennsylvania) where
the Notes may be presented for any or all such purposes and may from time to
time rescind such designations; PROVIDED, HOWEVER, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
an office or agency in the City of Philadelphia, Pennsylvania for the purposes
set forth in Section 2.03 and for such other purposes. The Issuer will give
prompt written notice to the Trustee of any such designation or rescission and
of any change in the location of any such other office or agency.
SECTION 4.03. OFFICERS' AND ACCOUNTANTS' CERTIFICATES
AS TO COMPLIANCE.
To the extent not otherwise required pursuant to Section 4.09, the
Issuer shall deliver to the Trustee, within 90 days after the end of each Fiscal
Year commencing with the 1995 Fiscal Year an Officers' Certificate stating that
in the course of the performance by each signer of such signer's duties as an
Officer of the Issuer such signer would normally have knowledge of the Issuer's
and the Subsidiaries' compliance with the covenants contained in Sections 4.01
and 4.02 and 4.04 to 4.19 and the other covenants and conditions applicable to
the Issuer or any Subsidiary set forth in this Indenture, stating whether or not
such signer has knowledge of any Default in such compliance (such compliance
having been determined without regard to any period of grace or requirement of
notice provided under this Indenture) and, if so, specifying each such Default
of which such signer has knowledge and the nature thereof and what action the
Issuer proposes to take in connection thereto. For purposes of this Section
4.03, one of the signatories of such Officers' Certificate shall be one of the
principal executive officer, the principal financial officer or the principal
accounting officer of the Issuer.
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The Issuer will also deliver to the Trustee the certificates of
accountants required pursuant to Section 4.09.
SECTION 4.04. CONDUCT OF BUSINESS.
Subject to the terms and conditions hereof the Issuer and each
Subsidiary shall (a) conduct its business in a manner consistent with the terms
and provisions of the Plan and this Indenture; (b) use its reasonable efforts,
in the ordinary course and consistent with past practice, to (i) preserve its
business and the goodwill and (ii) keep available the services and goodwill of
its present employees; and (c) preserve all registered patents, trademarks,
trade names, copyrights and service marks with respect to its business.
SECTION 4.05. PAYMENT OF TAXES, ETC.
(a) The Issuer and each Subsidiary shall pay and discharge before the
same shall become delinquent, all lawful claims, taxes, assessments and
governmental charges or levies, except where contested in good faith, by proper
proceedings, and where adequate reserves therefor have been established on the
books of the Issuer or such Subsidiary in conformity with GAAP.
(b) In connection with this Indenture, the Issuer and each Subsidiary
shall comply with all withholding and reporting requirements imposed by federal,
state and local tax authorities and all distributions under this Indenture shall
be subject to such withholding and reporting requirements.
SECTION 4.06. MAINTENANCE OF INSURANCE.
The Issuer and each Subsidiary shall maintain insurance with
responsible and reputable insurance companies or associations in such amounts
and covering such risks as is usually and customarily carried by companies
engaged in similar businesses and owning similar properties in the same general
areas in which the Issuer or such Subsidiary operates; PROVIDED, HOWEVER, that
the Issuer or such Subsidiary shall not be required to maintain earthquake
insurance. If requested by the Required Holders or the Trustee, the Issuer or
such Subsidiary shall have all such insurance policies name the Collateral Agent
as additional insured or loss payee. The Issuer or such Subsidiary will furnish
to the Trustee or the Collateral Agent from time to time such information as may
be reasonably requested as to such insurance by the Trustee or the Collateral
Agent.
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SECTION 4.07. PRESERVATION OF EXISTENCE, ETC.
The Issuer and each Subsidiary shall preserve and maintain its
existence, rights and franchises, except as permitted under Article 5, if the
failure to so preserve or maintain, either individually or in the aggregate,
would cause a Material Adverse Effect.
SECTION 4.08. MAINTENANCE OF PROPERTIES, ETC.
The Issuer and each Subsidiary shall maintain and preserve (i) in good
working order and condition all of its properties which are used or useful or
necessary in the conduct of its business, and (ii) all rights, remedies,
permits, licenses, guaranties, collateral, insurance, approvals and privileges
which are used or useful or necessary in the conduct of its business, if the
failure to maintain and preserve such rights, remedies, permits, licenses,
guaranties, collateral, insurance, approvals and privileges, either individually
or in the aggregate, would cause a Material Adverse Effect.
SECTION 4.09. FINANCIAL STATEMENTS.
To the extent not otherwise required by Section 4.03, the Issuer shall
furnish to the Holders and the Trustee in the case of clauses (a) through (c)
below, and to any prospective purchaser of the Notes in the case of clause (d)
below:
(a) as soon as available and in any event within 45 days after the
end of each of the first three Fiscal Quarters in each Fiscal Year, a
consolidated income statement, a consolidated statement of shareholders' equity,
a consolidated statement of cash flows, a consolidated statement of deferred and
capitalized interest for the period from the beginning of the current Fiscal
Year to the end of such Fiscal Quarter, and a consolidated balance sheet as at
the end of such Fiscal Quarter, setting forth in each case in comparative form
figures for the corresponding period in the preceding Fiscal Year, certified by
the chief financial officer of the Issuer, together with (i) a certificate of
said officer stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, a statement as to the nature thereof and the action which the Issuer
proposes to take with respect thereto, (ii) a schedule of the computations used
by the Issuer in determining compliance with Section 4.12, (iii) a written
discussion and analysis by the management of the Issuer of the consolidated
financial statements furnished in respect of such Fiscal Quarter, and (iv) a
certificate demonstrating the calculation of Available Cash, including, without
limitation, the minimum dividend distribution required to maintain the status of
the Issuer as a REIT;
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(b) as soon as available and in any event within 90 days after the
end of each Fiscal Year, a consolidated balance sheet of the Issuer as of the
end of such year and a consolidated statement of income, retained earnings and
cash flows of the Issuer and its Subsidiaries all of which are prepared in
accordance with GAAP and certified without qualifications as to the scope of the
audit or otherwise and without any disclaimer by Ernst & Young or other
independent certified public accountants of recognized national standing
acceptable to the Trustee, together with (i) a certificate of such accounting
firm stating that in the course of the regular audit of the business of the
Issuer and the Subsidiaries, which audit was conducted by such accounting firm
in accordance with generally accepted auditing standards, such accounting firm
has obtained no knowledge that a Default or Event of Default has occurred and is
continuing, or, if in the opinion of such accounting firm a Default or Event of
Default has occurred and is continuing, a statement as to the nature thereof,
(ii) a schedule in form satisfactory to the Trustee of the computations used by
such accounting firm in determining, as of the end of such Fiscal Year, the
Issuer's compliance with Section 4.12, (iii) a certificate of the chief
financial officer stating deferred and capitalized interest for the Fiscal Year
and an "Agreed Upon Procedures" report by the Issuer's independent public
accounting firm stating that such accounting firm has no knowledge of any
material error in the information set forth in the certificate, and (iv) a
written discussion and analysis by the management of the Issuer of the
consolidated financial statements furnished in respect of such Fiscal Year;
(c) as soon as available and, in any event, within 120 days from and
after the end of a Fiscal Year, a copy of the management letter required to be
provided to the Issuer by its independent certified public accountants which
refers in whole or in part to any inadequacy, defect, problem, qualification or
other lack of fully satisfactory accounting controls utilized by the Issuer; and
(d) upon the request of the Required Holders, to any prospective
purchaser of any Notes, all information that may be required to be delivered to
such purchaser to enable any Holder to sell to such purchaser its Notes without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144A under the Securities Act, as such Rule may be amended
from time to time, or (b) any similar rule or regulation hereafter adopted by
the SEC subject to receipt of an appropriate confidentiality agreement from such
prospective purchasers in form and substance reasonably satisfactory to the
Issuer (with appropriate exceptions to permit resale); PROVIDED, HOWEVER, upon
the request of the Required Holders, the Issuer shall deliver to the Required
Holders a written statement as to whether it has complied with such
requirements.
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SECTION 4.10. NEW REAL ESTATE, ETC.
If the Issuer or any Subsidiary acquires any Real Estate, Underlying
Promissory Notes, Underlying Mortgages or underlying leases through foreclosure
or otherwise, not subject to a Lien in favor of the Trustee or the Collateral
Agent, the Issuer or such Subsidiary shall, as a condition to the effectiveness
of any such acquisition, execute, deliver and record a first priority or the
next highest available priority Mortgage or equivalent security instrument, in
favor of the Collateral Agent on behalf and for the ratable benefit of the
Holders, covering such Real Estate, Underlying Promissory Notes, Underlying
Mortgages or underlying leases, in form and substance satisfactory to the
Trustee and the Collateral Agent, and provide the Collateral Agent with
financing statements, and, upon the acquisition of Real Estate or an Underlying
Mortgage, a title insurance policy in an amount equal to the acquisition price
of such Real Estate or Underlying Mortgage insuring (a) the Issuer's or such
Subsidiary's fee title to such Real Estate and including a current ALTA survey
thereof, if required, with a surveyor's certificate in form and substance
satisfactory to the Trustee and the Collateral Agent or (b) the enforceability
and validity of such Underlying Mortgage according to the terms and conditions
of an ALTA Lender's policy. Notwithstanding the foregoing, prior to the
acquisition or obtaining control of any Real Estate, the Issuer or such
Subsidiary shall obtain an appropriate environmental audit or environmental
survey.
SECTION 4.11. DEPOSIT OF ASSET SALE PROCEEDS.
All Cash Asset Sale Proceeds shall be deposited in the Asset Sales
Account immediately upon receipt by the Issuer or any Subsidiary or their
agent. All non-Cash Asset Sale Proceeds shall be delivered immediately to the
Collateral Agent upon receipt by the Issuer or any Subsidiary or their agent and
shall be pledged to the Collateral Agent for the ratable benefit of the Holders
to secure the Obligations of the Issuer under this Indenture and the Notes
pursuant to a pledge agreement in form and substance satisfactory to the
Trustee. When the aggregate amount of Asset Sale Proceeds exceeds $10 million,
the Issuer will be required to apply all such Asset Sale Proceeds to an Asset
Sale Offer in accordance with the procedures set forth in Section 3.09 hereof.
The Cash Asset Sale Proceeds shall be distributed to the Holders in accordance
with Section 3.09. Any Cash Asset Sale Proceeds not so distributed to Holders
shall be returned to the Issuer.
SECTION 4.12. LIMITATION ON INVESTMENTS.
The Issuer shall not, nor shall it permit any Subsidiary to, directly
or indirectly, make any Investment from and after the Effective Date except:
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(a) Investments which constitute leasing commissions and tenant
improvements, related to the ownership and maintenance of a parcel or parcels of
Real Estate in an amount not to exceed by more than 10% the amount of such
commissions or improvements set forth in a budget approved by the Board of
Trustees of the Issuer (as the same may be amended from time to time with the
consent of the Board of Trustees of the Issuer);
(b) with any Asset Sale Proceeds that are not applied to the then
outstanding Notes in accordance with Section 3.09 hereof, new loans to non-
Affiliates or new equity Investments, in each case approved by the Board of
Trustees;
(c) Investments approved by the Board of Trustees of the Issuer of
Available Cash in Cash Equivalents;
(d) Investments approved by the Board of Trustees of the Issuer
created by the Issuer or any Subsidiary as a result of any sale, refinancing or
disposition of assets when the Issuer or such Subsidiary accepts in partial
payment of an outstanding obligation a new mortgage or equity interest in the
same property; and
(e) Investments approved by the Board of Trustees of the Issuer in
Subsidiaries formed or maintained pursuant to Section 4.18; PROVIDED, HOWEVER,
that the Stock of any such new Subsidiary is pledged to the Collateral Agent for
the ratable benefit of the Holders in accordance with Section 4.18.
SECTION 4.13. LIENS, ETC.
The Issuer shall not, nor shall it permit any Subsidiary to, create or
suffer to exist any Lien upon or with respect to any of its properties, whether
owned by the Issuer or such Subsidiary as at the Effective Date or thereafter
acquired, or assign any right to receive income, except:
(a) Liens directly or indirectly created in favor of the Holders
pursuant to this Indenture, the Plan and the Collateral Documents;
(b) any Lien securing the renewal, extension or refunding of any
Indebtedness or other obligation secured by any Lien permitted by subsection (a)
of this Section 4.13 without any increase in the amount secured thereby or in
the assets subject to such Liens;
(c) Liens arising by operation of law in favor of materialmen,
mechanics, warehousemen, carriers, lessors or other similar Persons incurred by
the Issuer or such Subsidiary in the ordinary course of business which secure
its obligations to such Person; PROVIDED, HOWEVER, that the Issuer or such
Subsidiary
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(i) is not in default in respect of such payment obligation to such Person or
(ii) is in default with respect to such payment obligation but is, in good
faith and by appropriate proceedings, diligently contesting such obligation
and adequate provision is made for the payment thereof and such default,
either individually or in the aggregate, would not cause a Material Adverse
Effect;
(d) Liens (excluding Environmental Liens) securing taxes,
assessments or governmental charges or levies; PROVIDED, HOWEVER, that the
Issuer or such Subsidiary (i) is not in default in respect of any payment
obligation with respect thereto or (ii) is in default in respect of such payment
obligation but is in good faith and by appropriate proceedings diligently
contesting such obligation and adequate provision is made for the payment
thereof and such default, either individually or in the aggregate, would not
cause a Material Adverse Effect;
(e) Liens incurred or pledges and deposits made in the ordinary
course of business in connection with workers' compensation, unemployment
insurance, old-age pensions and other social security benefits;
(f) Liens securing the performance of operating leases,
contracts (other than for the repayment of borrowed money), statutory
obligations, and other obligations of like nature, incurred as an incident to
and in the ordinary course of business, and judgment liens which do not cause
individually or in the aggregate, a Material Adverse Effect, and do not
constitute a Default or an Event of Default;
(g) zoning restrictions, easements, licenses, reservations,
restrictions on the use of real property or minor irregularities incident
thereto which do not cause, individually or in the aggregate, a Material Adverse
Effect;
(h) Liens in favor of landlords securing operating leases
permitted by Section 4.15;
(i) Liens existing on the Effective Date;
(j) Environmental Liens which do not cause, individually or in
the aggregate, a Material Adverse Effect;
(k) Liens relating to Indebtedness incurred to finance the
purchase price of property but only to the extent (x) of the value of the
property acquired and (y) such Lien does not extend to or cover any other
property other than such property, improvements thereon and any proceeds
therefrom; and
(l) Liens securing Indebtedness permitted by Section 4.14(i).
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SECTION 4.14. INDEBTEDNESS.
The Issuer shall not, directly or indirectly, and will not, directly or
indirectly, permit any Subsidiary to, incur, create, assume or suffer to exist
any Indebtedness, except:
(a) Indebtedness represented by the Notes;
(b) Contingent Obligations constituting endorsements for
collection or deposit in the ordinary course of business;
(c) current liabilities in respect of taxes, assessments and
governmental charges or levies incurred, or claims for labor, materials,
inventory, services, supplies and rentals incurred, or for goods or services
purchased, in the ordinary course of business consistent with the past practice
of the Issuer or such Subsidiary;
(d) Indebtedness arising under any performance bond
reimbursement obligation entered into in the ordinary course of business of the
Issuer or such Subsidiary consistent with the past practice of the Issuer or
such Subsidiary;
(e) unimpaired indemnification claims under the declaration of
trust of the Issuer;
(f) Indebtedness arising in connection with Subsidiaries formed
or maintained pursuant to Section 4.18;
(g) the First Lien Debt;
(h) Indebtedness incurred to finance the purchase price of
property; PROVIDED, HOWEVER, that such Indebtedness shall be non-recourse to the
Issuer or such Subsidiary; and
(i) additional secured Indebtedness of the Issuer; PROVIDED,
HOWEVER, that (i) 100% of the net cash proceeds of such Indebtedness, after
deducting all expenses related thereto, shall be applied to the repayment of the
Notes in accordance with Section 3.09, and (ii) the interest rate payable in
respect of such Indebtedness shall be lower than the interest rate then payable
in respect of the Notes; and, PROVIDED, FURTHER, that if such interest rate is
not a fixed rate of interest, the Issuer shall have entered into an interest
rate agreement or other contractual arrangement concurrently with the incurrence
of such Indebtedness the economic effect of which shall be that such floating
interest rate over the life of such Indebtedness shall be lower than the
interest rate then payable in respect of the Notes.
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SECTION 4.15. LEASE OBLIGATIONS.
(a) The Issuer shall not, nor shall it permit any Subsidiary to,
create or suffer to exist any obligations as lessee (i) for the rental or hire
of real or personal property in connection with any sale and leaseback
transaction, or (ii) for the rental or hire of real or personal property of any
kind under other leases or agreements to lease having an original term of one
year or more which would cause the direct or contingent liabilities of the
Issuer or such Subsidiary in respect of all such obligations to be increased by
more than $100,000 payable in any period of 12 consecutive months over the
amount existing on the Effective Date.
(b) The Issuer shall not, nor shall it permit any Subsidiary to,
become or remain liable as lessee or guarantor or other surety with respect to
any lease, whether an operating lease or a capitalized lease, of any property
(whether real or personal or mixed), whether owned as at the Effective Date or
acquired thereafter, which the Issuer or such Subsidiary has sold or transferred
as of the Effective Date or thereafter.
SECTION 4.16. RESTRICTED PAYMENTS.
The Issuer shall not (a) declare or make any dividend payment or other
distribution of assets, properties, Cash, rights, obligations or securities on
account of or in respect of any of its Common Shares or any Preferred Stock
which may be issued by the Issuer, other than such declaration and making of
dividend payments that the Issuer deems necessary to preserve its status as a
REIT, unless the Consolidated Net Worth of the Issuer at the time of such
payment and after giving effect thereto is at least $50 million; PROVIDED,
HOWEVER, that the Issuer shall in no event declare or make any such dividend
payment or other distribution if a Default or Event of Default has occurred and
is continuing, or (b) purchase, redeem or otherwise acquire for value its Common
Shares or any Preferred Stock of the Issuer, whether outstanding on the
Effective Date or thereafter issued and outstanding, unless the Consolidated Net
Worth of the Issuer at the time of such purchase, redemption or other
acquisition and after giving effect thereto is at least $50 million; PROVIDED,
HOWEVER, that the Issuer shall in no event make any such purchase, redemption or
other acquisition if a Default or Event of Default has occurred and is
continuing.
SECTION 4.17. TRANSACTIONS WITH AFFILIATES.
The Issuer shall not, nor shall it permit any Subsidiary to: (a) make
any Investment in an Affiliate; (b) transfer, sell, lease, assign or otherwise
dispose of any assets to any such Affiliate; (c) merge into or consolidate with
or purchase or acquire assets from any Affiliate; (d) repay any Indebtedness to
any Affiliate (except
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under existing retirement or deferred compensation plans); or (e) enter into
any other transaction directly or indirectly with or for the benefit of any
such Affiliate (including, without limitation, guaranties and assumptions of
obligations of any such Affiliate) except for (i) transactions in the
ordinary course of business on a basis no less favorable to the Issuer or
such Subsidiary as would be obtained in a comparable arm's length transaction
with a Person which is not an Affiliate, (ii) compensation to trustees
commensurate with current compensation levels, (iii) salaries and other
employee compensation and benefits to officers of the Issuer or such
Subsidiary commensurate with the compensation levels in effect as of the date
hereof as may reasonably be adjusted over time but in no event to exceed 10%
annually in the aggregate, (iv) any transaction required or otherwise
permitted by the Plan or this Indenture, and (v) transactions with respect to
Subsidiaries pursuant to Section 4.12, 4.14 or 4.18 hereof.
SECTION 4.18. NEW SUBSIDIARIES.
The Issuer shall not incorporate or otherwise organize any Subsidiary
after the date hereof, except wholly owned Subsidiaries organized for the
special purpose of taking title to (i) a mortgage or equivalent security then
held by the Issuer or acquired in connection with property held by the Issuer
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 equivalent
security then held by the Issuer or acquired in connection with property held by
the Issuer for the purpose of holding and operating such Real Estate in such
Subsidiary; PROVIDED, HOWEVER, that the Issuer complies with the provisions of
the Collateral Documents; and, PROVIDED, FURTHER, that (x) any such Subsidiary
shall be subject to and bound by the provisions of Sections 4.04 through 4.18 of
this Indenture as if it were a party hereto, and (y) the Stock of any such
Subsidiary shall be pledged to Wilmington Trust Company, as collateral agent for
the ratable benefit of the Holders as security for the Obligations of the Issuer
under this Indenture and the Notes pursuant to a pledge agreement in form and
substance satisfactory to the Trustee.
SECTION 4.19. OFFER TO REPURCHASE UPON CHANGE OF CONTROL.
(a) Unless waived by the Required Holders, upon the occurrence of a
Change of Control, the Issuer shall make an offer (the "Change of Control
Offer") to each Holder of Notes to repurchase all or any part (equal to $1,000
or an integral multiple thereof) of such Holder's Notes at a purchase price
equal to 100% of the aggregate principal amount thereof plus accrued and unpaid
interest, if any, to the date of purchase (the "Change of Control Payment").
Within 45 days following any Change of Control, the Issuer shall mail a notice
to the Trustee and each Holder stating: (1) that the Change of Control Offer is
being made pursuant to this Section
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and that all Notes tendered will be accepted for payment; (2) the purchase
price and the purchase date, which shall be no earlier than 30 days nor later
than 45 days from the date such notice is mailed (the "Change of Control
Payment Date"); (3) that any Note not tendered shall continue to accrue
interest in accordance with its terms; (4) that, unless the Issuer defaults
in the payment of the Change of Control Payment, all Notes accepted for
payment pursuant to the Change of Control Offer shall cease to accrue
interest after the Change of Control Payment Date; (5) that Holders electing
to have any Notes purchased pursuant to a Change of Control Offer will be
required to surrender the Notes, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Notes completed, to the Paying Agent at
the address specified in the notice prior to the close of business on the
third Business Day preceding the Change of Control Payment Date; (6) that
Holders will be entitled to withdraw their election if the Paying Agent
receives, not later than the close of business on the second Business Day
preceding the Change of Control Payment Date, a telegram, telex, facsimile
transmission or letter setting forth the name of the Holder, the principal
amount of Notes delivered for purchase, and a statement that such Holder is
withdrawing his election to have such Notes purchased; and (7) that Holders
whose Notes are being purchased only in part will be issued new Notes equal
in principal amount to the unpurchased portion of the Notes surrendered,
which unpurchased portion must be equal to $1,000 in principal amount or an
integral multiple thereof. The Issuer shall comply with the requirements of
Rule 14e-1 under the Exchange Act and any other securities laws and
regulations thereunder to the extent such laws and regulations are applicable
in connection with the repurchase of the Notes in connection with a Change of
Control.
(b) On the Change of Control Payment Date, the Issuer shall, to the
extent lawful, (1) accept for payment Notes or portions thereof tendered
pursuant to the Change of Control Offer, (2) deposit with the Paying Agent an
amount equal to the Change of Control Payment in respect of all Notes or
portions thereof so tendered and (3) deliver or cause to be delivered to the
Trustee the Notes so accepted together with an Officers' Certificate stating the
Notes or portions thereof tendered to the Issuer. The Paying Agent shall
promptly mail to each Holder of Notes so accepted payment in an amount equal to
the purchase price for such Notes, and the Trustee shall promptly authenticate
and mail to each Holder a new Note equal in principal amount to any unpurchased
portion of the Notes surrendered, if any; PROVIDED, HOWEVER, that each such new
Note shall be in a principal amount of $1,000 or an integral multiple thereof.
The Issuer will publicly announce the results of the Change of Control Offer on
or as soon as practicable after the Change of Control Payment Date.
(c) The Trustee shall be under no obligation to ascertain the
occurrence of a Change in Control or to give notice with respect thereto other
than upon receipt of the written notice of Change in Control from the Issuer.
The Trustee
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may conclusively assume, in the absence of written notice to the contrary
from the Issuer or any Holder, that no Change in Control has occurred.
(d) Except as described above with respect to a Change of Control,
the Issuer shall not be required to repurchase or redeem the Notes from the
Holders of the Notes in the event of a takeover, recapitalization or similar
transaction.
ARTICLE 5
SUCCESSORS
SECTION 5.01. MERGER, CONSOLIDATION, OR SALE OF ASSETS.
The Issuer shall not consolidate or merge with or into (whether or not
the Issuer is the surviving entity), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets in one
or more related transactions to, another Person unless (a) the Issuer is the
surviving entity, or the Person formed by or surviving any such consolidation or
merger (if other than the Issuer) or to which such sale, assignment, transfer,
lease, conveyance or other disposition shall have been made is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia, (b) the Person formed by or surviving any such
consolidation or merger (if other than the Issuer), or the Person to which such
sale, assignment, transfer, lease, conveyance or other disposition shall have
been made, assumes, pursuant to a supplemental indenture and appropriate
collateral documents in forms reasonably satisfactory to the Trustee, all of the
obligations of the Issuer under the Notes and this Indenture and all the
obligations of the Issuer under the Collateral Documents, (c) immediately before
and immediately after giving effect to such transaction no Default or Event of
Default exists, and (d) the Issuer or the Person formed by or surviving any such
consolidation or merger, or to which such sale, assignment, transfer, lease,
conveyance or other disposition shall have been made after giving pro forma
effect thereto as of the end of the most recently completed Fiscal Quarter shall
have a Consolidated Net Worth equal to or greater than the Consolidated Net
Worth of the Issuer immediately preceding the transaction.
The Issuer shall deliver to the Trustee prior to the consummation of
the proposed transaction an Officers' Certificate to the foregoing effect and an
Opinion of Counsel stating that the proposed transaction and such supplemental
indenture comply with this Section 5.01. The Trustee shall be entitled to rely
conclusively upon such Officers' Certificate and Opinion of Counsel.
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SECTION 5.02. SUCCESSOR ENTITY SUBSTITUTED.
Upon any consolidation or merger, or any sale, lease, conveyance or
other disposition of all or substantially all of the assets of the Issuer in
accordance with Section 5.01 hereof, the successor entity formed by such
consolidation or into or with which the Issuer is merged or to which such sale,
lease, conveyance or other disposition is made shall succeed to, and be
substituted for (so that from and after the date of such consolidation, merger,
sale, lease, conveyance or other disposition, the provisions of this Indenture
and the Collateral Documents referring to the Issuer shall refer instead to the
successor entity and not to the Issuer), and may exercise every right and power
of the Issuer under this Indenture and the Collateral Documents with the same
effect as if such successor Person has been named as the Issuer, herein and
therein, and the Issuer will be discharged from all obligations under this
Indenture, the Notes and the Collateral Documents.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. EVENTS OF DEFAULT.
Each of the following events (whatever the reason for such event)
constitutes an "Event of Default":
(a) The Issuer shall fail to make any payment in respect of principal
of the Notes or under Section 3.09 or 4.19 of this Indenture when the same
becomes due and payable and such failure continues for a period of 5
Business Days after the due date of such payment, or the Issuer shall fail
to make any payment when due of interest on the Notes and such failure
continues for a period of 10 days after the due date of such payment; or
(b) Any representation or warranty made or deemed made by the Issuer
or any Subsidiary (or any of their officers) under the Disclosure Statement
or the Collateral Documents shall prove to have been untrue or incorrect in
any material respect when made or deemed made; or
(c) The Issuer (or the Issuer or any Subsidiary in the case of the
Collateral Documents) shall fail to perform or observe (i) any term,
covenant or agreement contained in Article 4 (other than Section 4.07) or
Article 5 or (ii) any other term, covenant or agreement contained in this
Indenture, the Plan or the Collateral Documents, if such failure under this
clause (ii) shall remain unremedied for 30 days after the earlier of the
date on which (A) an Officer of the Issuer becomes aware of such failure or
(B) written notice thereof shall have been given to the Issuer by the
Trustee or the Holders; or
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(d) The Issuer or any Subsidiary shall fail, after any applicable
grace period, to pay any principal of or premium, if any, or interest on
any of its Indebtedness in an amount exceeding $1,000,000 (excluding the
Notes), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise); or any
other event shall occur or condition shall exist under any agreement or
instrument relating to any such Indebtedness, if the effect of such event
or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or any such Indebtedness shall be declared
to be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the stated maturity thereof; or
(e) The Issuer or any Material Subsidiary of the Issuer shall
generally not pay its debts as such debts become due except such debts that
are the subject of a good faith dispute, or shall admit in writing its
inability to pay its debts generally, or shall make a general assignment
for the benefit of creditors, or any proceeding shall be instituted by or
against the Issuer or such Material Subsidiary seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its
debts under any law relating to bankruptcy, insolvency or reorganization or
relief of debtors, or seeking the entry of an order for relief or the
appointment of a receiver, trustee or other similar official for it or for
any substantial part of its property and, in the case of any such
proceedings instituted against the Issuer or such Material Subsidiary (but
not instituted by it), either such proceedings shall remain undismissed or
unstayed for a period of 30 days or any of the actions sought in such
proceedings shall occur; or the Issuer or such Material Subsidiary shall
take any action to authorize any of the actions set forth above in this
subsection (e); or
(f) Any judgment or order for the payment of money in excess of
$1,000,000 shall be rendered against the Issuer or any Subsidiary and
either (i) enforcement proceedings shall have been commenced by any
creditor upon such judgment or order, or (ii) there shall be any period of
ten consecutive days during which a stay of enforcement of such judgment or
order, by reason of a pending appeal or otherwise, shall not be in effect;
or
(g) Except for releases of Collateral pursuant to Asset Sales
effected in accordance with Section 4.11, this Indenture or the Collateral
Documents shall, for any reason, cease to create a valid Lien on Collateral
having a value of $1,000,000 or more purported to be covered thereby, or
such Lien shall cease to have the priority Lien status initially granted
and be a perfected Lien as to Collateral having a value of $1,000,000 or
more.
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SECTION 6.02. ACCELERATION.
If an Event of Default (other than an Event of Default specified in
clause (e) of Section 6.01 hereof) occurs and is continuing, the Trustee by
notice to the Issuer may, or upon written notice from the Required Holders
shall, or the Required Holders by written notice to the Issuer and the Trustee
may, declare all the Notes to be due and payable immediately. Upon such
declaration, the principal of, premium, if any, and interest on the Notes shall
be due and payable immediately. If an Event of Default specified in clause (e)
of Section 6.01 hereof occurs, such an amount shall ipso facto become and be
immediately due and payable without any declaration or other act on the part of
the Trustee or any Holder. The Required Holders by written notice to the
Trustee may on behalf of all of the Holders rescind an acceleration and its
consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default (except nonpayment of principal, interest
or premium that has become due solely because of the acceleration) have been
cured or waived.
SECTION 6.03. OTHER REMEDIES.
If an Event of Default occurs and is continuing, the Trustee and/or
the Collateral Agent, as applicable, may pursue any available remedy (under this
Indenture, the Collateral Documents or otherwise) to collect the payment of
principal and interest on the Notes or to enforce the performance of any
provision of the Notes, this Indenture or the Collateral Documents.
The Trustee or the Collateral Agent may maintain a proceeding even if
it does not possess any of the Notes or does not produce any of them in the
proceeding. A delay or omission by the Trustee, the Collateral Agent or any
Holder of a Note in exercising any right or remedy accruing upon an Event of
Default shall not impair the right or remedy or constitute a waiver of or
acquiescence in the Event of Default. All remedies are cumulative to the extent
permitted by law.
SECTION 6.04. WAIVER OF PAST DEFAULTS.
The Required Holders by notice to the Trustee may on behalf of the
Holders of all of the Notes waive an existing Default or Event of Default and
its consequences under this Indenture, except a continuing Default or Event of
Default in the payment of the principal of or interest on the Notes. Upon any
such waiver, such Default shall cease to exist, and any Event of Default arising
therefrom shall be deemed to have been cured for every purpose of this Indenture
and the Collateral Documents; but no such waiver shall extend to any subsequent
or other Default or Event of Default.
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SECTION 6.0 DIRECTION BY REQUIRED HOLDERS.
The Required Holders may direct the time, method and place of
conducting any proceeding for exercising any remedy available to the Trustee
and/or the Collateral Agent or exercising any trust or power conferred on it or
them. However, the Trustee and/or the Collateral Agent may refuse to follow any
direction that conflicts with the law, this Indenture or the Collateral
Documents, that the Trustee and/or the Collateral Agent determines may be unduly
prejudicial to the rights of other Holders of Notes or that may involve the
Trustee and/or the Collateral Agent in personal liability.
SECTION 6.06. LIMITATION ON SUITS.
A Holder of a Note may pursue a remedy with respect to this Indenture
or the Notes only if:
(a) the Holder of a Note gives to the Trustee and the Collateral
Agent written notice of a continuing Event of Default;
(b) the Required Holders make a written request to the Trustee
and the Collateral Agent to pursue the remedy;
(c) such Holder of a Note or Holders of Notes offer and, if
requested, provide to the Trustee and the Collateral Agent indemnity
satisfactory to the Trustee and the Collateral Agent against any loss,
liability or expense;
(d) the Trustee and the Collateral Agent do not comply with the
request within 60 days after receipt of the request and the offer and, if
requested, the provision of indemnity; and
(e) during such 60-day period the Required Holders do not give
the Trustee and the Collateral Agent a direction inconsistent with the
request.
A Holder of a Note may not use this Indenture to prejudice the rights of another
Holder of a Note or to obtain a preference or priority over another Holder of a
Note.
SECTION 6.07. RIGHTS OF HOLDERS OF NOTES TO RECEIVE PAYMENT.
Notwithstanding any other provision of this Indenture, the right of
any Holder of a Note to receive payment of principal and interest on the Note,
on or after
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the respective due dates expressed in the Note, or to bring suit for the
enforcement of any such payment on or after such respective dates, shall not
be impaired or affected without the consent of the Holder, except that no
Holder shall have the right to institute any such suit if and to the extent
that the institution or prosecution thereof or the entry of judgment therein
would under applicable law result in the surrender, impairment, waiver or
loss of the Liens pursuant to the Collateral Documents upon any property
subject to such Liens.
SECTION 6.08. COLLECTION SUIT.
If an Event of Default specified in Section 6.01(a) hereof occurs and
is continuing, the Trustee and/or the Collateral Agent are authorized to recover
judgment in its own name and as trustee of an express trust against the Issuer
for the whole amount of principal of and interest remaining unpaid on the Notes
and interest on overdue principal and, to the extent lawful, interest and such
further amount as shall be sufficient to cover the costs and expenses of
collection, including the reasonable compensation, expenses, disbursements and
advances of the Trustee, the Collateral Agent and their respective agents and
counsel.
SECTION 6.09. PROOFS OF CLAIM.
The Trustee and/or the Collateral Agent are authorized to file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Collateral Agent (including
any claim for the reasonable compensation, expenses, disbursements and advances
of the Trustee, the Collateral Agent, and their respective agents and counsel)
and the Holders of the Notes allowed in any judicial proceedings relative to the
Issuer (or any other obligor upon the Notes), the Issuer's creditors or the
Issuer's property and shall be entitled and empowered to collect, receive and
distribute any money or other property payable or deliverable on any such claims
and any custodian in any such judicial proceeding is hereby authorized by each
Holder of a Note to make such payments to the Trustee and the Collateral Agent,
and in the event that the Trustee and the Collateral Agent shall consent to the
making of such payments directly to the Holders of the Notes, to pay to the
Trustee and the Collateral Agent any amount due to it for the reasonable
compensation, expenses, disbursements and advances of the Trustee, the
Collateral Agent, and their respective agents and counsel, and any other amounts
due the Trustee and the Collateral Agent under Section 7.07 hereof. To the
extent that the payment of any such compensation, expenses, disbursements and
advances of the Trustee, the Collateral Agent, or their respective agents and
counsel, and any other amounts due the Trustee and the Collateral Agent under
Section 7.07 hereof out of the estate in any such proceeding, shall be denied
for any reason, payment of the same shall be secured by a Lien on, and shall be
paid out of, any and
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all distributions, dividends, money, securities and other properties which
the Holders of the Notes may be entitled to receive in such proceeding
whether in liquidation or under any plan of reorganization or arrangement or
otherwise. Nothing herein contained shall be deemed to authorize the Trustee
or the Collateral Agent to authorize or consent to or accept or adopt on
behalf of any Holder of a Note any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder of
a Note thereof, or to authorize the Trustee or the Collateral Agent to vote
in respect of the claim of any Holder of a Note in any such proceeding.
SECTION 6.10. PRIORITIES.
If the Trustee or the Collateral Agent collects any money pursuant to
this Article, it shall pay out the money in the following order:
FIRST: to the Trustee, the Collateral Agent and their respective
agents and attorneys for amounts due under Section 7.07 hereof, including
payment of all compensation, expense and liabilities incurred, and all advances
made, by the Trustee and/or the Collateral Agent and the costs and expenses of
collection;
SECOND: to Holders of Notes for amounts due and unpaid on the Notes
for principal and interest, ratably, without preference or priority of any kind,
according to the amounts due and payable on the Notes for principal and
interest, respectively;
THIRD: without duplication, to Holders for any other Obligations
owing to the Holders under this Indenture, the Notes or the Collateral
Documents; and
FOURTH: to the Issuer or to such party as a court of competent
jurisdiction shall direct.
The Trustee may fix a record date and payment date for any payment to
Holders of Notes pursuant to this Section 6.10.
SECTION 6.11. UNDERTAKING FOR COSTS.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee and/or the Collateral Agent for any
action taken or omitted by it as a Trustee, a court in its discretion may
require the filing by any party litigant in the suit of an undertaking to pay
the costs of the suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in the
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply
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to a suit by the Trustee, a suit by a Holder of a Note pursuant to Section
6.06 hereof, or a suit by Holders of more than 10% in principal amount of the
then outstanding Notes.
SECTION 6.12. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case the Issuer, the
Trustee and the Holders will, subject to any determination in such proceeding,
be restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Holder will continue
as though no such proceeding had been instituted.
ARTICLE 7
TRUSTEE
SECTION 7.01. DUTIES OF TRUSTEE.
(a) If an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent person would exercise or use under the circumstances in the conduct of
his or her own affairs.
(b) Except during the continuance of an Event of Default:
(i) the duties of the Trustee shall be determined solely by the
express provisions of this Indenture and the Collateral Documents and the
Trustee undertakes to perform only those duties that are specifically set
forth in this Indenture and no others, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon certificates or opinions furnished to
the Trustee, and conforming to the requirements of this Indenture.
However, the Trustee shall examine the certificates and opinions to
determine whether or not they conform to the requirements of this
Indenture, if any.
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(c) The Trustee may not be relieved from liabilities for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(i) this paragraph does not limit the effect of paragraph (b) of
this Section 7.01;
(ii) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it is proved that the
Trustee was negligent in ascertaining the pertinent facts; and
(iii) the Trustee shall not be liable with respect to any action
it takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05 hereof.
(d) Whether or not therein expressly so provided, every
provision of this Indenture that in any way relates to the Trustee is subject to
paragraphs (a), (b) and (c) of this Section 7.01.
(e) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or incur any liability. The Trustee shall be under
no obligation to exercise any of its rights and powers under this Indenture at
the request of any Holders of Notes, unless such Holder shall have offered to
the Trustee security and indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Issuer.
Money held in trust by the Trustee need not be segregated from other funds
except to the extent required by law.
SECTION 7.02. RIGHTS OF TRUSTEE.
(a) The Trustee may conclusively rely upon any document believed
by it to be genuine and to have been signed or presented by the proper Person.
The Trustee need not investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may
require an Officers' Certificate or an Opinion of Counsel or both. The Trustee
shall not be liable for any action it takes or omits to take in good faith in
reliance on such Officers' Certificate or Opinion of Counsel. The Trustee may
consult with counsel, accountants and other experts and the written advice of
such counsel, accountants and other experts or any Opinion of Counsel shall be
full and complete authorization and
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protection from liability in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance thereon.
(c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.
(d) The Trustee shall not be liable for any action it takes or
omits to take in good faith which it believes to be authorized or within its
rights or powers conferred upon it by this Indenture or the Collateral
Documents.
(e) Unless otherwise specifically provided in this Indenture,
any demand, request, direction or notice from the Issuer shall be sufficient if
signed by an Officer of the Issuer.
(f) The Trustee shall be under no obligation to exercise any of
the rights or powers vested in it by this Indenture at the request or direction
of any of the Holders unless such Holders shall have offered to each of the
Trustee and the Collateral Agent reasonable security or indemnity against the
costs, expenses and liabilities that might be incurred by it in compliance with
such request or direction.
(g) Without limitation and notwithstanding any other provision
herein, the Trustee (i) shall not be required to take any action regarding any
Real Estate, including, without limitation, foreclosure or other action
(collectively, a "Foreclosure Action"), which could result in the Trustee being
deemed to be an "operator" under CERCLA (as defined in the definition of
"Hazardous Substance"), if in the reasonable judgment of the Trustee by taking
such action it would incur unacceptable environmental liability, and (ii) shall
have the right, prior to taking any Foreclosure Action with respect to any Real
Estate, to obtain a "Phase One" or other environmental report concerning such
Real Estate prepared by a consultant of its choice and to be reimbursed for the
reasonable cost thereof pursuant to Section 7.07 hereof, if, in its reasonable
judgment, such report is necessary in order to assess the matters described in
clause (i) hereof. In making an evaluation described under clause (i) of the
preceding sentence, the Trustee shall assess its potential liability as compared
to the indemnity available pursuant to Section 7.07 hereof, or from any Holder
pursuant to Section 7.01(e) and/or 7.02(f) hereof.
SECTION 7.03. INDIVIDUAL RIGHTS OF TRUSTEE.
The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Issuer or any
Affiliate of the Issuer with the same rights it would have if it were not the
Trustee. However, in the event that the Trustee acquires any conflicting
interest it must eliminate such
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conflict within 90 days, apply to the SEC for permission to continue as
trustee or resign. Any Agent may do the same with like rights and duties.
The Trustee is also subject to Sections 7.10 and 7.11 hereof, as specified
therein, of this Indenture.
SECTION 7.04. DISCLAIMER.
The Trustee shall not be responsible for and makes no representation
as to the validity or adequacy of this Indenture or of the Notes, it shall not
be accountable for the Issuer's use of the proceeds from the Notes or any money
paid to the Issuer or upon the Issuer's direction under any provision of this
Indenture, it shall not be responsible for the use or application of any money
received by any Paying Agent other than itself, and it shall not be responsible
for any statement or recital herein or any statement in the Notes or any other
document in connection with the sale of the Notes or pursuant to this Indenture
other than its certificate of authentication. The Trustee makes no
representation as to the validity, value or condition of any property covered or
intended to be covered by the Lien of the Collateral Documents or any part
thereof or as to the title of the Issuer or any Subsidiary to such property or
as to the security afforded by the Collateral Documents or hereby.
SECTION 7.05. NOTICE OF DEFAULTS.
If a Default or Event of Default occurs and is continuing and if it
is known to a Responsible Officer of the Trustee and/or the Collateral Agent,
the Trustee and/or the Collateral Agent shall promptly notify the other, and
the Trustee shall mail to Holders of Notes a notice of the Default or Event
of Default within 30 days after it occurs. Notwithstanding anything
contained in TIA Section 315(b) to the contrary, the Trustee shall not
withhold any such notice.
SECTION 7.06. REPORTS BY TRUSTEE TO HOLDERS OF THE NOTES.
Within 60 days after each January 1 beginning with the January 1
following the Issue Date, the Trustee shall mail to the Holders of the Notes
a brief report dated as of such reporting date that complies with TIA Section
313(a) (but if no event described in TIA Section 313(a) has occurred within
the twelve months preceding the reporting date, no report need be
transmitted). The Trustee shall, within 90 days thereof, and in compliance
with TIA Section 313(b), notify the Holders of the Notes in the event of (1)
the release, or release and substitution, of any collateral pursuant to
Section 10.03 or 10.04 hereof (and the consideration therefor, if any) the
fair value of which equals or exceeds 10% of the principal amount of the
Notes outstanding at the time of such release or (2) the character and amount
of any advances made by it since
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the date of the last report transmitted pursuant to TIA Section 313(a) (or if
no such report has yet been so transmitted, since the date hereof), for the
reimbursement of which it may claim a lien or charge higher than that of the
Notes, the aggregate amount of which at any time exceeds 10% of the principal
amount of the Notes outstanding at such time. The Trustee also shall comply
with TIA Section 313(b)(2). The Trustee shall also transmit by mail all
reports as required by TIA Section 313(c).
A copy of each report at the time of its mailing to the Holders of
Notes shall be mailed to the Issuer and filed with the SEC and each stock
exchange, if any, on which the Notes are listed, in accordance with TIA
Section 313(d). The Issuer shall promptly notify the Trustee when the Notes
are listed on any stock exchange.
SECTION 7.07. COMPENSATION AND INDEMNITY.
The Issuer shall pay to the Trustee from time to time reasonable
compensation for its acceptance of this Indenture and services hereunder. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Issuer shall reimburse the Trustee promptly
upon request for all reasonable disbursements, advances and expenses incurred or
made by it in addition to the compensation for its services. Such expenses
shall include the reasonable compensation, disbursements and expenses of the
Trustee's agents and counsel.
The Issuer shall indemnify and hold harmless the Trustee against any
and all losses, liabilities or expenses incurred by it arising out of or in
connection with the acceptance or administration of its duties under this
Indenture without negligence or bad faith on its part, including, but not
limited to, all losses, liabilities or expenses arising in connection with the
release or presence of any Hazardous Substance at or from the Real Estate
whether foreseeable or unforeseeable, regardless of the source of such release
or when such release occurred or such presence is discovered. The foregoing
indemnity includes, without limitation, all costs of removal, remediation of any
kind, and disposal of such Hazardous Substances (whether or not such Hazardous
Substances may be legally allowed to remain in the Real Estate if removal or
remediation is prudent), after a foreclosure, the cost of determining whether
the Real Estate that was the subject of the foreclosure is in compliance and
causing such Real Estate to be in compliance with all applicable Environmental
Laws, and the Trustee's reasonable attorneys' and consultants' fees and court
costs relating thereto. The Trustee shall notify the Issuer promptly of any
claim for which it may seek indemnity. Failure by the Trustee to so notify the
Issuer shall not relieve the Issuer of its obligations hereunder. The Issuer
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Issuer shall pay the reasonable fees
and expenses of such counsel.
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The Issuer need not pay for any settlement made without its consent, which
consent shall not be unreasonably withheld.
The obligations of the Issuer under this Section 7.07 shall survive
the satisfaction and discharge of this Indenture.
To secure the Issuer's payment obligations in this Section, the
Trustee shall have a Lien prior to the Notes on all money or property held or
collected by the Trustee, except that held in trust to pay principal and
interest on particular Notes. Such Lien shall survive the satisfaction and
discharge of this Indenture.
When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(e) hereof occurs, the expenses and the
compensation for the services (including the fees and expenses of its agents and
counsel) are intended to constitute expenses of administration under any
Bankruptcy Law.
SECTION 7.08. REPLACEMENT OF TRUSTEE.
A resignation or removal of the Trustee and appointment of a successor
Trustee shall become effective only upon the successor Trustee's acceptance of
appointment as provided in this Section.
The Trustee may resign in writing at any time and be discharged from
the trust hereby created by so notifying the Issuer. The Holders of a majority
in principal amount of the then outstanding Notes may remove the Trustee by so
notifying the Trustee and the Issuer in writing. The Issuer may remove the
Trustee if:
(a) the Trustee fails to comply with Section 7.10 hereof;
(b) the Trustee is adjudged a bankrupt or an insolvent or an
order for relief is entered with respect to the Trustee under any
Bankruptcy Law;
(c) a Custodian or public officer takes charge of the Trustee or
its property; or
(d) the Trustee becomes incapable of acting.
If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Issuer shall promptly appoint a successor
Trustee. Within one year after the successor Trustee takes office, the Holders
of a majority in
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principal amount of the then outstanding Notes may appoint a successor
Trustee to replace the successor Trustee appointed by the Issuer.
If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Issuer, or the
Holders of at least 10% in principal amount of the then outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.
If the Trustee after written request by any Holder of a Note who has
been a Holder of a Note for at least six months fails to comply with Section
7.10 hereof, such Holder of a Note may petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
Trustee.
A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Issuer. Thereupon, the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of such
succession to Holders of the Notes. The retiring Trustee shall promptly
transfer all property held by it as Trustee to the successor Trustee provided
all sums owing to the retiring Trustee hereunder have been paid and subject to
the Lien provided for in Section 7.07 hereof. Notwithstanding replacement of
the Trustee pursuant to this Section, the Issuer's obligations under Section
7.07 hereof shall continue for the benefit of the retiring Trustee.
SECTION 7.09. SUCCESSOR TRUSTEE BY MERGER, ETC.
If the Trustee consolidates, merges or converts into, or transfers all
or substantially all of its corporate trust business to, another corporation,
the successor corporation or association without any further act shall be the
successor Trustee.
SECTION 7.10. ELIGIBILITY; DISQUALIFICATION.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States of
America or of any state thereof authorized under such laws to exercise corporate
trust powers, shall be subject to supervision or examination by federal or state
authority and shall have a combined capital and surplus of at least $100 million
as set forth in its most recent published annual report of condition.
This Indenture shall always have a Trustee who satisfies the
requirements of TIA Sections 310(a)(1), (2) and (5). The Trustee is subject
to TIA Section 310(b).
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SECTION 7.11. PREFERENTIAL COLLECTION OF
CLAIMS AGAINST ISSUER.
The Trustee is subject to TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has
resigned or been removed shall be subject to TIA Section 311(a) to the extent
indicated therein.
ARTICLE 8
DEFEASANCE
SECTION 8.01. OPTION TO EFFECT DEFEASANCE.
The Issuer may, at the option of its Board of Trustees evidenced by a
resolution set forth in an Officers' Certificate, at any time, with respect to
the Notes, elect to have Section 8.02 hereof be applied to all outstanding Notes
upon compliance with the conditions set forth below in this Article Eight.
SECTION 8.02. DEFEASANCE AND DISCHARGE.
Upon the Issuer's exercise under Section 8.01 hereof of the option
applicable to this Section 8.02, the Issuer shall be deemed to have been
discharged from its obligations with respect to all outstanding Notes on the
date the conditions set forth below (including Section 8.03) are satisfied
(hereinafter, "Defeasance"). For this purpose, such Defeasance means that the
Issuer shall be deemed to have paid and discharged the entire Indebtedness
represented by the outstanding Notes, which shall thereafter be deemed to be
"outstanding" only for the purposes of Section 8.04 hereof and the other
Sections of this Indenture referred to in (a) and (b) of this Section 8.02, and
to have satisfied all its other obligations under such Notes and this Indenture
(and the Trustee, on demand of and at the expense of the Issuer, shall execute
proper instruments acknowledging the same), except for the following which shall
survive until otherwise terminated or discharged hereunder: (a) the rights of
Holders of outstanding Notes to receive solely from the trust fund described in
Section 8.03 hereof, and as more fully set forth in such Section, payments in
respect of the principal of and interest on such Notes when such payments are
due, (b) the Issuer's obligations with respect to such Notes under Sections
2.04, 2.06, 2.07, 2.10 and 4.02 hereof, (c) the rights, powers, trusts, duties
and immunities of the Trustee hereunder and the Issuer's obligations in
connection therewith, and (d) this Article Eight.
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SECTION 8.03. CONDITIONS TO DEFEASANCE.
The following shall be the conditions to the application of Section
8.02 hereof to the outstanding Notes:
(a) the Issuer shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 7.10 hereof who shall agree to comply with the provisions of
this Article Eight applicable to it) as trust funds in trust for the
purpose of making the following payments, specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Notes,
(i) Cash in an amount or (ii) non-callable Governmental Securities which
through the scheduled payment of principal and interest in respect thereof
in accordance with their terms will provide, not later than one day before
the due date of any payment under the Notes, Cash in an amount, or (iii) a
combination thereof, in such amounts, as will be sufficient to pay and
discharge and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge (A) the principal of and interest on the
outstanding Notes on the stated maturity or on the applicable redemption
date, as the case may be, and (B) any mandatory sinking fund payments or
analogous payments applicable to the outstanding Notes on the day on which
such payments are due and payable in accordance with the terms of this
Indenture and of such Notes; provided that the Trustee shall have been
irrevocably instructed to apply such money or the proceeds of such non-
callable Governmental Securities to said payments with respect to the
Notes;
(b) no Default or Event of Default with respect to the Notes
shall have occurred and be continuing on the date of such deposit;
(c) such Defeasance shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other agreement or
instrument to which the Issuer is a party or by which the Issuer is bound;
(d) the Issuer shall have delivered to the Trustee an Officers'
Certificate stating that the deposit made by the Issuer pursuant to its
election under Section 8.02 hereof was not made by the Issuer with the
intent of preferring the Holders over other creditors of the Issuer or with
the intent of defeating, hindering, delaying or defrauding creditors of the
Issuer or others;
(e) the Issuer shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to the Defeasance under Section 8.02 have
been complied with as contemplated by this Section 8.03;
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(f) the Issuer shall have delivered to the Trustee an Opinion of
Counsel reasonably acceptable to the Trustee confirming that (i) the Issuer
has received from, or there has been published by, the Internal Revenue
Service a ruling or (ii) since the date hereof, there has been a change in
the applicable federal income tax law, in either case to the effect that,
and based thereon such Opinion of Counsel shall confirm that, the Holders
of the outstanding Notes will not recognize income, gain or loss for
federal income tax purposes as a result of such Defeasance and will be
subject to federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if such Defeasance had not
occurred; and
(g) the Issuer shall have delivered to the Trustee an Opinion of
Counsel to the effect that such deposit would not constitute a preference
as defined in Section 547 of the Bankruptcy Code, and the trust funds would
not constitute property included within the estate of the debtor.
SECTION 8.04. DEPOSITED MONEY AND GOVERNMENTAL
SECURITIES TO BE HELD IN TRUST;
OTHER MISCELLANEOUS PROVISIONS.
Subject to Section 8.05 hereof, all money and Governmental Securities
(including the proceeds thereof) deposited with the Trustee (or other qualifying
trustee, collectively for purposes of this Section 8.04, the "Trustee") pursuant
to Section 8.03 hereof in respect of the outstanding Notes shall be held in
trust and applied by the Trustee, in accordance with the provisions of such
Notes and this Indenture, to the payment, either directly or through any Paying
Agent (including the Issuer acting as Paying Agent) as the Trustee may
determine, to the Holders of such Notes of all sums due and to become due
thereon in respect of principal and interest, but such money need not be
segregated from other funds except to the extent required by law.
The Issuer shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the cash or Governmental Securities
deposited pursuant to Section 8.03 hereof or the principal and interest received
in respect thereof other than any such tax, fee or other charge which by law is
for the account of the Holders of the outstanding Notes.
Anything in this Article Eight to the contrary notwithstanding, the
Trustee shall deliver or pay to the Issuer from time to time upon the request of
the Issuer any money or Governmental Securities held by it as provided in
Section 8.03 hereof which, in the opinion of a nationally recognized firm of
independent public accountants expressed in a written certification thereof
delivered to the Trustee, are in
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excess of the amount thereof which would then be required to be deposited to
effect an equivalent Defeasance.
SECTION 8.05. REPAYMENT TO ISSUER.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Issuer, in trust for the payment of the principal of or interest on any
Note and remaining unclaimed for two years after such principal or interest has
become due and payable shall be paid to the Issuer on its request or (if then
held by the Issuer) shall be discharged from such trust; and the Holder of such
Note shall thereafter, as a general unsecured creditor, look only to the Issuer
for payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Issuer, as trustees
thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Issuer cause to be published once, in the New York Times and The
Wall Street Journal (national edition), notice that such money remains unclaimed
and that, after a date specified therein, which shall not be less than 30 days
from the date of such notification or publication, any unclaimed balance of
money then remaining will be repaid to the Issuer.
SECTION 8.06. REINSTATEMENT.
If the Trustee or Paying Agent is unable to apply any Cash or
Governmental Securities in accordance with Section 8.02 hereof, as the case may
be, by reason of any order or judgment of any court or governmental authority
enjoining, restraining or otherwise prohibiting such application, then the
Issuer's obligations under this Indenture and the Notes shall be revived and
reinstated as though no deposit had occurred pursuant to Section 8.02 hereof
until such time as the Trustee or Paying Agent is permitted to apply all such
money in accordance with Section 8.02 hereof, as the case may be; PROVIDED,
HOWEVER, that, if the Issuer makes any payment of principal or interest on any
Note following the reinstatement of its obligations, the Issuer shall be
subrogated to the rights of the Holders of such Notes to receive such payment
from the money held by the Trustee or Paying Agent.
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ARTICLE 9
AMENDMENT, SUPPLEMENT AND WAIVER
SECTION 9.01. WITHOUT CONSENT OF HOLDERS OF NOTES.
Notwithstanding Section 9.02 hereof, the Issuer and the Trustee may
amend or supplement this Indenture and the Notes without the consent of any
Holder of a Note:
(a) to cure any ambiguity, defect or inconsistency;
(b) to provide for uncertificated Notes in addition to or in
place of certificated Notes;
(c) to provide for (i) the assumption of the Issuer's
obligations to the Holders of the Notes in the case of a merger or
consolidation pursuant to Article 5 hereof, and (ii) certain amendments to
the Collateral Documents expressly called for therein pursuant to Section
10.01 hereof;
(d) to execute and deliver any documents necessary or
appropriate to release Liens on any Collateral as permitted by Section
10.03 or 10.04 hereof;
(e) to make any change that would provide any additional rights
or benefits to the Holders of the Notes or that does not materially
adversely affect the legal rights hereunder of any Holder of the Notes; or
(f) to comply with requirements of the SEC in order to effect or
maintain the qualification of this Indenture under the TIA.
Upon the request of the Issuer accompanied by a resolution of the
Board of Trustees of the Issuer authorizing the execution of any such amended or
supplemental Indenture, and upon receipt by the Trustee of the documents
described in Section 9.06 hereof, the Trustee shall join with the Issuer in the
execution of any amended or supplemental Indenture authorized or permitted by
the terms of this Indenture and to make any further appropriate agreements and
stipulations which may be therein contained, but the Trustee shall not be
obligated to enter into any such amended or supplemental Indenture which affects
its own rights, duties or immunities under this Indenture, the Collateral
Documents or otherwise. The Issuer shall give the Holders of the Notes notice
of the effectiveness of any amendment under this Section 9.01.
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SECTION 9.02. WITH CONSENT OF HOLDERS OF NOTES.
The Issuer and the Trustee may amend or supplement this Indenture, the
Notes, or any amended or supplemental Indenture with the written consent of the
Required Holders (including consents obtained in connection with a tender offer
or exchange offer for the Notes), and any existing Default or Event of Default
and its consequences or compliance with any provision of this Indenture or the
Notes may be waived with the consent of the Required Holders (including consents
obtained in connection with a tender offer or exchange offer for the Notes).
Upon the request of the Issuer accompanied by a resolution the Board
of Trustees of the Issuer authorizing the execution of any such amended or
supplemental Indenture, and upon the filing with the Trustee of evidence
satisfactory to the Trustee of the consent of the Required Holders as aforesaid,
and upon receipt by the Trustee of the documents described in Section 9.06
hereof, the Trustee shall join with the Issuer in the execution of such amended
or supplemental Indenture unless such amended or supplemental Indenture affects
the Trustee's own rights, duties or immunities under this Indenture, or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such amended or supplemental Indenture.
After an amendment, supplement or waiver under this Section becomes
effective, the Issuer shall mail to the Holders of Notes affected thereby a
notice briefly describing the amendment, supplement or waiver. Any failure of
the Issuer to mail such notice, or any defect therein, shall not, however, in
any way impair or affect the validity of any such amended or supplemental
Indenture or waiver. Subject to Sections 6.04 and 6.07 hereof, the Required
Holders may waive compliance in a particular instance by the Issuer with any
provision of this Indenture or the Notes. However, without the consent of each
Holder affected, an amendment or waiver may not (with respect to any Notes held
by a nonconsenting Holder of Notes):
(a) reduce the principal amount of Notes whose Holders must
consent to an amendment, supplement or waiver;
(b) reduce the principal of or change the fixed maturity of any
Note or reduce the redemption price of the Notes;
(c) reduce the rate of or change the time for payment of
interest on any Note;
(d) waive a Default or Event of Default in the payment of
principal of or interest on the Notes (except a rescission of acceleration
of the Notes by the Required Holders and a waiver of the payment default
that resulted from such acceleration);
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(e) make any Note payable in money other than that stated in the
Notes;
(f) make any change in the provisions of this Indenture relating
to waivers of past Defaults or the rights of Holders of Notes to receive
payments of principal of or interest on the Notes;
(g) directly or indirectly release Liens on all or substantially
all of the Collateral except in connection with a merger, consolidation or
disposition of assets permitted under this Indenture;
(h) make any change in the foregoing amendment and waiver
provision; or
(i) waive a redemption payment with respect to any Note.
SECTION 9.03. COMPLIANCE WITH TRUST INDENTURE ACT.
Every amendment or supplement to this Indenture or the Notes shall be
set forth in an amended or supplemental Indenture that complies with the TIA as
then in effect.
SECTION 9.04. REVOCATION AND EFFECT OF CONSENTS.
Until an amendment, supplement or waiver becomes effective, a consent
to it by a Holder of a Note is a continuing consent by the Holder of a Note and
every subsequent Holder of a Note or portion of a Note that evidences the same
debt as the consenting Holder's Note, even if notation of the consent is not
made on any Note. However, any such Holder of a Note or subsequent Holder of a
Note may revoke the consent as to its Note if the Trustee receives written
notice of revocation before the date the waiver, supplement or amendment becomes
effective. An amendment, supplement or waiver becomes effective in accordance
with its terms and thereafter binds every Holder of a Note.
The Issuer may fix a record date for determining which Holders of the
Notes must consent to such amendment, supplement or waiver. If the Issuer fixes
a record date, the record date shall be fixed at (i) the later of 30 days prior
to the first solicitation of such consent or the date of the most recent list of
Holders of Notes furnished to the Trustee prior to such solicitation pursuant to
Section 2.05 hereof or (ii) such other date as the Issuer shall designate.
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SECTION 9.05. NOTATION ON OR EXCHANGE OF NOTES.
The Trustee may place an appropriate notation about an amendment,
supplement or waiver on any Note thereafter authenticated. The Issuer in
exchange for all Notes may issue and the Trustee shall authenticate new Notes
that reflect the amendment, supplement or waiver.
Failure to make the appropriate notation or issue a new Note shall not
affect the validity and effect of such amendment, supplement or waiver.
SECTION 9.06. TRUSTEE TO SIGN AMENDMENTS, ETC.
The Trustee shall sign any amended or supplemental Indenture
authorized pursuant to this Article 9 if the amendment or supplement does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
The Issuer may not sign an amendment or supplemental Indenture until its Board
of Trustees approves it. In signing or refusing to sign such amendment or
supplemental Indenture, the Trustee shall be entitled to receive, if requested,
an indemnity reasonably satisfactory to it and to receive and, subject to
Section 7.01 hereof, shall be fully protected in relying upon, an Officers'
Certificate and an Opinion of Counsel as conclusive evidence that such amendment
or supplemental Indenture is authorized or permitted by this Indenture, that it
is not inconsistent herewith, and that it will be valid and binding upon the
Issuer in accordance with its terms.
ARTICLE 10
COLLATERAL AND SECURITY
SECTION 10.01. COLLATERAL DOCUMENTS.
The due and punctual payment of the principal of and interest on the
Notes when and as the same shall be due and payable, whether on an interest
payment date or a principal amortization date, at maturity, by acceleration,
repurchase, redemption or otherwise, and interest on the overdue principal of
and interest (to the extent permitted by law), if any, on the Notes and
performance of all other obligations of the Issuer to the Holders of Notes, the
Trustee or the Collateral Agent under this Indenture, the Collateral Documents
and the Notes, according to the terms hereunder or thereunder, shall be secured
as provided in the Collateral Documents which the Issuer and the Subsidiaries
have entered into simultaneously with the execution of this Indenture. Each
Holder of Notes, by its acceptance thereof, consents and agrees to the terms of
the Collateral Documents (including, without limitation, the provisions
providing for foreclosure and release of Collateral) as the same may be in
effect or may be amended from time to time in accordance with its
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terms and authorizes and directs the Collateral Agent to enter into the
Collateral Documents and to perform its obligations and exercise its rights
thereunder in accordance therewith. The Issuer shall deliver to the Trustee
copies of all Collateral Documents, and, subject to the provisions of the
Collateral Documents, shall do or cause to be done all such acts and things
as may be necessary or proper, or as may be required by the provisions of the
Collateral Documents, to assure and confirm to the Trustee the security
interest in the Collateral contemplated hereby, by the Collateral Documents
or any part thereof, as from time to time constituted, so as to render the
same available for the security and benefit of this Indenture and the Notes
secured hereby, according to the intent and purposes herein expressed. The
Issuer shall take, or shall cause the Subsidiaries to take, upon request of
the Trustee, any and all actions reasonably required to cause the Collateral
Documents to create and maintain, as security for the Obligations of the
Issuer hereunder, a valid and enforceable perfected first priority Lien in
and on all of the Collateral, in favor of the Collateral Agent for the
benefit of the Trustee, the Collateral Agent and the Holders of Notes, (a)
superior to and prior to the rights of all third Persons other than those
holding the First Lien Debt, and (b) subject to no Liens other than the Liens
permitted under Section 4.13 hereof.
SECTION 10.02. RECORDING AND OPINIONS.
(a) The Issuer shall furnish to the Trustee, promptly following
the execution and delivery of this Indenture, an Opinion of Counsel either
(i) stating that in the opinion of such counsel all action has been taken with
respect to the recording, registering and filing of this Indenture, the
Mortgages, the Assignments of Leases, the Collateral Assignments of Mortgages,
the Collateral Assignments of Leases and Uniform Commercial Code financing
statements necessary to make effective and perfect the Lien intended to be
created by the Collateral Documents, and reciting with respect to the security
interests in the Collateral, the details of such action, or (ii) stating that,
in the opinion of such counsel, no such action is necessary to make such Lien
effective.
(b) The Issuer shall furnish to the Trustee within three months
after each anniversary of the Issue Date an Opinion of Counsel, dated as of such
date, either (i) (A) stating that, in the opinion of such counsel, action has
been taken with respect to the recording, registering, filing, re-recording,
re-registering and refiling of all supplemental indentures, mortgages, financing
statements, continuation statements or other instruments of further assurance as
is necessary to maintain the Lien of the Collateral Documents and reciting with
respect to the security interests in the Collateral the details of such action
or referring to prior Opinions of Counsel in which such details are given, and
(B) stating that, based on relevant laws as in effect on the date of such
Opinion of Counsel, all financing statements and continuation statements have
been executed and filed that are necessary as of such date and during the
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succeeding 12 months fully to preserve and protect, to the extent such
protection and preservation are possible by filing, the rights of the Holders of
Notes, the Trustee and the Collateral Agent hereunder and under the Collateral
Documents with respect to the security interests in the Collateral, or
(ii) stating that, in the opinion of such counsel, no such action is necessary
to maintain such Lien and assignment.
SECTION 10.03. RELEASE OF COLLATERAL.
(a) Subject to subsections (b) and (d) of this Section 10.03,
Collateral may be released from the Lien and security interest created by the
Collateral Documents at any time or from time to time in accordance with the
provisions of the Collateral Documents.
(b) No Collateral shall be released from the Lien and security
interest created by the Collateral Documents pursuant to the provisions of the
Collateral Documents or hereof unless the Issuer shall have made an Asset Sale
Offer in accordance with Section 3.09 hereof.
(c) Notwithstanding any of the terms hereof or of any of the
Collateral Documents, at any time when an Event of Default shall have occurred
and be continuing and the maturity of the Notes shall have been accelerated
(whether by declaration or otherwise), the Collateral Agent shall not, without
the consent of the Required Holders, release any Collateral pursuant to the
provisions hereof or any of the Collateral Documents.
(d) The release of any Collateral from the terms of this
Indenture and the Collateral Documents shall not be deemed to impair the
security under this Indenture in contravention of the provisions hereof if
and to the extent the Collateral is released pursuant to the terms hereof.
To the extent applicable, the Issuer shall cause TIA Section 314(d) relating
to the release of property or securities from the Lien and security interest
of the Collateral Documents and relating to the substitution therefor of any
property or securities to be subjected to the Lien and security interest of
the Collateral Documents to be complied with. Any certificate or opinion
required by TIA Section 314(d) may be made by an Officer of the Issuer except
in cases where TIA Section 314(d) requires that such certificate or opinion
be made by an independent Person, which Person shall be an independent
engineer, appraiser or other expert selected or approved by the Trustee or
the Collateral Agent in the exercise of reasonable care.
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SECTION 10.04. CERTIFICATES OF THE ISSUER.
The Issuer shall furnish to the Trustee and the Collateral
Agent, prior to each proposed release of Collateral pursuant to the Collateral
Documents or this Indenture, (i) all documents required by Section 314(d) of the
TIA and (ii) an Opinion of Counsel to the effect that such accompanying
documents constitute all documents required by Section 314(d) of the TIA. The
Trustee may, to the extent permitted by Sections 7.01 and 7.02 hereof, accept as
conclusive evidence of compliance with the foregoing provisions the appropriate
statements contained in such documents and such Opinion of Counsel.
SECTION 10.05. AUTHORIZATION OF ACTIONS TO BE TAKEN BY
THE COLLATERAL AGENT UNDER THE COLLATERAL
DOCUMENTS.
Subject to the provisions of Sections 7.01 and 7.02 hereof, the
Trustee may, in its sole discretion and without the consent of the Holders of
Notes, on behalf of the Holders of Notes, direct the Collateral Agent to take
all actions it deems necessary or appropriate in order to (a) enforce any of the
terms of the Collateral Documents and (b) collect and receive any and all
amounts payable in respect of the Obligations of the Issuer hereunder or under
the Collateral Documents. The Trustee and the Collateral Agent shall have power
to institute and maintain such suits and proceedings and enter into such
agreements as either may deem expedient to prevent any impairment of the
Collateral by any acts that may be unlawful or in violation of the Collateral
Documents or this Indenture, and such suits, proceedings and agreements as the
Trustee or the Collateral Agent may deem expedient to preserve or protect its
interests and the interests of the Holders of Notes in the Collateral (including
power to institute and maintain suits or proceedings to restrain the enforcement
of or compliance with any legislative or other governmental enactment, rule or
order that may be unconstitutional or otherwise invalid if the enforcement of,
or compliance with, such enactment, rule or order would impair the security
interest hereunder or be prejudicial to the interests of the Trustee, the
Collateral Agent or the Holders of Notes).
SECTION 10.06. AUTHORIZATION OF RECEIPT OF FUNDS BY THE
TRUSTEE UNDER THE COLLATERAL DOCUMENTS.
The Trustee shall cause the Collateral Agent to deliver to the Trustee
and the Trustee is authorized to receive any funds for the benefit of the
Holders of Notes distributed under the Collateral Documents, and to make further
distributions of such funds to the Holders of Notes according to the provisions
of this Indenture and the Collateral Documents.
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SECTION 10.07. TERMINATION OF SECURITY INTEREST.
Upon the full and final payment of all Obligations of the Issuer under
this Indenture, the Notes and the Collateral Documents (including an effective
defeasance pursuant to Section 8.02 hereof), the Trustee shall, at the request
of the Issuer, release the Liens pursuant to this Indenture. If the Trustee or
Paying Agent is unable to apply any United States Dollars or Governmental
Securities in accordance with Section 8.02 hereof by reason of any order or
judgment of any court or Governmental Authority enjoining, restraining or
otherwise prohibiting such application, then the Trustee shall cause the
Collateral Agent to cause the Liens to be revived and reinstated as though no
deposit had occurred pursuant to Section 8.02 hereof until such time as the
Trustee or Paying Agent is permitted to apply all such money in accordance with
Section 8.02 hereof.
SECTION 10.08. COLLATERAL AGENT'S DUTIES.
The Collateral Agent, acting in its capacity as such, shall have only
such duties with respect to the Collateral as are set forth in the Collateral
Documents.
ARTICLE 11
GUARANTEE OF NOTES
SECTION 11.01. UNCONDITIONAL GUARANTEE.
Subject to the provisions of this Article 11 the Guarantors, jointly
and severally, hereby unconditionally guarantee to each Holder of a Note
authenticated and delivered by the Trustee, and to the Trustee, the due and
punctual payment of the principal of and interest on such Note, when and as the
same shall become due and payable, whether by declaration thereof or otherwise,
in accordance with the terms of such Note and of this Indenture. The Guarantors
hereby agree that their obligations hereunder shall be absolute and
unconditional, irrespective of, and shall be unaffected by, any invalidity,
irregularity or unenforceability of any such Note or this Indenture, any failure
to enforce the provisions of any such Note or this Indenture, any waiver,
modification or indulgence granted to the Issuer with respect thereto, by the
holder of such Note or the Trustee, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantors hereby waive diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, the benefit of
discussion, protest or notice with respect to any such Note or the Indebtedness
evidenced thereby and all demands whatsoever, and covenant that this Guarantee
will not be discharged as to any such Note except by payment in full of the
principal of and interest thereon.
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The Guarantors shall be subrogated to all rights of the Holder of any
Notes against the Issuer in respect of any amounts paid to the Holder by the
Guarantors pursuant to the provisions of this Guarantee; PROVIDED, HOWEVER, that
the Guarantors shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal of
and interest on all Notes shall have been paid in full.
The Guarantees set forth in this Section 11.01 shall not be valid or
become obligatory for any purpose with respect to a Note until the certificate
of authentication on such Note shall have been signed by or on behalf of the
Trustee.
SECTION 11.02. CONTRIBUTION.
If any Guarantor shall have paid more than its pro rata share pursuant
to this Article 11, then such Guarantor (a "Funding Guarantor") shall be
entitled to a contribution from all other Guarantors in a PRO RATA amount based
on the Adjusted Net Assets of each Guarantor (including the Funding Guarantor)
for all payments, damages and expenses incurred by such Funding Guarantor in
discharging the Issuer's obligations with respect to the Notes or any other
Guarantor's obligations with respect to the Guarantees.
SECTION 11.03. "TRUSTEE" TO INCLUDE PAYING AGENT.
In case at any time any paying agent other than the Trustee shall have
been appointed by the Issuer and be then acting hereunder, the term "Trustee" as
used in this Article 11 shall in such case (unless the context shall otherwise
require) be construed as extending to and including such paying agent within its
meaning as fully for all intents and purposes as if such paying agent were named
in this Article 11 in place of the Trustee.
SECTION 11.04. RELEASE OF A GUARANTOR.
Upon the sale or disposition of any Guarantor by the Issuer in
compliance with the terms of this Indenture (including by way of merger or
consolidation), such Guarantor shall be deemed released from all obligations
under this Article 11 without any further action required on the part of the
Trustee or any Holder. All other Guarantors shall remain jointly and severally
liable for the full amount of principal of and interest on the Notes as provided
in this Article 11. At the request of the Issuer, however, the Trustee shall
execute and deliver an appropriate instrument evidencing such release.
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SECTION 11.05. EXECUTION OF GUARANTEES.
To evidence their guarantee to the Holders specified in Section 11.01
hereof, the Guarantors hereby agree to execute the Guarantee substantially in
the form above recited to be endorsed on each Note authenticated and delivered
by the Trustee. Each such Guarantee shall be signed on behalf of each of the
Guarantors by its Chairman of the Board, President or a Vice President prior to
the authentication of the Note on which it is endorsed, and the delivery of such
Note by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Guarantee on behalf of the Guarantors. Such
signatures upon a Guarantee may be manual or facsimile signature of the present,
past or any future such officers and may be imprinted or otherwise reproduced on
the Guarantees, and in case any such officer who shall have signed any of the
Guarantees shall cease to be such officer before the Note on which such
Guarantee is endorsed shall have been authenticated and delivered by the Trustee
or disposed of by the Issuer, such Note nevertheless may be authenticated and
delivered or disposed of as though the person who signed the Guarantee had not
ceased to be such officer of such Guarantor.
ARTICLE 12
MISCELLANEOUS
SECTION 12.01. TRUST INDENTURE ACT CONTROLS.
If any provision of this Indenture limits, qualifies or conflicts
with the duties imposed by TIA Section 318(c), the imposed duties shall
control.
SECTION 12.02. NOTICES.
Any notice or communication by the Issuer or the Trustee to any other
party hereto is duly given if in writing and delivered in person or mailed by
first class mail (registered or certified, return receipt requested), telex,
telecopier or overnight air courier guaranteeing next day delivery, to the
party's address:
If to the Issuer:
Mortgage and Realty Trust
8380 Old York Road, Suite 300
Elkins Park, Pennsylvania 19117
Telecopier No.: (215) 881-6483
Attention: Treasurer
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If to the Trustee:
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, DE 19890
Telecopier No: (302) 651-8882
Attention: Corporate Trust Department
The Issuer or the Trustee, by notice to the other may designate
additional or different addresses for subsequent notices or communications.
All notices and communications (other than those sent to Holders of
Notes) shall be deemed to have been duly given: at the time delivered by hand,
if personally delivered; five Business Days after being deposited in the mail,
postage prepaid, if mailed; when answered back, if telexed; when receipt
acknowledged, if telecopied; and the next Business Day after timely delivery to
the courier, if sent by overnight air courier guaranteeing next day delivery.
Any notice or communication to a Holder of a Note shall be mailed
by first class mail, certified or registered, return receipt requested, or by
overnight air courier guaranteeing next day delivery to its address shown on
the register kept by the Registrar. Any notice or communication shall also
be so mailed to any Person described in TIA Section 313(c), to the extent
required by the TIA. Failure to mail a notice or communication to a Holder
of a Note or any defect in it shall not affect its sufficiency with respect
to other Holders of Notes.
If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
If the Issuer mails a notice or communication to Holders of Notes, it
shall mail a copy to the Trustee and each Agent at the same time.
SECTION 12.03. COMMUNICATION BY HOLDERS OF NOTES WITH
OTHER HOLDERS OF NOTES.
Holders of the Notes may communicate pursuant to TIA Section 312(b)
with other Holders of Notes with respect to their rights under this
Indenture, the Notes and the Collateral Documents. The Trustee shall act in
accordance with TIA Section 312(b) with respect to such communications. The
Issuer, the Trustee, the Collateral Agent, the Registrar and anyone else
shall have the protection of TIA Section 312(c).
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SECTION 12.04. CERTIFICATE AND OPINION AS TO
CONDITIONS PRECEDENT
Upon any request or application by the Issuer to the Trustee to take
any action under this Indenture, the Issuer shall furnish to the Trustee:
(a) an Officers' Certificate in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of the signers, all
conditions precedent and covenants, if any, provided for in this Indenture
relating to the proposed action have been satisfied; and
(b) an Opinion of Counsel in form and substance reasonably
satisfactory to the Trustee (which shall include the statements set forth
in Section 12.05 hereof) stating that, in the opinion of such counsel, all
such conditions precedent and covenants provided for in this Indenture
relating to the proposed action have been satisfied.
SECTION 12.05. STATEMENTS REQUIRED IN CERTIFICATE
OR OPINION.
Each certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture (other than a certificate
provided pursuant to TIA Section 314(a)(4)) shall include:
(a) a statement that the Person making such certificate or opinion
has read such covenant or condition;
(b) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(c) a statement that, in the opinion of such Person, he or she has
made such examination or investigation as is necessary to enable him or her
to express an informed opinion as to whether or not such covenant or
condition has been complied with; and
(d) a statement as to whether or not, in the opinion of such Person,
such condition or covenant has been complied with.
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SECTION 12.06. RULES BY TRUSTEE AND AGENTS.
The Trustee may make reasonable rules for action by or at a meeting of
Holders of Notes. The Registrar or Paying Agent may make reasonable rules and
set reasonable requirements for its functions.
SECTION 12.07. NO PERSONAL LIABILITY OF TRUSTEES,
OFFICERS, EMPLOYEES AND EQUITYHOLDERS.
No trustee, officer, employee or equityholder of the Issuer, as such,
shall have any liability for any obligations of the Issuer under the Notes or
this Indenture or for any claim based on, in respect of, or by reason of, such
obligations or their creation. Each Holder of the Notes by accepting a Note
waives and releases all such liability. The waiver and release are part of the
consideration for issuance of the Notes.
SECTION 12.08. GOVERNING LAW.
The internal law of the State of New York shall govern and be used to
construe this Indenture and the Notes.
SECTION 12.09. NO ADVERSE INTERPRETATION OF OTHER
AGREEMENTS.
This Indenture and the Notes may not be used to interpret another
indenture, loan or debt agreement of the Issuer or the Subsidiaries. Any such
indenture, loan or debt agreement may not be used to interpret this Indenture.
This writing constitutes the entire agreement of the parties with respect to the
subject matter hereof. Unless expressly otherwise indicated herein, an action
or transaction permitted by one provision hereof must nonetheless comply with
all other applicable provisions hereof; and any action or transaction not
permitted by any provision of this Indenture will not be permitted regardless of
whether any other provisions hereof might permit such action or transaction.
SECTION 12.10. SUCCESSORS.
All agreements of the Issuer in this Indenture and the Notes shall
bind its successors. All agreements of the Trustee in this Indenture shall bind
its successors.
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SECTION 12.11. SEVERABILITY.
In case any provision in this Indenture or in the Notes shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 12.12. COUNTERPART ORIGINALS.
The parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together represent the same
agreement.
SECTION 12.13. TABLE OF CONTENTS, HEADINGS, ETC.
The Table of Contents, Cross-Reference Table and Headings of the
Articles and Sections of this Indenture have been inserted for convenience of
reference only, are not to be considered a part of this Indenture and shall in
no way modify or restrict any of the terms or provisions hereof.
SECTION 12.14. AMENDMENT AND RESTATEMENT.
This Indenture amends and restates in its entirety the Indenture,
dated as of July 15, 1992, as amended, between the Issuer and Wilmington Trust
Company, as trustee, relating to the Issuer's Senior Secured Uncertificated
Notes due 1995.
SECTION 12.15. SATISFACTION AND DISCHARGE.
Upon the indefeasible payment in full of all Obligations of the Issuer
hereunder and under the Notes, the Issuer and the Guarantors shall be released
from all their respective obligations hereunder and under the Notes and this
Indenture shall cease to be of further effect.
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[Signatures on following page]
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SIGNATURES
Dated as of September 29, 1995 MORTGAGE AND REALTY TRUST
By: /s/ Daniel F. Hennessey
--------------------------------
Name: Daniel F. Hennessey
Title: C.F.O.
Attest:
/s/ Hugh T. Regan
- -----------------------------
Name: Hugh T. Regan
Title: Vice President
Dated as of September 29, 1995 WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ Mary St. Amand
--------------------------------
Name: Mary St. Amand
Title: Assistant Vice President
Attest:
/s/
- -----------------------------
Name:
Title:
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Accepted and agreed to, solely with respect to the Guarantees and all
express obligations of the Guarantors set forth elsewhere herein.
MRT WEST, INC.
MRT CREEKSIDE, INC.
MRT NEWARK, INC.
MRT SANTA MONICA, INC.
Dated as of September 29, 1995 By: /s/ Daniel F. Hennessey
--------------------------------
Title: Vice President of each
the foregoing Guarantors
Attest:
/s/ Hugh T. Regan, Jr.
- -----------------------------
Name: Hugh T. Regan, Jr.
Title: Vice President
150 RITTENHOUSE CIRCLE, INC.
Dated as of September 29, 1995 By: /s/ Daniel F. Hennessey
--------------------------------
Title: Treasurer
--------------------------------
Attest:
/s/ Hugh T. Regan, Jr.
- -----------------------------
Name: Hugh T. Regan, Jr.
Title: Vice President
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EXHIBIT A
[Face of Note]
11-1/8% Senior Secured Note due 2002
No.___ $____________
Mortgage and Realty Trust promises to pay to ________________________ or its
registered assigns the outstanding principal balance on __________ __, 2002.
The Interest Payment Dates shall be June 30 and December 31, commencing
_________ __, 1995. The Record Dates shall be June 1 and December 1 (whether or
not a Business Day).
Dated:__________________ Mortgage and Realty Trust
(SEAL)
By:_____________________________________
Title:
This is one of the Notes
referred to in the within
mentioned Indenture:
Wilmington Trust Company,
as Trustee
By:_____________________________________
Authorized Signatory
A-1
<PAGE>
[Back of Note]
11-1/8% Senior Secured Note due 2002
Capitalized terms used herein have the meanings assigned to them in
the Indenture (as defined below) unless otherwise indicated.
1. INTEREST. Mortgage and Realty Trust, a real estate investment
trust organized under the laws of Maryland (the "Issuer"), promises to pay
interest on the principal amount of this Note at the rate and in the manner
specified below. Interest will accrue at 11-1/8% per annum and will be payable
semiannually in arrears on each June 30 and December 31, commencing _________
__, 1995 or if any such day is not a Business Day on the next succeeding
Business Day (each an "Interest Payment Date") to Holders of record of the Notes
at the close of business on the immediately preceding June 1 and December 1,
whether or not a Business Day. Interest will be computed on the basis of a
360-day year consisting of twelve 30-day months. Interest shall accrue from the
most recent date to which interest has been paid or, if no interest has been
paid, from ________ __, 1995. The Issuer shall pay interest on overdue
principal at the rate equal to 2% per annum in excess of the then applicable
interest rate on the Notes to the extent lawful; and it shall pay interest on
overdue installments of interest (without regard to any applicable grace
periods) at the same rate to the extent lawful.
2. METHOD OF PAYMENT. The Issuer will pay interest on the Notes
(except defaulted interest) to the Persons who are registered Holders of Notes
at the close of business on the record date next preceding the Interest Payment
Date, even if such Notes are cancelled after such record date and on or before
such Interest Payment Date. The Holder hereof must surrender this Note to a
Paying Agent to collect principal payments. The Issuer will pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts. The Notes will be payable both
as to principal and interest at the office or agency of the Issuer maintained
for such purpose within the City of Philadelphia, Pennsylvania or, at the option
of a Holder, payment of interest may be made by check mailed to such Holder at
its address set forth in the register of Holders or by wire to an account
designated by such Holder. Unless otherwise designated by the Issuer, the
Issuer's office or agency in Philadelphia will be the office or agency of the
Trustee maintained for such a purpose.
3. PAYING AGENT AND REGISTRAR. Initially, the Trustee will act as
Paying Agent and Registrar. The Issuer may change any Paying Agent, Registrar
or co-registrar without prior notice to any Holder of a Note. The Issuer may
act in any such capacity.
A-2
<PAGE>
4. INDENTURE. The Issuer issued the Notes under an Indenture, dated
as of ________ __, 1995 (the "Indenture"), between the Issuer and the Trustee.
The terms of the Notes include those stated in the Indenture and those made part
of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15
U.S.C. Sections 77aaa-77bbbb), as in effect on the Issue Date. The Notes are
subject to all such terms, and Holders of Notes are referred to the Indenture
and such act for a statement of such terms. The terms of the Indenture shall
govern any inconsistencies between the Indenture and the Notes. The Notes
are secured obligations of the Issuer limited to $110,000,000 in aggregate
principal amount.
5. OPTIONAL REDEMPTION. The Issuer shall have the option to redeem
the Notes, in whole or in part, upon not less than 30 nor more than 60 days'
notice, at par plus accrued and unpaid interest thereon to the applicable
redemption date.
6. MANDATORY REDEMPTION. Except as set forth under Sections 3.09 and
4.19 of the Indenture, the Issuer will not be required to make mandatory
redemption payments or sinking fund payments with respect to the Notes.
7. REPURCHASE AT OPTION OF HOLDER.
(a) If there is a Change of Control unless waived by the Required
Holders, the Issuer shall be required to offer to purchase on the Change of
Control Payment Date all outstanding Notes at a purchase price equal to 100% of
the aggregate principal amount thereof, plus accrued and unpaid interest to the
Change of Control Payment Date. Holders of Notes that are subject to an offer
to purchase will receive a Change of Control Offer from the Issuer prior to any
related Change of Control Payment Date and may elect to have such Notes
purchased by completing the form entitled "Option of Holder to Elect Purchase"
appearing below.
(b) If at any time the aggregate amount of Asset Sale Proceeds or net
cash proceeds of Indebtedness incurred pursuant to Section 4.14(i) of the
Indenture that have not been applied in accordance with Section 3.09 of the
Indenture (exclusive of any Asset Sale Proceeds or net cash proceeds which
remain after the completion of any prior Asset Sale Offer) exceeds $10 million,
the Issuer shall be required to purchase the maximum principal amount of Notes
that, together with accrued and unpaid interest thereon, may be purchased with
80% of any Asset Sale Proceeds or 100% of the net cash proceeds of such
Indebtedness, at 100% of the outstanding principal amount thereof plus accrued
and unpaid interest, if any, to the date fixed for the closing of such offer.
To the extent that the aggregate principal amount of Notes tendered together
with accrued and unpaid interest thereon pursuant to any Asset Sale Offer is
less than the Asset Sale Proceeds or net cash proceeds of Indebtedness available
therefor, the Issuer may use such deficiency in accordance with the terms of the
Indenture. If the aggregate principal amount of Notes surrendered by Holders
thereof together with accrued and unpaid interest thereon exceeds the amount of
Asset
A-3
<PAGE>
Sale Proceeds or net cash proceeds of Indebtedness, the Notes to be redeemed
shall be selected on a pro rata basis (with such adjustments as may be
deemed appropriate by the Issuer so that only Notes in denominations of $1,000,
or integral multiples thereof, shall be purchased). Holders of Notes that are
the subject of an offer to purchase will receive an Asset Sale Offer from the
Issuer (or the applicable Subsidiary) prior to any related purchase date and may
elect to have such Notes purchased by completing the form entitled "Option of
Holder to Elect Purchase" appearing below. Any Holder may at any time elect to
deliver to the Trustee written instructions (each a "Standing Instruction")
stating that such Holder desires to participate in any Asset Sale Offer by
tendering the maximum permitted number of such Holder's Notes for repurchase in
such Asset Sale Offer. Upon receipt of such Standing Instruction, the Trustee
shall deem the maximum permitted number of such Holder's Notes tendered upon the
commencement of any Asset Sale Offer. The issuing Holder may withdraw such
Standing Instruction at any time prior to the expiration of an Offer Period by
so notifying the Trustee in writing. Each Holder electing not to deliver a
Standing Instruction shall respond to the notice of an Asset Sale Offer, as set
forth in Section 3.09 of the Indenture, prior to the termination of the Offer
Period.
8. NOTICE OF REDEMPTION. Notice of redemption shall be mailed at
least 30 days but not more than 60 days before the redemption date to each
Holder whose Notes are to be redeemed at its registered address. Notes may be
redeemed in part but only in whole multiples of $1,000, unless all of the Notes
held by a Holder of Notes are to be redeemed. On and after the redemption date,
interest ceases to accrue on Notes or portions of them called for redemption.
9. DENOMINATIONS, TRANSFER, EXCHANGE. The Notes are in registered
form without coupons in denominations of $1,000 and integral multiples of
$1,000. The transfer of Notes may be registered and Notes may be exchanged as
provided in the Indenture. The Registrar and the Trustee may require a Holder
of a Note, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. The Registrar need not exchange or register the transfer of any Note
or portion of a Note selected for redemption. Also, it need not exchange or
register the transfer of any Notes for a period of 15 days before a selection of
Notes to be redeemed.
10. PERSONS DEEMED OWNERS. Prior to due presentment to the Trustee
for registration of the transfer of this Note, the Trustee, any Agent and the
Issuer may deem and treat the Person in whose name this Note is registered as
its absolute owner for the purpose of receiving payment of principal of and
interest on this Note and for all other purposes whatsoever, whether or not this
Note is overdue, and neither the Trustee, any Agent nor the Issuer shall be
affected by notice to the contrary. The Holder shall be treated as its owner
for all purposes.
A-4
<PAGE>
11. AMENDMENTS, SUPPLEMENT AND WAIVERS. Subject to certain
exceptions, the Indenture, the Notes and the Collateral Documents may be amended
or supplemented with the consent of the Required Holders, and any existing
default or compliance with any provision of the Indenture or the Notes may be
waived with the consent of the Required Holders. Without the consent of any
Holder of a Note, the Indenture, the Notes and the Collateral Documents may be
amended or supplemented to cure any ambiguity, defect or inconsistency, to
provide for uncertificated Notes in addition to or in place of certificated
Notes, to provide for the assumption of the Issuer's obligations to Holders of
the Notes in case of a merger or consolidation, to amend the Collateral
Documents in case of a merger or consolidation pursuant to the terms thereof, to
execute and deliver any documents necessary or appropriate to release Liens on
any Collateral as permitted by Section 10.03 of the Indenture, to make any
change that would provide any additional rights or benefits to the Holders of
the Notes or that does not materially adversely affect the legal rights under
the Indenture of any such Holder, or to comply with the requirements of the SEC
in order to effect or maintain the qualification of the Indenture under the
Trust Indenture Act.
12. DEFAULTS AND REMEDIES. Events of Default include, without
limitation: the Issuer shall fail to make any payment in respect of principal
of the Notes or under Section 3.09 or 4.19 of the Indenture when the same
becomes due and payable and such failure continues for a period of 5 Business
Days after the due date of such payment or the Issuer shall fail to make any
payment when due of interest on the Notes and such failure continues for a
period of 10 days after the due date of such payment; or any representation or
warranty made or deemed made by the Issuer or any Subsidiary (or any of their
officers) under the Disclosure Statement or the Collateral Documents shall prove
to have been untrue or incorrect in any material respect when made or deemed
made; or the Issuer (or the Issuer or any Subsidiary in the case of the
Collateral Documents) shall fail to perform or observe (i) any term, covenant or
agreement contained in Article 4 (other than Section 4.07) or Article 5 of the
Indenture or (ii) any other term, covenant or agreement contained in the
Indenture, the Plan or the Collateral Documents, if such failure under this
clause (ii) shall remain unremedied for 30 days after the earlier of the date on
which (A) an Officer of the Issuer becomes aware of such failure or (B) written
notice thereof shall have been given to the Issuer by the Trustee or the
Holders; or the Issuer or any Subsidiary shall fail, after any applicable grace
period, to pay any principal of or premium, if any, or interest on any of its
Indebtedness in an amount exceeding $1,000,000 (excluding the Notes), when the
same becomes due and payable (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise), or any other event shall occur
or condition shall exist under any agreement or instrument relating to any such
Indebtedness, if the effect of such event or condition is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness, or any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or the Issuer or any Material Subsidiary of the Issuer shall
generally not pay
A-5
<PAGE>
its debts as such debts become due except such debts that are the subject of a
good faith dispute, or shall admit in writing its inability to pay its debts
generally, or shall make a general assignment for the benefit of creditors,
or any proceeding shall be instituted by or against the Issuer or such
Material Subsidiary seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceedings instituted against the Issuer or such Material
Subsidiary (but not instituted by it), either such proceedings shall remain
undismissed or unstayed for a period of 30 days or any of the actions sought in
such proceedings shall occur, or the Issuer or such Material Subsidiary shall
take any action to authorize any of the foregoing actions; or any judgment or
order for the payment of money in excess of $1,000,000 shall be rendered against
the Issuer or any Subsidiary and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order, or (ii) there shall
be any period of ten consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect; or except for releases of Collateral pursuant to Asset Sales in
accordance with Section 4.11 of the Indenture, the Indenture or the Collateral
Documents shall, for any reason, cease to create a valid Lien on Collateral
having a value of $1,000,000 or more purported to be covered thereby, or such
Lien shall cease to have the priority Lien status initially granted and be a
perfected Lien as to Collateral having a value of $1,000,000 or more. If any
Event of Default occurs and is continuing, the Trustee or the Required Holders
may declare all the Notes to be due and payable immediately. Holders of the
Notes may not enforce the Indenture or the Notes except as provided in the
Indenture. Subject to certain limitations, the Required Holders may direct the
Trustee in its exercise of any trust or power. The Required Holders, by notice
to the Trustee, may on behalf of the Holders of all of the Notes waive any
existing Default or Event of Default and its consequences under the Indenture
except a continuing Default or Event of Default in the payment of interest on,
or the principal of, the Notes.
13. TRUSTEE DEALINGS WITH ISSUER. The Trustee under the Indenture,
in its individual or other capacity, may make loans to, accept deposits from,
and perform services for the Issuer or its Affiliates, and may otherwise deal
with the Issuer or its Affiliates, as if it were not Trustee; however, if the
Trustee acquires any conflicting interest it must eliminate such conflict within
90 days, apply to the SEC for permission to continue as Trustee or resign.
14. NO PERSONAL LIABILITIES OF TRUSTEES, OFFICERS, EMPLOYEES AND
EQUITYHOLDERS. No trustee, officer, employee or equityholder of the Issuer or
any Guarantor, as such, shall have any liability for any obligations of the
Issuer under the Notes, the Indenture or the Collateral Documents or for any
obligations of the
A-6
<PAGE>
Guarantors under the Guarantees or for any claim based on, in respect of,
or by reason of, such obligations or their creation. Each Holder of the
Notes by accepting a Note waives and releases all such liability. The waiver
and release are part of the consideration for issuance of the Notes.
15. AUTHENTICATION. This Note shall not be valid until authenticated
by the manual signature of the Trustee or an authenticating agent.
16. ABBREVIATIONS. Customary abbreviations may be used in the name
of a Holder of a Note or an assignee, such as: TEN COM (= tenants in common),
TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A
(= Uniform Gifts to Minors Act).
17. CUSIP NUMBER. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Issuer has caused
CUSIP numbers to be printed on the Notes and has directed the Trustee to use
CUSIP numbers in notices of redemption as a convenience to Holders of Notes. No
representation is made as to the accuracy of such numbers either as printed on
the Notes or as contained in any notice of redemption and reliance may be placed
only on the other identification numbers placed thereon.
18. COLLATERAL DOCUMENTS. As provided in the Indenture and the
Collateral Documents, and subject to certain limitations set forth therein, the
Obligations of the Issuer under the Indenture and the Collateral Documents are
secured by the Collateral as provided in the Collateral Documents. Each Holder,
by accepting a Note, agrees to be bound by all terms and provisions of the
Collateral Documents, as the same may be amended from time to time. The Liens
created under the Collateral Documents shall be released upon the terms and
subject to the conditions set forth in the Indenture and the Collateral
Documents.
19. SUCCESSOR ENTITY. When a successor Person assumes all the
obligations of its predecessor under the Indenture, the Notes and the Collateral
Documents, the predecessor Person shall be released from such Obligations.
The Issuer will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture or the Collateral Documents. Request
may be made to:
Mortgage and Realty Trust
8380 Old York Road, Suite 300
Elkins Park, Pennsylvania 19117
Attention: Treasurer
A-7
<PAGE>
ASSIGNMENT FORM
To assign this Note, fill in the form below: (I) or (we) assign and transfer
this Note to
_______________________________________________________________________________
(Insert assignee's soc. sec. or tax I.D. no.)
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
(print or type assignee's name, address and zip code)
and irrevocably appoint _______________________________________________________
agent to transfer this Note on the books of the Issuer. The Agent may
substitute another to act for him.
Date: _________________________________
Your Signature: ________________________
(Sign exactly as your
name appears on the face
of this Note)
Signature Guarantee:
A-8
<PAGE>
OPTION OF HOLDER TO ELECT PURCHASE
If you want to elect to have all or any part of this Note purchased by
the Issuer pursuant to Section 3.09 or Section 4.19 of the Indenture, check the
appropriate box below:
/ / Section 3.09 / / Section 4.19
If you want to have only part of this Note purchased by the Issuer
pursuant to Section 3.09 or Section 4.19 of the Indenture, state the amount you
elect to have purchased:
$ ________________
Date: _________________________________
Signature Guarantee: Your Signature: ________________________
(Sign exactly as your
name appears on the face
of this Note)
A-9
<PAGE>
GUARANTEE
For value received, MRT West, Inc., MRT Creekside, Inc., MRT Newark,
Inc., MRT Santa Monica, Inc. and 150 Rittenhouse Circle, Inc. (herein called the
"Guarantors"), hereby jointly and severally unconditionally guarantee to the
Holder of the Note upon which this Guarantee is endorsed the due and punctual
payment of the principal of and interest on said Note, when and as the same
shall become due and payable, whether by declaration thereof or otherwise,
according to the terms thereof and of the Indenture referred to therein. The
Guarantors hereby agree that their obligations hereunder shall be joint,
absolute and unconditional, irrespective of, and shall be unaffected by, any
invalidity, irregularity or unenforceability of said Note or said Indenture, any
failure to enforce the provisions of said Note or said Indenture, or any waiver,
modification or indulgence granted to the Issuer with respect thereof, by the
Holder of said Note or said Trustee or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantors hereby waive diligence, presentment, demand of payment, filing of
claims with a court in the event of merger or bankruptcy of the Issuer, any
right to require a proceeding first against the Issuer, protest or notice with
respect to said Note or the indebtedness evidenced thereby and all demands
whatsoever, and covenants that this Guarantee will not be discharged except by
payment in full of the principal of and interest on said Note.
The Guarantors shall be subrogated to all rights of the Holder of said
Note against the Issuer in respect of any amounts paid to such holder by the
Guarantors pursuant to the provisions of this Guarantee; PROVIDED, HOWEVER, that
the Guarantors shall not be entitled to enforce, or to receive any payments
arising out of or based upon, such right of subrogation until the principal of
and premium, if any, and interest on all Notes issued under said Indenture shall
have been paid in full.
This Guarantee shall not be valid or become obligatory for any purpose
until the certificate of authentication on said Note shall have been signed
manually by or on behalf of the Trustee under the Indenture referred to in said
Note.
This Guarantee shall be deemed to be a contract made under the laws of
the State of New York, and for all purposes shall be governed by and construed
in accordance with the laws of the State of New York.
A-10
<PAGE>
IN WITNESS WHEREOF, each of the Guarantors has caused this Guarantee
to be duly executed in facsimile by its duly authorized officer.
MRT WEST, INC.
MRT CREEKSIDE, INC.
MRT NEWARK, INC.
MRT SANTA MONICA, INC.
By: /s/ Daniel F. Hennessey
-----------------------------------
Title: Vice President of each
of the foregoing Guarantors
150 RITTENHOUSE CIRCLE, INC.
By: /s/ Daniel F. Hennessey
-----------------------------------
Title: Treasurer
----------------------------
A-11
<PAGE>
EXHIBIT B
FORM OF ASSIGNMENT OF LEASE
(intentionally omitted)
<PAGE>
EXHIBIT C
FORM OF COLLATERAL ASSIGNMENT OF LEASE
(intentionally omitted)
<PAGE>
EXHIBIT C-1
FORM OF COLLATERAL ASSIGNMENT OF MORTGAGE
(begins on following page)
<PAGE>
<PAGE>
State: __________________
MRT No. _________________
PREPARED BY
AND WHEN RECORDED MAIL TO:
MRT COLLATERAL AGENT
c/o WILLIAM J. WADE, ESQ.
RICHARDS, LAYTON & FINGER
ONE RODNEY SQUARE
P.O. BOX 551
WILMINGTON, DELAWARE 19899
ASSIGNMENT OF DEED OF TRUST
AND OTHER RECORDED DOCUMENTS
IN CONSIDERATION of Ten Dollars ($10.00) and other good and valuable
consideration, the receipt and legal sufficiency of which are hereby
acknowledged, the undersigned, MORTGAGE AND REALTY TRUST ("ASSIGNOR"), a
Maryland real estate investment trust, having an office at
_________________________________ _______________, does hereby grant, bargain,
sell, assign, transfer and convey unto WILMINGTON TRUST COMPANY, a Delaware
banking corporation, and WILLIAM J. WADE (hereinafter collectively referred to
as "Assignee"), acting not in their individual capacities but solely as
Collateral Agents for the Lenders under and pursuant to the Amended and Restated
Collateral and Security Agreement (the "COLLATERAL AGREEMENT"), made as of
September 29, 1995, among Assignor, Assignee and Lenders, those certain
mortgages, deeds of trust, assignment of leases and rents, and other recorded
documents more particularly described on SCHEDULE I annexed hereto and made a
part hereof, (collectively, the "RECORDED DOCUMENTS") encumbering the property
(the "REAL ESTATE") more particularly described on EXHIBIT A annexed hereto and
made a part hereof, and all of Assignor's right, title and interest in, to and
under the Recorded Documents.
TOGETHER WITH the note or obligation described in the Recorded
Documents and the monies due and to become due thereon, with all accrued
interest thereon.
If not otherwise defined herein, capitalized terms referred to herein
shall have the meanings assigned to those terms in or by reference in the
Collateral Agreement and the Plan (as hereinafter defined).
This Assignment of Deed of Trust and Other Recorded Documents is made
(a) pursuant and subject to the terms of the Collateral Agreement and the Plan
of Reorganization Proposed by Mortgage and Realty Trust (dated July 12, 1995)
and confirmed by the Court on September 22, 1995 pursuant to the Order (1)
1
<PAGE>
Approving Disclosure Statement and Prepetition Solicitation; and (2) confirming
the Plan of Reorganization Proposed by Mortgage and Realty Trust (as confirmed,
the "Plan"), and (b) as additional security for the payment and performance of
all of the Liabilities of the Assignor to the Lenders (including, without
limitation, repayment of the Notes, as defined and described in the Indenture).
Nothing contained herein shall be deemed to confer or create greater rights or
impose greater obligations than those rights and obligations contemplated than
those in the Collateral Agreement or the Plan.
Upon receipt by any obligor or guarantor (an "OBLIGOR") under any note
or obligation described in the Recorded Documents of notice from the Assignee,
as agent, its successors or assigns, the Obligor shall and is hereby directed
(which direction is irrevocable) to make all payments (the "PAYMENTS") under
such note or obligation to the Assignee, as agent, its successors or assigns and
the Obligor shall not be required to inquire into any such notice but may rely
thereon. Payments to the Assignee, its successors or assigns once started shall
continue until the Obligor is given different notice by the Assignee, its
successors or assigns or by court order.
The provisions of this Assignment shall be governed by the laws of the
state in which the Real Estate is located.
This instrument has been executed on behalf of the Assignor by the
________________ in his capacity as ____________________________ of Assignor.
As provided in section 7.2 of the declaration of trust of Assignor, no trustee,
officer, agent or shareholder of Assignor shall be bound or held to any personal
liability in connection with the obligations of Assignor arising out of the
execution of this instrument. The execution of this instrument by the said
individual shall not bind the said individual and he shall not be held to any
personal liability in connection with the obligations under this instrument as a
result of such execution.
2
<PAGE>
Assignee's mailing address and address from which information
concerning its security interest may be obtained is:
MRT Collateral Agent
c/o William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
IN WITNESS WHEREOF, Assignor has caused this Assignment to be executed
on the _____ day of _______________, _______.
MORTGAGE AND REALTY TRUST, as
Assignor
ATTEST:
_______________________ By: _________________________
Name: Name:
Title: Title:
3
<PAGE>
EXHIBIT D
FORM OF MORTGAGE
(begins on following page)
<PAGE>
Recording Requested By
and When Recorded Return to:
MRT Collateral Agent
c/o William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT
AND FIXTURE FILING
from
MORTGAGE AND REALTY TRUST,
Mortgagor
to
WILMINGTON TRUST COMPANY,
a Delaware banking corporation,
and WILLIAM J. WADE acting not in their
individual capacities but solely as
Collateral Agents,
Mortgagee
dated as of ___________, 199___
Premises:
State: _________________________
MRT: _________
<PAGE>
MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
THIS MORTGAGE, ASSIGNMENT OF RENTS, SECURITY AGREEMENT AND FIXTURE
FILING ("Mortgage") is made as of the _____ day of __________________, 199___,
from MORTGAGE AND REALTY TRUST, a Maryland real estate investment trust ("MRT"),
having an office at ____________________________________________________________
________________, herein called Mortgagor, and WILMINGTON TRUST COMPANY, a
Delaware banking corporation, and WILLIAM J. WADE, acting not in their
individual capacities but solely as Collateral Agents for Lenders under and
pursuant to that certain Amended and Restated Collateral and Security Agreement
made as of September 29, 1995 (the "Collateral Agreement"), herein collectively
referred to as Mortgagee, whose mailing address and address from which
information concerning its security interest may be obtained is:
MRT Collateral Agent
c/o William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
If not otherwise defined herein, capitalized terms referred to herein
shall have the meanings assigned to those terms in or by reference in the
Collateral Agreement and the Plan (as hereinafter defined).
W I T N E S S E T H :
WHEREAS, Mortgagor has incurred or will incur obligations to Lenders
on certain terms and conditions as hereinafter set forth;
WHEREAS, Mortgagor owns the "Property" (as hereinafter defined)
covered by this Mortgage;
WHEREAS, Mortgagor owns and may hereafter acquire certain fixtures
located on or about the "Land" (as hereinafter defined) covered by this
Mortgage;
WHEREAS, Mortgagor, for good and valuable consideration received, has
agreed to absolutely assign the rents, issues and profits of the Property to
Mortgagee; and
WHEREAS, Mortgagor, for good and valuable consideration received, has
agreed to execute and deliver this Mortgage to secure the obligations of
Mortgagor as hereinafter set forth.
2
<PAGE>
NOW, THEREFORE:
1. CONVEYANCE. For good and valuable consideration, the receipt of
which is hereby acknowledged, Mortgagor hereby irrevocably grants, transfers and
assigns to Mortgagee WITH MORTGAGE COVENANTS, and subject to the terms and
conditions hereinafter set forth, all of Mortgagor's right, title and interest
now held or hereafter acquired in and to the following (which, except where the
context otherwise requires, are collectively referred to as the "Property"):
(a) LAND. All that certain real property ("Land"), which is
more particularly described in Exhibit "A" attached hereto and incorporated
herein by this reference;
(b) RENTS AND OTHER INCOME. All rents, issues, profits,
royalties, income, revenues, and other benefits derived from the Property or
from the business located thereon or operated with respect thereto (collectively
the "Rents"), subject to the right, power, and authority hereinafter given to
Mortgagor to collect and apply Rents;
(c) LEASES. All leases or subleases covering the Land or any
portion thereof now or hereafter existing or entered into, and all right, title,
and interest of Mortgagor thereunder, including, without limitation, all cash or
security deposits, advance rentals, and deposits or payments of similar nature;
(d) OPTIONS. All options to purchase, lease or sublease or
otherwise acquire (i) the Land or any portion thereof or interest therein, any
greater estate in the Land now owned or hereafter acquired or (ii) any other
property of any kind adjacent to or used or to be used in connection with any of
the Property;
(e) OTHER INTERESTS. All interests, estate or other claims,
both in law and in equity, in the Land;
(f) EASEMENTS: All easements, rights-of-way or other rights,
and all tenements, hereditaments and appurtenances thereof and thereto, held or
used in connection with (i) the Land as a means of access to the Land, or (ii)
any of the Property for any purpose;
(g) MINERAL RIGHTS. All minerals, oil, gas and water on or
under the Land and all rights to extract, sever or remove any and all of the
same from the land;
(h) IMPROVEMENTS, BUSINESS RIGHTS AND FIXTURES. All buildings,
structures, improvements, equipment, fixtures, chattels, electronic machines,
machinery, apparatus, equipment, general intangibles, fittings and articles of
personal property of every kind and nature whatsoever, all appurtenances and
addi-
3
<PAGE>
tions thereto and substitutions or replacements thereof (herein collectively
referred to as the "Fixtures"), and other articles of property now or hereafter
installed in, located on, attached to, or used or adapted or intended for use in
the operation of the Land, including, without limiting the generality of the
foregoing, all heating and incinerating apparatus and equipment whatsoever, all
boilers, engines, motors, dynamos, generating equipment, piping and plumbing
fixtures, ranges, cooking apparatus and mechanical kitchen equipment, stoves,
refrigerators, freezers, air-cooling and air conditioning apparatus,
ventilating, sprinkling and vacuum cleaning systems, communication systems, fire
extinguishing apparatus, loading and unloading equipment systems, laundry and
cleaning systems, gas and electric fixtures, lighting, switchboards, carpeting,
underpadding, rugs, elevators, escalators, partitions, mantels, built-in
mirrors, window shades, blinds, curtains, draperies, screens, storm sashes,
awnings, motor vehicles of every kind and description, furniture, furnishings of
public spaces, halls and lobbies, shrubbery and plants, books and records
relating to or employed in any business now or hereafter operated on the Land,
including all interest of Mortgagor in any of such items now or hereafter at any
time acquired under lease, conditional sale contract, chattel mortgage, or other
title retaining or security instrument; all of which property mentioned in this
paragraph, whether or not subject to any other security interest, shall be
deemed part of the Land and not severable wholly or in part without material
injury to the Land; and all rights in and to any business located or operated on
or in connection with the Land or any of the Property;
(i) OTHER FURNISHINGS AND EQUIPMENT. All other furniture,
furnishings, fixtures, appliances, machinery or equipment attached to, located
on or about, arising out of, related to, or used or adapted for use or intended
to be used in connection with the Property, including without limitation, all
model unit and sales and business furniture, furnishings, decorations,
appliances, equipment and material.
(j) ADDITIONS AND SUBSTITUTIONS. All additions, accessions,
replacements, substitutions, and renewals of or to any of the foregoing real or
personal property;
(k) OTHER CONTRACT RIGHTS. All permits, applications, licenses
and contracts to improve, use, develop, subdivide, sell, study, survey or
appraise any of the Land and all contracts, plans and specifications including
all amendments, modifications, supplements, general conditions and addenda
thereof or thereto, prepared by or under the supervision of any architect,
engineer, surveyor or appraiser for the account of Mortgagor in connection with
the use or development of, or construction of improvements on or to, any of the
Land;
4
<PAGE>
(l) PERMITS AND APPROVALS. All use permits, rights under
tentative, preliminary or final maps, subdivision applications and all other
zoning, regulatory and use approvals and permits including extension, renewal
and modification rights, relating to the use, development or sale of any of the
Property;
(m) PROFESSIONAL CONTRACT RIGHTS. All contracts with property
managers, real estate advisors and consultants, real estate brokers and other
like agents and professionals, which relate to any of the Property or any
improvements contracted or to be constructed thereon, and all maps, reports,
surveys and studies of or relating to any of the Property or any improvements
constructed or to be constructed thereon, now or hereafter in the possession of
Mortgagor, or in the possession of any such agent or professional;
(n) PROCEEDS. All proceeds including insurance and condemnation
proceeds and products of any and all of the foregoing and any and all right,
title or interest that Mortgagor may hereafter acquire in and to any of the
foregoing;
(o) BOOKS AND RECORDS. All books and records pertaining to any
of the Property including, without limitation, all computer hardware and
software and all equipment and tangible personal property in which such books
and records are kept.
Notwithstanding that this Mortgage is granted with Mortgage Covenants,
Mortgagor and Mortgagee hereby expressly agree that Mortgagor does not covenant
or represent as follows:
(1) that the granted premises are free from all encumbrances;
and
(2) that the Mortgagor will together with heirs, executors,
administrators and successors warrant and defend the same to the Mortgagee and
its heirs, successors and assigns forever against the lawful claims and demands
of all persons.
2. ASSIGNMENT OF RENTS. Mortgagor absolutely and unconditionally
assigns to Mortgagee the Rents upon the terms and conditions hereinafter set
forth. This assignment is absolute, primary and direct and is not intended to
be a separate or secondary pledge, or other form of additional security, and no
further act or step is or shall be required of Mortgagee to perfect this
assignment. This assignment shall not impose upon Mortgagee any duty to cause
the Property to produce any Rents nor shall Mortgagee be deemed to be a
mortgagee-in-possession by reason thereof for any purpose.
3. OBLIGATIONS SECURED BY THIS MORTGAGE. This Mortgage secures the
following obligations (collectively, the "Secured Obligations"):
5
<PAGE>
(a) MORTGAGE. The performance of each and every agreement,
obligation, or covenant of Mortgagor herein contained or incorporated by
reference;
(b) SECURED OBLIGATIONS. Prompt payment and performance of
(i) all now existing and hereafter arising "Liabilities" of Mortgagor as defined
in and secured by the Collateral Agreement (including, without limitation,
repayment of the Notes, as defined and described in the Indenture), (ii) any and
all other obligations, liabilities or indebtedness of Mortgagor to Mortgagee,
however incurred, whether absolute or contingent and whether now existing or
hereafter arising contained in any agreement reciting that it is so secured, and
(iii) any extensions, modifications, renewals or substitutions of any of the
foregoing, including, without limitation, any new or additional promissory notes
or loan documents executed in connection therewith;
(c) OTHER DOCUMENTS. Performance of each and every agreement,
obligation, or covenant of Mortgagor contained in any of the Documents,
including, without limitation the Plan of Reorganization Proposed by Mortgage
and Realty Trust (dated July 12, 1995) and confirmed by the Court on September
22, 1995 pursuant to the Order (1) Approving Disclosure Statement and
Prepetition Solicitation; and (2) Confirming the Plan of Reorganization Proposed
by Mortgage and Realty Trust (as confirmed, the "Plan").
(d) ADDITIONAL SUMS. Payment of such further sums or advances
as Mortgagor or the then record owner of the Property may hereafter become
obligated to pay to Lenders or Mortgagee or their successors and assigns, when
evidenced by a Promissory Note or other instrument or agreement reciting that it
is so secured hereby.
TO PROTECT THE SECURITY OF THIS MORTGAGE AND TO EFFECT THE FOREGOING ASSIGNMENT
OF RENTS, THE PARTIES AGREE AS FOLLOWS:
4. COVENANTS AND REPRESENTATIONS OF MORTGAGOR. Mortgagor shall
perform and observe all covenants and representations applicable to the Property
or any of it contained in the Plan and the Collateral Agreement.
5. PAYMENT AND PERFORMANCE OF CREDITOR OBLIGATIONS. Mortgagor shall
pay the creditor obligations (as defined in the Plan) at the times and places
and in the manner specified in the Plan. Mortgagor shall perform all the
Liabilities in accordance with the provisions of the Plan. Mortgagor shall
perform all obligations contained in the Documents.
6
<PAGE>
6. PAYMENT OF IMPOSITIONS.
(a) Subject to the provisions of subparagraph (c), below,
Mortgagor shall pay and discharge all taxes of every kind and nature (including,
without limitation, all real and personal property taxes and assessments,
income, franchise, withholding, profits and gross receipts taxes), all general
and special assessments, levies, permits, inspection and license fees, all water
and sewer rents and charges and other public charges whether of a like or
different nature, foreseen or unforeseen, ordinary or extraordinary, public or
private, imposed upon or assessed against Mortgagor or any of the Property
(including without limitation, any of the Property which is affixed to the Land,
or used in connection therewith and owned by the Mortgagor) and other space
beyond the lot line and on or abutting the public sidewalks in front of or
adjoining the Land (to the extent that the Mortgagor is liable therefor), or
arising in respect of the occupancy, use or possession thereof, together with
any penalties, late charges or interest on any of the foregoing (all of the
foregoing are hereinafter collectively referred to as the "Impositions").
(b) subject to the provisions of subparagraph (c) below, nothing
herein shall affect the right or remedy of Mortgagee under this Mortgage or
otherwise to pay any Imposition as and when provided by the terms of the
Collateral Agreement or the Plan. Any sums paid by or on behalf of Mortgagee in
discharge of any Impositions shall (i) constitute a lien and charge upon all the
Property and (ii) be payable by Mortgagor pursuant to the terms of the
Collateral Agreement. Nothing contained in this Mortgage shall be deemed to
waive or impair any right of Mortgagee to be subrogated to the rights of the
payee of any Imposition.
(c) The Plan and Collateral Agreement shall govern Mortgagor's
obligation to pay Impositions, including the right of Mortgagor to contest same,
or the liability of Mortgagor to Mortgagee for any payment pursuant to
subparagraph (b), above.
7. INSURANCE. As and to the extent required by the Plan or the
Collateral Agreement, Mortgagor shall maintain insurance for the Property and
name Mortgagee as an additional loss payee. Proceeds of insurance shall be
governed by the terms of the Plan and Collateral Agreement.
8. NO ENCUMBRANCES. Mortgagor shall not create, consent to or
suffer the creation of any lien, claim, charge, encumbrance, security interest
or levy on or in any of the Property other than as permitted under the Plan and
Collateral Agreement.
7
<PAGE>
9. LEASES.
(a) Leases, licenses, contracts for hire or rental agreements
pertaining to the use or occupancy of any of the Property entered into at any
time by Mortgagor or any predecessor to Mortgagor, as landlord or lessor, and
any other party, as tenant or lessee, shall hereinafter be referred to as
"Tenant Leases." Mortgagor represents that the Tenant Leases more fully
described on Exhibit B hereto constitute all the Tenant Leases in existence as
of the date hereof.
(b) Mortgagor shall receive Rents, in trust for the benefit of
Mortgagee, for the purpose of paying the Secured Obligations and any other costs
associated with the performance of the Liabilities then due, if any; provided,
however, that nothing contained in this subparagraph shall impair any right of
Mortgagor to retain or use Rents under the terms of the Plan.
(c) Mortgagor shall (i) give written notice to Mortgagee (as
part of Mortgagor's normal reporting under the terms of the Plan) of the
entering into of any new Tenant Lease, including a copy thereof and (ii) upon
the written request of Mortgagee, and, only where required by the law applicable
to such Tenant Lease in order to perfect Mortgagee's lien upon or rights to such
Tenant Lease, execute, acknowledge and deliver, in form satisfactory to
Mortgagee, one or more separate assignments of the lessor's interest under any
Tenant Lease. Mortgagor shall pay to Mortgagee the expenses incurred by
Mortgagee in connection with the preparation and recording of any such
instrument.
10. EMINENT DOMAIN; CONDEMNATION. Mortgagor shall give prompt
written notice to Mortgagee of any condemnation or eminent domain proceeding
affecting the Property. Proceeds of any condemnation or eminent domain
proceeding affecting the Property shall be governed by the terms of the Plan and
Collateral Agreement.
11. FURTHER ASSURANCES/ESTOPPEL CERTIFICATES. As and to the extent
required by the Collateral Agreement, Mortgagor shall do, execute, acknowledge
and deliver, at the sole cost and expense of Mortgagor, all and every such
further acts, deeds, conveyances, mortgages, deeds of trust, assignments,
estoppel certificates, notices of assignment, transfers and assurances as
Mortgagee may reasonably require from time to time in order to better assure,
convey, assign, transfer, record, perfect or confirm unto Mortgagee, the rights
intended to be granted to the Mortgagee, as the case may be, under this
Mortgage, or any of the Documents. Mortgagor hereby appoints Mortgagee its
attorney-in-fact with the power to execute, acknowledge or deliver any document,
agreement or instrument to which Mortgagee is entitled pursuant to this section.
The power granted to Mortgagee in this section shall be coupled with an interest
and shall be irrevo-
8
<PAGE>
cable until such time as Mortgagee voluntarily releases its rights hereunder.
12. MORTGAGOR'S EXISTENCE. Mortgagor shall do all things necessary
to preserve and keep in full force and effect its existence, franchises, rights
and privileges under the laws of the State in which the Property is located and
its right to own property and transact business in such State.
13. CHANGE OF NAME. Mortgagor shall not change its name or address
of its chief executive office without giving thirty (30) days prior notice to
Mortgagee.
14. RIGHT OF INSPECTION. Mortgagee, or its agent or employees, may
enter upon the Property at any reasonable time for the purpose of inspecting
same and ascertaining the compliance of Mortgagor with the terms hereof.
15. INTENTIONALLY OMITTED.
16. INTENTIONALLY OMITTED.
17. COLLECTION OF RENTS, ISSUES AND PROFITS. Mortgagee confers upon
Mortgagor the authority to collect and retain the Rents as they become due and
payable; PROVIDED, HOWEVER, that Mortgagee may at any time after the occurrence
of a Default (as hereinafter defined) and without regard to the value of the
security, in Mortgagee's sole discretion and without notice to Mortgagor, revoke
said authority and may collect and retain any or all of the Rents, without
taking possession of all or any part of the Property. The right to collect
Rents as herein provided shall not be deemed to grant to Mortgagee the right to
possession of the Property, except as expressly herein provided, or to impose
upon Mortgagee the duty to produce any Rents or maintain the Property in whole
or in part. Any Rents collected by Mortgagee may be applied by Mortgagee, in
its sole discretion, against any of the Secured Obligations whether now existing
or hereafter arising. Collection of any Rents by Mortgagee shall not waive any
other right or remedy of Mortgagee hereunder or any notice of default given
hereunder or invalidate any acts done pursuant to notice.
18. DEFAULTS. The occurrence of any Event of Default under (and as
defined and particularly described in) the Plan and Collateral Agreement shall
constitute a default (a "Default") by Mortgagor hereunder.
19. RIGHTS AND REMEDIES. Following the occurrence of a Default and
upon the instruction of Lenders pursuant to the Plan, Mortgagee, in its sole
discretion, shall have any and all of the following rights and remedies without
regard to the adequacy of any security for the obligations and indebtedness
hereby secured:
9
<PAGE>
(a) ACCELERATION OF MATURITY. In accordance with the Plan, to
declare the Liabilities immediately due and payable, without presentment,
demand, protest or further notice of any kind, all of which are expressly waived
by Mortgagor. Any Acceleration may be rescinded and annulled by Lenders
pursuant to Lenders Action. No such rescission and annulment shall affect any
subsequent Default or Acceleration or impair any right of any Lender with
respect to any subsequent Default or Acceleration;
(b) PERFORMANCE OF MORTGAGEE. With or without notice and
without releasing Mortgagor from any obligation hereunder, to cure any default
under any agreement affecting the security hereof and in connection therewith to
enter upon the Property and do such acts and things as Mortgagee deems necessary
or desirable to protect the security hereof including (i) appear in and defend
any action or proceeding purporting to affect the security hereof or the rights
or powers of Mortgagee hereunder, (ii) pay, purchase, contest or compromise any
encumbrance, charge, lien or claim of lien as and to the extent authorized by
the terms of the Plan and Collateral Agreement, (iii) pay any premium or charge
with respect to insurance required to be carried hereunder or in the Plan or
Collateral Agreement, or (iv) employ counsel, accountants, contractors and other
appropriate persons to assist either of them;
(c) PROCEEDINGS. To commence and maintain an action or actions,
or other case or proceeding, in any court of competent jurisdiction, to
foreclose this instrument as a mortgage, for appointment of a receiver, or for
specific enforcement of the covenants of Mortgagor hereunder, and Mortgagor
agrees that such covenants shall be specifically enforceable by injunction or
any other appropriate equitable remedy;
(d) POSSESSION OF PROPERTY; APPOINTMENT OF RECEIVER.
Irrespective of whether Mortgagee exercises the option provided in subparagraph
(a) above, to enter upon, take possession of, manage and operate the Property or
any part thereof in person or by agent or by court-appointed receiver; to make,
terminate, enforce or modify leases of the Property upon such terms and
conditions as Mortgagee deems proper, make repairs, alterations and improvements
to the Property or develop the Property, for the purpose of protecting or
enhancing the security hereof, and Mortgagor agrees to pay all expenses of
action so taken only as and to the extent required by the Collateral Agreement
and the Plan and the payment thereof shall be secured hereby. All sums realized
by Mortgagee hereunder, less all costs and expenses, including reasonable
attorneys' fees, and less such sum as Mortgagee deems necessary and appropriate
as a reserve to meet such future expenses, shall be applied upon any
indebtedness secured hereby in such order as Mortgagee, in its sole discretion,
shall determine. Neither application of said sums to said indebtedness nor any
other action taken by Mortgagee hereunder shall waive any other right or remedy
of Mortgagee
10
<PAGE>
hereunder or any notice of default hereunder or nullify the effect of any such
notice of default. Any action taken under this subparagraph may be taken by
Mortgagee or any employee or agent of Mortgagee with or without bringing any
action or proceeding, or may be taken by a receiver appointed by a court, and
any such action may be taken without regard to the adequacy of the security for
the indebtedness secured hereunder and whether or not notice of default has been
recorded, and Mortgagor consents to the appointment of a receiver hereunder;
(e) SALE OF PROPERTY. Without prior notice to Mortgagor, to
execute a written notice of such default and of Mortgagee's election to cause
the Property to be sold to satisfy all or any of the Secured Obligations. Such
notice of sale shall be given and recorded as then required by law as a
condition for conducting a sale by Mortgagee. When the minimum period of time
required by law after such notice has elapsed, Mortgagee, without demand on
Mortgagor, shall sell the Property at the time and place of sale fixed by it in
the notice of sale, either as a whole or in separate parcels and in such order
as it or Mortgagee may determine, at a public auction to the highest bidder for
cash in lawful money of the United States, payable at time of sale. Mortgagee
may hold one or more sales of all or any portion of the Property by public
announcement at such time and place of sale, and from time to time thereafter
may postpone such sale or sales of all or any portion of the Property by public
announcement at such time fixed by the preceding postponement. Mortgagee shall
deliver to the Purchaser at such sale or sales its deed or bill of sale
conveying the property so sold, but without any covenant or warranty, express or
implied. The recitals in such deed or bill of sale of any matters or facts
shall be conclusive proof of the truthfulness thereof. Any person including
Mortgagor or Mortgagee may purchase at such sale. If Mortgagee is the
successful purchaser, it may apply any of the outstanding obligations secured
hereby in settlement of the purchase price. After deducting all costs, fees and
expenses of Mortgagee and of this Mortgage, including costs of evidence of title
and reasonable attorneys' fees in connection with such sale, Mortgagee shall, if
permitted by applicable law, apply the proceeds of sale, if any, to payment of
(i) all sums expended by or on behalf of Mortgagee under the terms hereof not
then repaid, with accrued interest thereon at the legal rate, (ii) the payment
of the Secured Obligations pursuant to the instructions of Mortgagee, and (iii)
the remainder, if any, to the person or persons legally entitled thereto.
20. UNIFORM COMMERCIAL CODE SECURITY AGREEMENT AND FINANCING
STATEMENT. This Mortgage is a security agreement and financing statement
pursuant to the Uniform Commercial Code for any of the items specified above as
part of the Property which, under applicable law, may be subject to a security
interest pursuant to the Uniform Commercial Code, and Mortgagor hereby grants
Mortgagee a security interest in said terms. This
11
<PAGE>
Mortgage is filed as a fixture filing and covers goods which are or are to
become fixtures. The address of Mortgagee (secured party) from which
information concerning the security interest may be obtained and the mailing
address of Mortgagor (debtor) are set forth on the first page of this Mortgage.
The types, or items, of collateral are described in Paragraph 1 of this
Mortgage. Mortgagor agrees that Mortgagee may file any appropriate document in
the appropriate index as a financing statement for any of the items specified
above as part of the Property. In addition, Mortgagor agrees to execute and
deliver to Mortgagee, upon Mortgagee's request, any financing statements, as
well as extensions, renewals and amendments thereof, and reproductions of this
instrument in such form as Mortgagee may require to perfect a security interest
with respect to said items. Mortgagor shall pay all costs of filing such
financing statements and any extensions, renewals, amendments, and releases
thereof, and shall pay all reasonable costs and expenses of any record searches
for financing statements Mortgagee may reasonably require. Without the prior
written consent of Mortgagee, Mortgagor shall not create or suffer to be created
pursuant to the Uniform Commercial Code any other security interest in said
items, including replacements and additions thereto except as otherwise
expressly permitted in the Collateral Agreement or Plan. Upon a Default,
Mortgagee shall have the remedies of a secured party under the Uniform
Commercial Code and, at Mortgagee's option, may also invoke the other remedies
provided in this Mortgage and the Collateral Agreement as to such items. In
exercising any of said remedies, Mortgagee may proceed against the items of real
property and any items of personal property specified above as part of the
Property separately or together and in any order whatsoever, without in any way
affecting the availability of Mortgagee's rights or remedies under the Uniform
Commercial Code or of the other remedies provided in this Mortgage, in the
Collateral Agreement, or by law.
TO MAKE MORTGAGEE'S RIGHT TO ENFORCE REMEDIES HEREUNDER MORE FLEXIBLE AND
EFFECTIVE, THE PARTIES ADDITIONALLY AGREE:
21. REMEDIES CUMULATIVE. All rights and remedies of Mortgagee
hereunder are cumulative and in addition to all rights and remedies provided by
law and by the Collateral Agreement.
22. MARSHALLING. Mortgagor hereby waives any marshalling equity or
other right to inhibit, delay or restrict any sale or other disposition of the
Property or any part thereof by Mortgagee or to direct the order of such sale or
sales or other disposition.
23. NOTICE OF SALE. Any power granted to Mortgagee in this Mortgage
may be exercised, pursuant to a single notice of trustee's sale, separately with
respect to each and every item or parcel of Property or with respect to groups
and assemblages of Property, in Mortgagee's sole discretion, and may be
exercised on
12
<PAGE>
separate days or at separate times or in separate places; the exercises of such
power of sale shall not be an action for purposes of any law or statute
pertaining to actions to enforce secured transactions.
24. JURY TRIAL. Each of the parties hereto waives any right it may
have to trial by jury.
BECAUSE COLLATERAL FOR THE SECURED OBLIGATIONS IS LOCATED IN DIFFERENT STATES,
THE MORTGAGOR AGREES TO WAIVE CERTAIN ADDITIONAL RIGHTS RESPECTING THE
ENFORCEMENT OF REMEDIES, AS FOLLOWS:
25. REDEMPTION AND VALUATION. As and to the fullest extent permitted
by law, Mortgagor waives any statutory right of redemption following any sale or
other disposition of Property by Mortgagee and any right to have Property which
is sold or otherwise disposed of by Mortgagee valued after such sale or
disposition, so that the total deficiency then remaining may be bid in any order
and in any party by Mortgagee at any other sale until the debt is satisfied in
full or the final deficiency then remaining shall be reducible to judgment
against Mortgagor by any court of competent jurisdiction; provided that the
value of the Property sold or otherwise disposed of by Mortgagee shall, to the
extent required by the law of the jurisdiction in which such Property is
located, be taken into account before entering a deficiency judgment against
Mortgagor.
26. DEFENSES. Any defense available to Mortgagor with respect to or
as a result of a sale or other disposition of any Property pursuant to this
section within one state shall not be available to Mortgagor with respect to any
Property located in any other state.
27. SALE OF PROPERTY. Following the occurrence of a Default and upon
the instruction of Lenders pursuant to the Plan, Mortgagee shall be entitled to
sell or dispose of any Property or any part thereof pursuant to this Mortgage 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 Mortgagor affecting Mortgagee's sole
discretion to sell or dispose of the Property or any part thereof in one action
rather than in multiple actions, en masse rather than by parcel, or in
satisfaction of all the indebtedness then secured by such Property rather than
of any part of the indebtedness designated by the Mortgagee in its sole
discretion, and for that purpose, and as and to the extent required to make the
remaining waivers, representations and agreements set forth in this section and
permitted by law, Mortgagor hereby disclaims any right and waives any defense
under:
13
<PAGE>
(a) California Code of Civil Procedure Section 580d, concerning
the bar against rendition of a deficiency judgment after foreclosure under a
power of sale,
(b) California Code of Civil Procedure Section 726, concerning
the form of foreclosure proceedings with respect to real property security
located in California,
(c) California Civil Code Section 1479, concerning the
application of general performance under several obligations to one creditor,
(d) California Civil Code, Section 2924g, concerning the conduct
of trustee's sales,
(e) California Civil Code Section 3433, concerning the relative
rights of different creditors interested in the same property, and
(f) Any laws or equitable principles in any other states in the
United States of America similar to the laws delineated in subparagraphs (a),
(b), (c), (d), and (e) above.
GENERAL PROVISIONS
28. NON-WAIVER.
(a) By accepting payment of any amount after its due date or
late performance of any obligation secured hereby, Mortgagee will not waive its
right either to require prompt payment when due of any other amounts or prompt
performance of any other obligations so secured or to declare a default for
failure to pay or perform when due. No exercise of any right or remedy by
Mortgagee hereunder shall constitute a waiver of any other right or remedy
herein contained or provided by law.
(b) No waiver by Mortgagee will be effective unless it is in
writing and then only to the extent specifically stated. Without limiting the
generality of the foregoing, any payment made by the Mortgagee for insurance
premiums, Impositions or any other charges affecting the Property, shall not
constitute a waiver of Mortgagor's default in making such payments and shall not
obligate Mortgagee to make any further payments.
(c) Mortgagor agrees that in the event that any or all of such
Property is sold subject to this Mortgage and Mortgagee enters into any
agreement with the then owner of such Property respecting, or extending the time
for, payment of all or any part of the Secured Obligations, or otherwise
modifying any of the terms hereof, Mortgagor shall continue to be liable for the
Secured Obligations pursuant to the terms of the Plan and Collateral Agreement.
14
<PAGE>
29. INTENTIONALLY OMITTED.
30. SUCCESSORS AND ASSIGNS. The word "Mortgagee" hereunder means the
Mortgagee named herein or any successor in interest thereto. This Mortgage is
binding upon and inures to the benefit of any successor to or assignee of any
party hereto.
31. RULES OF CONSTRUCTION. Except as otherwise specifically provided
in this Mortgage, the singular of any term shall include the plural; the use of
any term shall be equally applicable to any gender; "or" shall not be exclusive;
and "including" shall not be limiting. Specific enumeration of rights, powers
and remedies of Mortgagee and of acts which it may do and of acts to be done and
not to be done by Mortgagor is not to be deemed to exclude or limit the general.
The captions, headings and arrangements used in this Mortgage are for
convenience only and do not in any way affect, limit, amplify or modify the
terms and provisions hereof.
32. LITIGATION RIGHTS. To the extent authorized in the Collateral
Agreement, Mortgagee shall have the right (a) to appear in and defend any action
or proceeding, in the name and on behalf of Mortgagor which Mortgagee, in its
sole discretion, determines may adversely affect the Property or this Mortgage;
and (b) to institute any action or proceeding which Mortgagee, in its
discretion, feels should be brought to protect its interest in the Property or
their respective rights hereunder. All costs and expenses incurred by Mortgagee
in connection with such actions or proceedings, including, without limitation,
reasonable attorneys' fees and costs shall be paid by Mortgagor, on demand.
33. ATTORNEYS' FEES. Mortgagor shall be liable for any attorneys'
fees or costs incurred by Mortgagee with regard to the collection, perfection or
enforcement of any right or remedy provided for herein pursuant to the
provisions of the Plan and Collateral Agreement.
34. SEVERABILITY. If any term of this Mortgage or the application
thereof to any person or circumstances shall to any extent be invalid, illegal
or unenforceable, the remainder of this Mortgage shall not be affected thereby
and each term of this Mortgage shall be valid and enforceable to the fullest
extent permitted by law and to persons or circumstances other than those as to
which it is invalid, illegal and unenforceable.
35. MERGER. The lien of this Mortgage shall not merge with the lien
of any other mortgage or Mortgage created by Mortgagor or the then record owner
of the Property for the benefit of Mortgagee or otherwise held or acquired by
Mortgagee and encumbering all or any portion of the Property.
36. APPLICABLE LAW AND JURISDICTION. This Mortgage and the rights
and remedies of the parties hereto in respect of
15
<PAGE>
the Property shall be governed by, and construed and interpreted in accordance
with, the internal laws (as opposed to conflicts of law provisions) of the
Commonwealth of Pennsylvania. The parties hereto hereby submit to the
jurisdiction of the courts of the Commonwealth of Pennsylvania. However, to the
extent the Commonwealth of _____________ law requires its law to be applicable
for purposes of enforcement of Lenders' remedies with respect to the Property,
then for such limited purpose the law of the Commonwealth of _____________ shall
apply; PROVIDED, HOWEVER, that where the Commonwealth of _____________ permits
or otherwise does not prohibit the parties to waive the applicability of
_____________ law, the parties hereby waive applicability or _____________ law.
37. NOTICES. Whenever it is provided herein that notice, demand,
request, consent, approval or other communication shall or may be given to or
served upon either Mortgagor or Mortgagee by the other, or whenever either of
such parties desire to give or serve upon the other any notice, demand, request,
consent approval or other communication with respect to this Mortgage to the
Property, each such notice, demand, request, consent, approval or other
communication shall be in writing (including by telex transmission) and shall be
deemed to have been sufficiently given or served for all purposes when actually
delivered or, in the case of telex notice, when sent, answer back received, or
in the case of notice by facsimile transmission, when received telephonically
confirmed in the manner set forth in the Collateral Agreement, or to such other
address as may be substituted by notice given as herein provided.
38. RELEASES. This Mortgage is subject to being released in whole or
in part upon the happening of certain events, as more fully set forth in the
Collateral Agreement.
39. INTENTIONALLY OMITTED.
40. CONSISTENCY WITH PLAN. The parties hereto agree that all actions
taken by the parties hereto and all interpretations of all terms and provisions
hereof shall be taken or interpreted (as the case may be) in a manner consistent
with the Plan. The provisions of section 36, above, are hereby deemed to be
consistent with the Plan.
41. EXECUTION OF THIS MORTGAGE. This Mortgage has been executed on
behalf of the Mortgagor by the ____________ in his capacity as
______________________________ Mortgagor. As provided in section 7.2 of the
declaration of trust of Mortgagor, no trustee, officer, agent or shareholder of
Mortgagor shall be bound or held to any personal liability in connection with
the obligations of Mortgagor arising out of the execution of this Mortgage. The
execution of this Mortgage by the said individual shall not bind the said
individual and he shall not be held to
16
<PAGE>
any personal liability in connection with the obligations under this Mortgage as
a result of such execution.
IN WITNESS WHEREOF, Mortgagor has executed this Mortgage as a sealed
instrument as of the day and year set forth above. Mortgagor hereby requests
that a copy of any notice of default and any notice of sale hereunder be mailed
to it at its address set forth on the first page of this Mortgage.
("Mortgagor")
MORTGAGE AND REALTY TRUST,
a Maryland real estate
investment trust
By:_____________________________
Title:__________________________
17
<PAGE>
EXHIBIT D-1
FORM OF AMENDMENT TO MORTGAGE
(begins on following page)
<PAGE>
STATE:________________________
MRT No.________________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
SECOND AMENDMENT TO
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
-------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS SECOND AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "SECOND AMENDMENT") is made as of September
29, 1995, by and between MORTGAGE AND REALTY TRUST (alternatively referred to
herein as either "MRT" or "TRUSTOR"), a Maryland real estate investment trust,
having an office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania
19117, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, and
WILLIAM J. WADE, acting not in their individual capacities but solely as
Collateral Agents for Lenders under and pursuant to the Collateral Agreement
(hereinafter defined) (Wilmington Trust Company and William J. Wade, together,
"BENEFICIARY"), whose mailing address and address from which information
concerning its security interest may be obtained is MRT Collateral Agent, c/o
William J. Wade, Esq., Richards, Layton & Finger, One Rodney Square, P.O. Box
551, Wilmington, Delaware 19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H
WHEREAS, in accordance with that certain Joint Plan of Reorganization
of MRT dated November 19, 1990, and confirmed on February 27, 1991 by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT"), MRT
delivered to Beneficiary that certain Deed of Trust,
<PAGE>
Assignment of Rents, Security Agreement and Fixture Filing (the "ORIGINAL DEED
OF TRUST"), more particularly described on the attached SCHEDULE "I", which
Original Deed of Trust encumbers certain real property more particularly
described on the attached EXHIBIT "A";
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Beneficiary and
Lenders amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), (ii) MRT and Beneficiary entered into that certain
Indenture dated as of July 15, 1992 (the "1992 INDENTURE"), and (iii) MRT and
Beneficiary amended the Original Deed of Trust by that certain First Amendment
of Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing
dated as of July 15, 1992 (the "FIRST AMENDMENT TO DEED OF TRUST") (the Original
Deed of Trust, as amended by the First Amendment to Deed of Trust, the "DEED OF
TRUST");
WHEREAS, in accordance with that certain Plan of Reorganization
proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Beneficiary and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Beneficiary entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces
in its entirely the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Deed of Trust to
reflect the amendments and modifications set forth in
2
<PAGE>
the 1995 Plan, the Indenture and the 1995 Amended Collateral Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that the Deed of Trust is amended as follows:
1. REFERENCES. All references in the Deed of Trust to the
"Collateral Agreement" are hereby deemed to refer to the Original Collateral
Agreement as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement; all references in
the Deed of Trust to the "Plan" are hereby deemed to refer to the 1995 Plan. In
each instance where the Deed of Trust is to be governed by, or is subject to,
the terms of the Plan or the Collateral Agreement, the Deed of Trust shall also
be governed by, or be subject to, the terms of the Indenture. The Deed of Trust
is hereby incorporated herein by this reference (subject to the modifications
set forth in this Second Amendment), and Trustor hereby restates the grants,
assignments and conveyances made by Trustor in the Deed of Trust as if set forth
in their entirety herein, it being the intent of the parties hereto that the
Deed of Trust, as amended hereby, secures and shall continue to secure the
Liabilities of MRT (including, without limitation, repayment of the Notes) under
and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan Amendment and as
further modified by the 1995 Plan, (ii) the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement, and (iii) the Deed of Trust,
as amended by this Second Amendment.
2. RATIFICATION OF LIEN. Neither this Second Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of) the Deed
of Trust or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Deed of Trust, and the Deed of Trust
and the lien created thereby is hereby ratified and confirmed in all respects
and remains validly existing and in full force and effect. For purposes of the
Deed of Trust, as amended by this Second Amendment, the term "Liabilities" shall
not impose on MRT any greater indebtedness, liability or obligation than as such
term was defined prior to the date of this Second Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This Second Amendment has
been executed on behalf of Trustor by the Treasurer and Chief Financial Officer
in his capacity as an officer of Trustor. As provided in section 7.2 of the
declaration of trust of Trustor, no trustee, officer, agent or shareholder of
Trustor shall be bound or held to any personal liability in connection
3
<PAGE>
with the obligations of Trustor arising out of the execution of this Second
Amendment. The execution of this Second Amendment by the said individual shall
not bind the said individual and he shall not be held to any personal liability
in connection with the obligations under this Second Amendment as a result of
such execution.
4. COUNTERPARTS. This Second Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL DEED OF TRUST. Except as amended
hereby, the Deed of Trust is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
TRUSTOR:
MORTGAGE AND REALTY TRUST, a Maryland real estate
investment trust
By: ____________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief
Financial Officer
BENEFICIARY:
WILMINGTON TRUST COMPANY, a Delaware banking
corporation, not in its individual capacity but
solely as Collateral Agent for Lenders
By: ____________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
________________________________
WILLIAM J. WADE, not in his
individual capacity but solely as
Collateral Agent for Lenders
5
<PAGE>
Schedule "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
Exhibit "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:________________________
MRT No._______________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
SECOND AMENDMENT TO ASSIGNMENT
OF MORTGAGE AND OTHER RECORDED DOCUMENTS
----------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS SECOND AMENDMENT TO ASSIGNMENT OF MORTGAGE AND OTHER
RECORDED DOCUMENTS (this "SECOND AMENDMENT") is made as of September 29, 1995 by
and between MORTGAGE AND REALTY TRUST (alternatively referred to herein as
either "MRT" or "ASSIGNOR"), a Maryland real estate investment trust, having an
office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania 19117, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM J. WADE,
acting not in their individual capacities but solely as Collateral Agents for
Lenders under and pursuant to the Collateral Agreement (hereinafter defined)
(Wilmington Trust Company and William J. Wade, together "ASSIGNEE"), whose
mailing address and address from which information concerning its security
interest may be obtained is MRT Collateral Agent, c/o William J. Wade, Esq.,
Richards, Layton & Finger, One Rodney Square, P.O. Box 551, Wilmington, Delaware
19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H :
WHEREAS, in accordance with that certain Joint Plan of Reorganization
of MRT dated November 19, 1990, and confirmed on February 27, 1991, by the
United States Bankruptcy Court for the Central District of California (as
heretofore amended, the "1990 PLAN"), and that certain Collateral and Security
Agreement dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT"),
MRT delivered to Assignee that certain Assignment of Mortgage and Other Recorded
Documents (the "ORIGINAL ASSIGNMENT"), more particularly described on the
attached SCHEDULE "I", pursuant to which Original Assignment Assignor assigned
to Assignee a
<PAGE>
mortgage and other documents encumbering and affecting certain real property
more particularly described on the attached EXHIBIT "A";
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Assignee
and Lenders, amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), (ii) MRT and Assignee entered into that certain
Indenture, dated as of July 15, 1992 (the "1992 INDENTURE"), and (iii) MRT and
Assignee amended the Original Assignment by that certain First Amendment to
Assignment of Mortgage and Other Recorded Documents dated as of July 15, 1992
(the "FIRST AMENDMENT TO ASSIGNMENT") (the Original Assignment, as amended by
the First Amendment to Assignment, the "Assignment");
WHEREAS, in accordance with that certain Plan of Reorganization
proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust, a copy of which Order is attached hereto
and incorporated herein (as confirmed, the "1995 PLAN"), MRT modified the term
and reduced the principal amount of indebtedness due to Holders and, to evidence
such reduced principal amount, issued replacement Notes in the aggregate
principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Assignee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Assignee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Assignment to reflect
the amendments and modifications set forth in the 1995 Plan, the Indenture and
the 1995 Amended Collateral Agreement.
2
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Assignment is amended as follows:
1. REFERENCES. All references in the Assignment to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the
Assignment to the "Plan" are hereby deemed to refer to the 1995 Plan. In each
instance where the Assignment is to be governed by, or is subject to, the terms
of the Plan or the Collateral Agreement, the Assignment shall also be governed
by, or be subject to, the terms of the Indenture. The Assignment is hereby
incorporated herein by this reference (subject to the modifications set forth in
this Second Amendment), and Assignor hereby restates the grants, assignments and
conveyances made by Assignor in the Assignment as if set forth in their entirety
herein (and confirms that the Assignment assigned and conveyed to Assignee all
of the documents described in the Assignment, and all of Assignor's beneficial
and other rights and interests therein), it being the intent of the parties
hereto that the Assignment, as amended hereby, secures and shall continue to
secure the Liabilities of MRT (including, without limitation, repayment of the
Notes) under and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan
Amendment and as further modified by the 1995 Plan, (ii) the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement, and (iii) the
Assignment, as amended by this Second Amendment.
2. RATIFICATION OF LIEN. Neither this Second Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of) the
Assignment or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Assignment, and the Assignment and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Assignment, as
amended by this Second Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this Second Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This Second Amendment has
been executed on behalf of Assignor by the Treasurer and Chief Financial Officer
in his capacity as an officer of Assignor. As provided in section 7.2 of the
declaration of trust of Assignor, no trustee, officer, agent or shareholder of
Assignor shall be bound or held to any personal
3
<PAGE>
liability in connection with the obligations of Assignor arising out of the
execution of this Second Amendment. The execution of this Second Amendment by
the said individual shall not bind the said individual and he shall not be held
to any personal liability in connection with the obligations under this Second
Amendment as a result of such execution.
4. COUNTERPARTS. This Second Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL ASSIGNMENT. Except as amended hereby,
the Assignment is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
ASSIGNOR:
MORTGAGE AND REALTY TRUST, a
Maryland real estate investment
trust
By:__________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief
Financial Officer
ASSIGNEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not
in its individual capacity but
solely as Collateral Agent for
Lenders
By:___________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
______________________________
WILLIAM J. WADE, not in his
individual capacity but solely as
Collateral Agent for Lenders
5
<PAGE>
Schedule "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
Exhibit "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:____________________________
MRT No.___________________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
SECOND AMENDMENT TO ASSIGNMENT OF
DEED OF TRUST AND OTHER RECORDED DOCUMENTS
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS SECOND AMENDMENT TO ASSIGNMENT OF DEED OF TRUST AND OTHER
RECORDED DOCUMENTS (this "SECOND AMENDMENT") is made as of September 29, 1995 by
and between MORTGAGE AND REALTY TRUST (alternatively referred to herein as
either "MRT" or "ASSIGNOR"), a Maryland real estate investment trust, having an
office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania 19117, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM J. WADE,
acting not in their individual capacities but solely as Collateral Agents for
Lenders under and pursuant to the Collateral Agreement (hereinafter defined)
(Wilmington Trust Company and William J. Wade, together, "ASSIGNEE"), whose
mailing address and address from which information concerning its security
interest may be obtained is MRT Collateral Agent, c/o William J. Wade, Esq.,
Richards, Layton & Finger, One Rodney Square, P.O. Box 551, Wilmington, Delaware
19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H :
WHEREAS, in accordance with that certain Joint Plan of Reorganization
of MRT dated November 19, 1990, and confirmed on February 27, 1991, by the
United States Bankruptcy Court for the Central District of California (as
heretofore amended, the "1990 PLAN"), and that certain Collateral and Security
Agreement dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT"),
MRT delivered to Assignee that certain Assignment of Deed of Trust and
Other Recorded Documents (the "ORIGINAL ASSIGNMENT"), more particularly
described on the attached SCHEDULE "I",
<PAGE>
pursuant to which Original Assignment Assignor assigned to Assignee a deed of
trust and other documents encumbering and affecting certain real property more
particularly described on the attached EXHIBIT "A";
WHEREAS, MRT entered into Amendment No. 2 to Plan of
Reorganization (the "1992 PLAN AMENDMENT"), pursuant to which MRT amended the
1990 Plan to, among other things, alter certain payment provisions with
respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT,
Assignee and Lenders, amended the Original Collateral Agreement by that
certain First Amendment to Collateral and Security Agreement (the "1992
AMENDMENT TO COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original
Collateral Agreement, as amended by the 1992 Amendment to Collateral
Agreement, the "1992 COLLATERAL AGREEMENT"), (ii) MRT and Assignee entered
into that certain Indenture, dated as of July 15, 1992 (the "1992
INDENTURE"), and (iii) MRT and Assignee amended the Original Assignment by
that certain First Amendment to Assignment of Deed of Trust and Other
Recorded Documents dated as of July 15, 1992 (the "FIRST AMENDMENT TO
ASSIGNMENT") (the Original Assignment, as amended by the First Amendment to
Assignment, the "ASSIGNMENT");
WHEREAS, in accordance with that certain Plan of Reorganization
Proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust, the "1995 PLAN"), MRT modified the term
and reduced the principal amount of indebtedness due to Holders and, to evidence
such reduced principal amount, issued replacement Notes in the aggregate
principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Assignee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Assignee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Assignment to reflect
the amendments and modifications set forth in the 1995 Plan, the Indenture and
the 1995 Amended Collateral Agreement.
2
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Assignment is amended as follows:
1. REFERENCES. All references in the Assignment to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the
Assignment to the "Plan" are hereby deemed to refer to the 1995 Plan. In each
instance where the Assignment is to be governed by, or is subject to, the terms
of the Plan or the Collateral Agreement, the Assignment shall also be governed
by, or be subject to, the terms of the Indenture. The Assignment is hereby
incorporated herein by this reference (subject to the modifications set forth in
this Second Amendment), and Assignor hereby restates the grants, assignments and
conveyances made by Assignor in the Assignment as if set forth in their entirety
herein (and confirms that the Assignment assigned and conveyed to Assignee all
of the documents described in the Assignment, and all of Assignor's beneficial
and other rights and interests therein), it being the intent of the parties
hereto that the Assignment, as amended hereby, secures and shall continue to
secure the Liabilities of MRT (including, without limitation, repayment of the
Notes) under and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan
Amendment and as further modified by the 1995 Plan, (ii) the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement, and (iii) the
Assignment, as amended by this Second Amendment.
2. RATIFICATION OF LIEN. Neither this Second Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of) the
Assignment or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Assignment, and the Assignment and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Assignment, as
amended by this Second Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this Second Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This Second Amendment has
been executed on behalf of Assignor by the Treasurer and Chief Financial Officer
in his capacity as an officer of Assignor. As provided in section 7.2 of the
declaration of trust of Assignor, no trustee, officer, agent or shareholder of
Assignor shall be bound or held to any personal
3
<PAGE>
liability in connection with the obligations of Assignor arising out of the
execution of this Second Amendment. The execution of this Second Amendment by
the said individual shall not bind the said individual and he shall not be held
to any personal liability in connection with the obligations under this Second
Amendment as a result of such execution.
4. COUNTERPARTS. This Second Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL ASSIGNMENT. Except as amended hereby,
the Assignment is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
ASSIGNOR:
MORTGAGE AND REALTY TRUST, a
Maryland real estate investment
trust
By:__________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief
Financial Officer
ASSIGNEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not
in its individual capacity but
solely as Collateral Agent for
Lenders
By:___________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
______________________________
WILLIAM J. WADE, not in his
individual capacity but solely as
Collateral Agent for Lenders
5
<PAGE>
SCHEDULE "I"
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
EXHIBIT "A"
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:________________________
MRT No.________________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
SECOND AMENDMENT TO
MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
-------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS SECOND AMENDMENT TO MORTGAGE, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "SECOND AMENDMENT") is made as of September
29, 1995, by and between MORTGAGE AND REALTY TRUST (alternatively referred to
herein as either "MRT" or "MORTGAGOR"), a Maryland real estate investment trust,
having an office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania
19117, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, and
WILLIAM J. WADE, acting not in their individual capacities but solely as
Collateral Agents for Lenders under and pursuant to the Collateral Agreement
(hereinafter defined) (Wilmington Trust Company and William J. Wade, together,
"MORTGAGEE"), whose mailing address and address from which information
concerning its security interest may be obtained is MRT Collateral Agent, c/o
William J. Wade, Esq., Richards, Layton & Finger, One Rodney Square, P.O. Box
551, Wilmington, Delaware 19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H:
WHEREAS, in accordance with that certain Joint Plan of Reorganization
of MRT dated November 19, 1990, and confirmed on February 27, 1991 by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT"), MRT
delivered to Mortgagee that certain Mortgage, Assignment of
<PAGE>
Rents, Security Agreement and Fixture Filing (the "ORIGINAL MORTGAGE"),
more particularly described on the attached SCHEDULE "I", which Original
Mortgage encumbers certain real property more particularly described on the
attached EXHIBIT "A";
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Mortgagee and
Lenders amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), (ii) MRT and Mortgagee entered into that certain
Indenture dated as of July 15, 1992 (the "1992 INDENTURE"), and (iii) MRT and
Mortgagee amended the Original Mortgage by that certain First Amendment
of Mortgage, Assignment of Rents, Security Agreement and Fixture Filing
dated as of July 15, 1992 (the "FIRST AMENDMENT TO Mortgage") (the Original
Mortgage, as amended by the First Amendment to Mortgage, the "MORTAGE");
WHEREAS, in accordance with that certain Plan of Reorganization
proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Mortgagee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Mortgagee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces
in its entirely the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Mortgage to
reflect the amendments and modifications set forth in
2
<PAGE>
the 1995 Plan, the Indenture and the 1995 Amended Collateral Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereto hereby agree
that the Mortgage is amended as follows:
1. REFERENCES. All references in the Mortgage to the
"Collateral Agreement" are hereby deemed to refer to the Original Collateral
Agreement as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement; all references in
the Mortgage to the "Plan" are hereby deemed to refer to the 1995 Plan. In
each instance where the Mortgage is to be governed by, or is subject to,
the terms of the Plan or the Collateral Agreement, the Mortgage shall also
be governed by, or be subject to, the terms of the Indenture. The Mortgage
is hereby incorporated herein by this reference (subject to the modifications
set forth in this Second Amendment), and Mortgagor hereby restates the grants,
assignments and conveyances made by Mortgagor in the Mortgage as if set
forth in their entirety herein, it being the intent of the parties hereto that
the Mortgage, as amended hereby, secures and shall continue to secure the
Liabilities of MRT (including, without limitation, repayment of the Notes) under
and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan Amendment and as
further modified by the 1995 Plan, (ii) the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement, and (iii) the Mortgage,
as amended by this Second Amendment.
2. RATIFICATION OF LIEN. Neither this Second Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of)
Mortgage or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Mortgage, and the Mortgage
and the lien created thereby is hereby ratified and confirmed in all respects
and remains validly existing and in full force and effect. For purposes of the
Mortgage, as amended by this Second Amendment, the term "Liabilities" shall
not impose on MRT any greater indebtedness, liability or obligation than as such
term was defined prior to the date of this Second Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This Second Amendment has
been executed on behalf of Mortgagor by the Treasurer and Chief Financial
Officer in his capacity as an officer of Mortgagor. As provided in section 7.2
of the declaration of trust of Mortgagor, no trustee, officer, agent or
shareholder of Mortgagor shall be bound or held to any personal liability in
connection with the obligations of Mortgagor arising
3
<PAGE>
out of the execution of this Second Amendment. The execution of this Second
Amendment by the said individual shall not bind the said individual and he shall
not be held to any personal liability in connection with the obligations under
this Second Amendment as a result of such execution.
4. COUNTERPARTS. This Second Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL Mortgage. Except as amended
hereby, the Mortgage is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
MORTGAGOR:
MORTGAGE AND REALTY TRUST,
a Maryland real estate investment trust
By: _____________________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief Financial Officer
MORTGAGEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not in its
individual capacity but solely as
Collateral Agent for Lenders
By: ____________________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
________________________________________
WILLIAM J. WADE, not in his
individual capacity but solely
as Collateral Agent for Lenders
5
<PAGE>
SCHEDULE "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
EXHIBIT "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:______________________
MRT No._____________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
FIRST AMENDMENT TO ASSIGNMENT
OF MORTGAGE AND OTHER RECORDED DOCUMENTS
----------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS FIRST AMENDMENT TO ASSIGNMENT OF MORTGAGE AND OTHER RECORDED
DOCUMENTS (this "FIRST AMENDMENT") is made as of September 29, 1995 by and
between MORTGAGE AND REALTY TRUST (alternatively referred to herein as either
"MRT" or "ASSIGNOR"), a Maryland real estate investment trust, having an office
at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania 19117, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM J. WADE,
acting not in their individual capacities but solely as Collateral Agents for
Lenders under and pursuant to the Collateral Agreement (hereinafter defined)
(Wilmington Trust Company and William J. Wade, together "ASSIGNEE"), whose
mailing address and address from which information concerning its security
interest may be obtained is MRT Collateral Agent, c/o William J. Wade, Esq.,
Richards, Layton & Finger, One Rodney Square, P.O. Box 551, Wilmington, Delaware
19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H :
WHEREAS, MRT entered into that certain Joint Plan of Reorganization
dated as of November 19, 1990, and confirmed on February 27, 1991, by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT");
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the
<PAGE>
Creditor Obligations under the 1990 Plan, and amend or add certain other
covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Assignee and
Lenders, amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), (ii) MRT and Assignee entered into that certain
Indenture, dated as of July 15, 1992 (the "1992 INDENTURE");
WHEREAS, in accordance with the 1992 Collateral Agreement and the 1992
Indenture, MRT delivered to Assignee that certain Assignment of Mortgage and
Other Recorded Documents (the "ASSIGNMENT"), more particularly described on the
attached SCHEDULE "I", pursuant to which Assignment Assignor assigned to
Assignee a mortgage and certain other documents encumbering and affecting
certain real property more particularly described on the attached EXHIBIT "A";
WHEREAS, in accordance with that certain Plan of Reorganization
Proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Assignee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Assignee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Assignment to reflect
the amendments and modifications set forth in the 1995 Plan, the Indenture and
the 1995 Amended Collateral Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the
2
<PAGE>
parties hereto hereby agree that the Assignment is amended as follows:
1. REFERENCES. All references in the Assignment to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the
Assignment to the "Plan" are hereby deemed to refer to the 1995 Plan. In each
instance where the Assignment is to be governed by, or is subject to, the terms
of the Plan or the Collateral Agreement, the Assignment shall also be governed
by, or be subject to, the terms of the Indenture. The Assignment is hereby
incorporated herein by this reference (subject to the modifications set forth in
this First Amendment), and Assignor hereby restates the grants, assignments and
conveyances made by Assignor in the Assignment as if set forth in their entirety
herein (and confirms that the Assignment assigned and conveyed to Assignee all
of the documents described in the Assignment, and all of Assignor's beneficial
and other rights and interests therein), it being the intent of the parties
hereto that the Assignment, as amended hereby, secures and shall continue to
secure the Liabilities of MRT (including, without limitation, repayment of the
Notes) under and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan
Amendment and as further modified by the 1995 Plan, (ii) the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement, and (iii) the
Assignment, as amended by this First Amendment.
2. RATIFICATION OF LIEN. Neither this First Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of) the
Assignment or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Assignment, and the Assignment and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Assignment, as
amended by this First Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this First Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This First Amendment has
been executed on behalf of Assignor by the Treasurer and Chief Financial Officer
in his capacity as an officer of Assignor. As provided in section 7.2 of the
declaration of trust of Assignor, no trustee, officer, agent or shareholder of
Assignor shall be bound or held to any personal liability in connection with the
obligations of Assignor arising out of the execution of this First Amendment.
The execution of
3
<PAGE>
this First Amendment by the said individual shall not bind the said individual
and he shall not be held to any personal liability in connection with the
obligations under this First Amendment as a result of such execution.
4. COUNTERPARTS. This First Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL ASSIGNMENT. Except as amended hereby,
the original Assignment is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
ASSIGNOR:
MORTGAGE AND REALTY TRUST, a
Maryland real estate investment trust
By:__________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief
Financial Officer
ASSIGNEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not
in its individual capacity but
solely as Collateral Agent for
Lenders
By:___________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
______________________________
WILLIAM J. WADE, not in his
individual capacity but solely as
Collateral Agent for Lenders
5
<PAGE>
SCHEDULE "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
EXHIBIT "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:_______________________
MRT No.______________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
FIRST AMENDMENT TO ASSIGNMENT
OF DEED OF TRUST AND OTHER RECORDED DOCUMENTS
---------------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS FIRST AMENDMENT TO ASSIGNMENT OF DEED OF TRUST AND OTHER
RECORDED DOCUMENTS (this "FIRST AMENDMENT") is made as of September 29, 1995 by
and between MORTGAGE AND REALTY TRUST (alternatively referred to herein as
either "MRT" or "ASSIGNOR"), a Maryland real estate investment trust, having an
office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania 19117, and
WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM J. WADE,
acting not in their individual capacities but solely as Collateral Agents for
Lenders under and pursuant to the Collateral Agreement (hereinafter defined)
(Wilmington Trust Company and William J. Wade, together "ASSIGNEE"), whose
mailing address and address from which information concerning its security
interest may be obtained is MRT Collateral Agent, c/o William J. Wade, Esq.,
Richards, Layton & Finger, One Rodney Square, P.O. Box 551, Wilmington, Delaware
19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H :
WHEREAS, MRT entered into that certain Joint Plan of Reorganization of
MRT dated November 19, 1990, and confirmed on February 27, 1991, by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT");
<PAGE>
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Assignee and
Lenders, amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), (ii) MRT and Assignee entered into that certain
Indenture, dated as of July 15, 1992 (the "1992 INDENTURE");
WHEREAS, in accordance with the 1992 Collateral Agreement and the 1992
Indenture, MRT delivered to Assignee that certain Assignment of Deed of Trust
and Other Recorded Documents (the "ASSIGNMENT"), more particularly described on
the attached SCHEDULE "I", pursuant to which Assignment Assignor assigned to
Assignee a mortgage and certain other documents encumbering and affecting
certain real property more particularly described on the attached EXHIBIT "A";
WHEREAS, in accordance with that certain Plan of Reorganization
Proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Assignee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Assignee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Assignment to reflect
the amendments and modifications set forth in the 1995 Plan, the Indenture and
the 1995 Amended Collateral Agreement.
2
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Assignment is amended as follows:
1. REFERENCES. All references in the Assignment to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the
Assignment to the "Plan" are hereby deemed to refer to the 1995 Plan. In each
instance where the Assignment is to be governed by, or is subject to, the terms
of the Plan or the Collateral Agreement, the Assignment shall also be governed
by, or be subject to, the terms of the Indenture. The Assignment is hereby
incorporated herein by this reference (subject to the modifications set forth in
this First Amendment), and Assignor hereby restates the grants, assignments and
conveyances made by Assignor in the Assignment as if set forth in their entirety
herein (and confirms that the Assignment assigned and conveyed to Assignee all
of the documents described in the Assignment, and all of Assignor's beneficial
and other rights and interests therein), it being the intent of the parties
hereto that the Assignment, as amended hereby, secures and shall continue to
secure the Liabilities of MRT (including, without limitation, repayment of the
Notes) under and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan
Amendment and as further modified by the 1995 Plan, (ii) the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement and as
amended and restated by the 1995 Amended Collateral Agreement, and (iii) the
Assignment, as amended by this First Amendment.
2. RATIFICATION OF LIEN. Neither this First Amendment, the 1995
Plan, the Indenture, the reissuance of the Notes in replacement form nor the
1995 Amended Collateral Agreement extinguishes, terminates or acts as a novation
of (or will be deemed to extinguish, terminate or act as a novation of) the
Assignment or the lien created thereby, or otherwise adversely affects or
otherwise impairs the lien created by the Assignment, and the Assignment and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Assignment, as
amended by this First Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this First Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This First Amendment has
been executed on behalf of Assignor by the Treasurer and Chief Financial Officer
in his capacity as an officer of Assignor. As provided in section 7.2 of the
declaration of trust of Assignor, no trustee, officer, agent or shareholder of
Assignor shall be bound or held to any personal
3
<PAGE>
liability in connection with the obligations of Assignor arising out of the
execution of this First Amendment. The execution of this First Amendment by the
said individual shall not bind the said individual and he shall not be held to
any personal liability in connection with the obligations under this First
Amendment as a result of such execution.
4. COUNTERPARTS. This First Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL ASSIGNMENT. Except as amended hereby,
the original Assignment is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
ASSIGNOR:
MORTGAGE AND REALTY TRUST, a
Maryland real estate investment
trust
By:__________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief
Financial Officer
ASSIGNEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not
in its individual capacity but
solely as Collateral Agent for
Lenders
By:___________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
______________________________
WILLIAM J. WADE, not in his
individual capacity but solely as
Collateral Agent for Lenders
5
<PAGE>
SCHEDULE "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
EXHIBIT "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:_______________________
MRT No.______________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
FIRST AMENDMENT TO
DEED OF TRUST, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
-------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS FIRST AMENDMENT TO DEED OF TRUST, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "FIRST AMENDMENT") is made as of September
29, 1995, by and between MORTGAGE AND REALTY TRUST (alternatively referred to
herein as either "MRT" or "TRUSTOR"), a Maryland real estate investment trust,
having an office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania
19117, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM
J. WADE, acting not in their individual capacities but solely as Collateral
Agents for Lenders under and pursuant to the Collateral Agreement (hereinafter
defined) (Wilmington Trust Company and William J. Wade, together,
"BENEFICIARY"), whose mailing address and address from which information
concerning its security interest may be obtained is MRT Collateral Agent, c/o
William J. Wade, Esq., Richards, Layton & Finger, One Rodney Square, P. O. Box
551, Wilmington, Delaware 19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H:
WHEREAS, MRT entered into that certain Joint Plan of Reorganization of
MRT dated November 19, 1990, and confirmed on February 27, 1991 by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT");
<PAGE>
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Beneficiary and
Lenders amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), and (ii) MRT and Beneficiary entered into that certain
Indenture dated as of July 15, 1992 (the "1992 INDENTURE");
WHEREAS, in accordance with the 1992 Collateral Agreement and the 1992
Indenture, MRT delivered to Beneficiary that certain Deed of Trust, Assignment
of Rents, Security Agreement and Fixture Filing (the "DEED OF TRUST"), more
particularly described on the attached SCHEDULE "I", which Deed of Trust
encumbers certain real property more particularly described on the attached
EXHIBIT "A";
WHEREAS, in accordance with that certain Plan of Reorganization
Proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Beneficiary and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Beneficiary entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Deed of Trust to
reflect the amendments and modifications set forth in the 1995 Plan, the
Indenture and the 1995 Amended Collateral Agreement.
2
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Deed of Trust is amended as follows:
1. REFERENCES. All references in the Deed of Trust to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the Deed of
Trust to the "Plan" are hereby deemed to refer to the 1995 Plan. In each
instance where the Deed of Trust is to be governed by, or is subject to, the
terms of the Plan or the Collateral Agreement, the Deed of Trust shall also be
governed by, or be subject to, the terms of the Indenture. The Deed of Trust is
hereby incorporated herein by this reference (subject to the modifications set
forth in this First Amendment), and Trustor hereby restates the grants,
conveyances and assignments made by Trustor in the Deed of Trust as if set forth
in their entirety herein, it being the intent of the parties hereto that the
Deed of Trust, as amended hereby, secures and shall continue to secure the
Liabilities of MRT (including, without limitation, repayment of the Notes) under
and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan Amendment and as
further modified by the 1995 Plan, (ii) the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement, and (iii) the Deed of Trust,
as amended by this First Amendment.
2. RATIFICATION OF LIEN. Neither this First Amendment, the 1995 Plan,
the Indenture, the reissuance of the Notes in replacement form nor the 1995
Amended Collateral Agreement extinguishes, terminates or acts as a novation of
(or will be deemed to extinguish, terminate or act as a novation of) the Deed of
Trust or the lien created thereby, or otherwise adversely affects or otherwise
impairs the lien created by the Deed of Trust, and the Deed of Trust and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Deed of Trust, as
amended by this First Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this First Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This First Amendment has been
executed on behalf of Trustor by the Treasurer and Chief Financial Officer in
his capacity as an officer of Trustor. As provided in section 7.2 of the
declaration of trust of Trustor, no trustee, officer, agent or shareholder of
Trustor shall be bound or held to any personal liability in connection with the
obligations of Trustor arising out of the execution of this First Amendment.
The execution of this First Amendment by the said individual shall not bind the
said individual and he
3
<PAGE>
shall not be held to any personal liability in connection with the obligations
under this First Amendment as a result of such execution.
4. COUNTERPARTS. This First Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL DEED OF TRUST. Except as amended hereby, the
original Deed of Trust is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
TRUSTOR:
MORTGAGE AND REALTY TRUST,
a Maryland real estate investment trust
By:____________________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief Financial Officer
BENEFICIARY:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not in its
individual capacity but solely as
Collateral Agent for Lenders
By:____________________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
_______________________________________
WILLIAM J. WADE, not in his
individual capacity but solely
as Collateral Agent for Lenders
5
<PAGE>
SCHEDULE "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
I-1
<PAGE>
EXHIBIT "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
STATE:_______________________
MRT No.______________________
Prepared By
and When Recorded Return to:
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
FIRST AMENDMENT TO
MORTGAGE, ASSIGNMENT OF RENTS,
SECURITY AGREEMENT AND FIXTURE FILING
-------------------------------------
NOTE: Pursuant to Section 1146(c) of the United States Bankruptcy
Code, the filing and recording of this instrument shall not be subject to any
stamp, real estate transfer, mortgage, recording or other similar tax.
THIS FIRST AMENDMENT TO MORTGAGE, ASSIGNMENT OF RENTS, SECURITY
AGREEMENT AND FIXTURE FILING (this "FIRST AMENDMENT") is made as of September
29, 1995, by and between MORTGAGE AND REALTY TRUST (alternatively referred to
herein as either "MRT" or "MORTGAGOR"), a Maryland real estate investment trust,
having an office at 8380 Old York Road, Suite 300, Elkins Park, Pennsylvania
19117, and WILMINGTON TRUST COMPANY, a Delaware banking corporation, and WILLIAM
J. WADE, acting not in their individual capacities but solely as Collateral
Agents for Lenders under and pursuant to the Collateral Agreement (hereinafter
defined) (Wilmington Trust Company and William J. Wade, together,
"MORTGAGEE"), whose mailing address and address from which information
concerning its security interest may be obtained is MRT Collateral Agent, c/o
William J. Wade, Esq., Richards, Layton & Finger, One Rodney Square, P. O. Box
551, Wilmington, Delaware 19899.
Unless otherwise defined herein, capitalized terms shall have the
meanings ascribed thereto in the Collateral Agreement or, if not otherwise
defined therein, the Indenture.
W I T N E S S E T H:
WHEREAS, MRT entered into that certain Joint Plan of Reorganization of
MRT dated November 19, 1990, and confirmed on February 27, 1991 by the United
States Bankruptcy Court for the Central District of California (as heretofore
amended, the "1990 PLAN"), and that certain Collateral and Security Agreement
dated as of February 21, 1991 (the "ORIGINAL COLLATERAL AGREEMENT");
<PAGE>
WHEREAS, MRT entered into Amendment No. 2 to Plan of Reorganization
(the "1992 PLAN AMENDMENT") dated as of July 15, 1992, pursuant to which MRT
amended the 1990 Plan to, among other things, alter certain payment provisions
with respect to the Creditor Obligations under the 1990 Plan, and amend or add
certain other covenants and provisions of the 1990 Plan;
WHEREAS, pursuant to the 1992 Plan Amendment, (i) MRT, Mortgagee and
Lenders amended the Original Collateral Agreement by that certain First
Amendment to Collateral and Security Agreement (the "1992 AMENDMENT TO
COLLATERAL AGREEMENT") dated as of July 15, 1992 (the Original Collateral
Agreement, as amended by the 1992 Amendment to Collateral Agreement, the "1992
COLLATERAL AGREEMENT"), and (ii) MRT and Mortgagee entered into that certain
Indenture dated as of July 15, 1992 (the "1992 INDENTURE");
WHEREAS, in accordance with the 1992 Collateral Agreement and the 1992
Indenture, MRT delivered to Mortgagee that certain Mortgage, Assignment
of Rents, Security Agreement and Fixture Filing (the "MORTGAGE"), more
particularly described on the attached SCHEDULE "I", which Mortgage
encumbers certain real property more particularly described on the attached
EXHIBIT "A";
WHEREAS, in accordance with that certain Plan of Reorganization
Proposed by Mortgage and Realty Trust (dated July 12, 1995), and confirmed on
September 22, 1995 by the United States Bankruptcy Court for the Central
District of California pursuant to the Order (1) Approving Disclosure Statement
and Prepetition Solicitation; and (2) Confirming the Plan of Reorganization
Proposed by Mortgage and Realty Trust (as confirmed, the "1995 PLAN"), MRT
modified the term and reduced the principal amount of indebtedness due to
Holders and, to evidence such reduced principal amount, issued replacement Notes
in the aggregate principal amount of $110,000,000 (the "NOTES");
WHEREAS, pursuant to the 1995 Plan, (i) MRT, Mortgagee and Holders
modified the 1992 Collateral Agreement by that certain Amended and Restated
Collateral and Security Agreement (the "1995 AMENDED COLLATERAL AGREEMENT")
dated as of September 29, 1995 (the 1992 Collateral Agreement, as amended by the
1995 Amended Collateral Agreement, the "COLLATERAL AGREEMENT"), and (ii) MRT and
Mortgagee entered into that certain Amended and Restated Indenture dated as of
September 29, 1995 (the "INDENTURE"), which Indenture supersedes and replaces in
its entirety the 1992 Indenture; and
WHEREAS, the parties hereto desire to amend the Mortgage to
reflect the amendments and modifications set forth in the 1995 Plan, the
Indenture and the 1995 Amended Collateral Agreement.
2
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto hereby agree
that the Mortgage is amended as follows:
1. REFERENCES. All references in the Mortgage to the "Collateral
Agreement" are hereby deemed to refer to the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement; all references in the
Mortgage Trust to the "Plan" are hereby deemed to refer to the 1995 Plan. In
each instance where the Mortgage is to be governed by, or is subject to, the
terms of the Plan or the Collateral Agreement, the Mortgage shall also be
governed by, or be subject to, the terms of the Indenture. The Mortgage is
hereby incorporated herein by this reference (subject to the modifications set
forth in this First Amendment), and Mortgagor hereby restates the grants,
mortgages and warrants made by Mortgagor in the Mortgage as if set forth
in their entirety herein, it being the intent of the parties hereto that the
Mortgage, as amended hereby, secures and shall continue to secure the
Liabilities of MRT (including, without limitation, repayment of the Notes) under
and pursuant to (i) the 1990 Plan, as amended by the 1992 Plan Amendment and as
further modified by the 1995 Plan, (ii) the Original Collateral Agreement, as
amended by the 1992 Amendment to Collateral Agreement and as amended and
restated by the 1995 Amended Collateral Agreement, and (iii) the Mortgage,
as amended by this First Amendment.
2. RATIFICATION OF LIEN. Neither this First Amendment, the 1995 Plan,
the Indenture, the reissuance of the Notes in replacement form nor the 1995
Amended Collateral Agreement extinguishes, terminates or acts as a novation of
(or will be deemed to extinguish, terminate or act as a novation of) the Deed of
Trust or the lien created thereby, or otherwise adversely affects or otherwise
impairs the lien created by the Mortgage, and the Mortgage and the
lien created thereby is hereby ratified and confirmed and remains validly
existing and in full force and effect. For purposes of the Mortgage, as
amended by this First Amendment, the term "Liabilities" shall not impose on MRT
any greater indebtedness, liability or obligation than as such term was defined
prior to the date of this First Amendment.
3. NO IMPOSITION OF PERSONAL LIABILITY. This First Amendment has been
executed on behalf of Mortgagor by the Treasurer and Chief Financial Officer in
his capacity as an officer of Mortgagor. As provided in section 7.2 of the
declaration of trust of Mortgagor, no trustee, officer, agent or shareholder of
Mortgagor shall be bound or held to any personal liability in connection with
the obligations of Mortgagor arising out of the execution of this First
Amendment. The execution of this First Amendment by the said individual shall
not bind the said individual and he shall not be held to any personal
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liability in connection with the obligations under this First Amendment as a
result of such execution.
4. COUNTERPARTS. This First Amendment 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 the same agreement.
5. RATIFICATION OF ORIGINAL MORTGAGE. Except as amended hereby, the
original Mortgage is ratified and confirmed in all respects.
[SIGNATURES ON NEXT PAGE]
4
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IN WITNESS WHEREOF, the parties hereto have caused this First
Amendment to be executed by their respective duly authorized officers or other
representatives as of the day and year first above written.
MORTGAGOR:
MORTGAGE AND REALTY TRUST,
a Maryland real estate investment trust
By:____________________________________
Name: Daniel F. Hennessey
Title: Treasurer and Chief Financial Officer
MORTGAGEE:
WILMINGTON TRUST COMPANY, a
Delaware banking corporation, not in its
individual capacity but solely as
Collateral Agent for Lenders
By:____________________________________
Name: Mary C. St. Amand
Title: Assistant Vice President
_______________________________________
WILLIAM J. WADE, not in his
individual capacity but solely
as Collateral Agent for Lenders
5
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SCHEDULE "I"
------------
Description of Security Document
PROPERTY NO: _____
COUNTY AND STATE: _____
Schedule I-1
<PAGE>
EXHIBIT "A"
-----------
Description of the Real Estate
PROPERTY NO:______
COUNTY AND STATE: ______
A-1
<PAGE>
[attach acknowledgments]
<PAGE>
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
WILLIAM J. WADE
as Collateral Agent
Dated as of September 29, 1995
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<C> <S> <C>
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
</TABLE>
i
<PAGE>
<TABLE>
<C> <S> <C>
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
</TABLE>
ii
<PAGE>
<TABLE>
<C> <S> <C>
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
</TABLE>
iii
<PAGE>
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 William J. Wade ("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:
<PAGE>
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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<PAGE>
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
3
<PAGE>
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;
4
<PAGE>
(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;
5
<PAGE>
(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
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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
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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 mark 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
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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.
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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
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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.
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(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
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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
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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
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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
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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
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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.
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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
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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;
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(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.
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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.
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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
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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
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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
<PAGE>
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
<PAGE>
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/ Mary St. Amand
--------------------------
Title: Vice President
WILLIAM J. WADE, as Individual
Collateral Agent
/s/ William J. Wade
-------------------------
William J. Wade
MORTGAGE AND REALTY TRUST
By: /s/ Daniel F. Hennessey
--------------------------
Title: C.F.O.
MRT WEST, INC.
By: /s/ Daniel F. Hennessey
--------------------------
Title: Vice President
32
<PAGE>
MRT CREEKSIDE, INC.
By: /s/ Daniel F. Hennessey
--------------------------
Title: Vice President
MRT NEWARK, INC.
By: /s/ Daniel F. Hennessey
--------------------------
Title: Vice President
MRT SANTA MONICA, INC.
By: /s/ Daniel F. Hennessey
--------------------------
Title: Vice President
150 RITTENHOUSE CIRCLE, INC.
By: /s/ Daniel F. Hennessey
--------------------------
Title: Treasurer
MUTUAL SERIES FUND, INC.
By: /s/ Jeffrey Altman
--------------------------
Title: Vice President
33
<PAGE>
INTERMARKET CORP.
By: /s/ Ian R. Mackinzie
--------------------------
Title: Managing Director
ANGELO, GORDON & CO.
By: /s/ Michael L. Gordon
--------------------------
Title: Authorized Signatory
EMERALD PARTNERS
By: /s/ Meryl Buchanan
--------------------------
Title: Vice President
STROME-SUSSKIND INVESTMENT
MANAGEMENT, L.P.
By: No Signature
--------------------------
Title:
34
<PAGE>
September 29,1995
Wilmington Trust Company
Rodney Square North
1100 North Market Street
Wilmington, Delaware 19890-001
William J. Wade, Esq.
Richards, Layton & Finger
One Rodney Square
920 King Street
Wilmington, Delaware 19801
Re: INDEMNIFICATION LETTER AGREEMENT
Dear Ladies and Gentlemen:
For and in consideration of your agreement to serve as the collateral
agents under the Amended and Restated Collateral and Security Agreement, dated
as of September 29, 1995 (the "Security Agreement"), and other Collateral
Documents, the undersigned, Mortgage and Realty Trust, a Maryland real estate
investment trust (the "Company"), does hereby agree to indemnify and hold
harmless Wilmington Trust Company, as corporate collateral agent, and William J.
Wade, as individual collateral agent (collectively, the Collateral Agents)
against any and all losses, liabilities or expenses incurred by either of them
arising out of or in connection with the acceptance or administration of their
duties under the Security Agreement or the other Collateral Documents without
gross negligence or bad faith on his or its part, including, but not limited to,
all losses, liabilities or expenses arising in connection with the Release or
presence of any Hazardous Substance at or from the Real Estate whether
foreseeable or unforeseeable, regardless of the source of such Release or when
such Release occurred or such presence is discovered. The foregoing indemnity
includes,
<PAGE>
September 29, 1995
Page 2
without limitation, all costs of removal, Remedial Action, remediation of any
kind, and disposal of such Hazardous Substances (whether or not such Hazardous
Substances may be legally allowed to remain in the Real Estate if removal or
remediation is prudent), after a Foreclosure Action, the cost of determining
whether the Real Estate that was the subject of the Foreclosure Action is in
compliance and causing such Real Estate to be in compliance with all applicable
Environmental Laws, and the Collateral Agents' reasonable attorneys' and
consultants' fees and court costs related thereto. The Collateral Agents shall
notify the Company promptly of any claim for which he or it may seek indemnity.
Failure by the Collateral Agents to so notify the Company shall not relieve the
Company of its obligations hereunder. The Company shall defend the claim and
the Collateral Agents shall cooperate in the defense. The Collateral Agents may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent, which consent shall not be unreasonably withheld. The obligations of
the Company under this Indemnification Letter Agreement shall survive the
satisfaction and discharge of the Security Agreement.
Capitalized items used herein without specific definition shall have
the respective meanings set forth in the Security Agreement. This
Indemnification Letter Agreement shall be governed by, and construed and
interpreted in accordance with, the applicable law and jurisdiction set forth in
Section 9.05 of the Security Agreement.
In witness whereof, the undersigned has executed this Indemnification
Letter Agreement as of September 29, 1995
Mortgage and Realty Trust
/s/ Daniel F. Hennessey
--------------------------
By: Daniel F. Hennessey
Its: Treasurer and C.F.O.
<PAGE>
WAIVER LETTER
September 29, 1995
Mortgage and Realty Trust
8380 Old York Road, Suite 300
Elkins Park, Pennsylvania 19117-1590
Attention: Board of Trustees
Dear Sirs:
This Waiver Letter is entered into in connection with the certain
Amended and Restated Collateral and Security Agreement dated as of September 29,
1995 (the "Collateral Agreement") by and among Mortgage and Realty Trust
("MRT"), the subsidiaries of MRT listed on the signature pages thereof, the
lenders listed on the signature pages thereof (the "Holders"), Wilmington Trust
Company, as Corporate Collateral Agent (the "Corporate Collateral Agent"), and
William J. Wade, as Individual Collateral Agent (the "Individual Collateral
Agent" and, together with the Corporate Collateral Agent, the "Collateral
Agent"). In connection with the proposed change of name of MRT to "Value
Property Trust", the undersigned Corporate Collateral Agent, Individual
Collateral Agent and Holders hereby waive compliance with the requirement set
forth in Section 3.04 of the Collateral Agreement that MRT (i) give the
Collateral Agent at least 30 days' prior written notice of such change of name
and (ii) take all action simultaneously with or in advance of such change of
name as necessary to amend financing statements or continuation statements so
that they are not seriously misleading as a result of such change of name;
PROVIDED, that MRT shall, prior to the expiration of the four month period
immediately following the date on which such change of name has become
effective, amend all such financing statements or continuation statements in
such a manner as is necessary to cause the security interest of the Collateral
Agent in the Collateral to continue to be perfected.
The agreements and waivers set forth herein shall become effective
upon the execution of a counterpart of this Waiver Letter by each of the parties
hereto. The
<PAGE>
agreements and waivers set forth herein shall be limited precisely as written
and nothing in this Waiver Letter shall be deemed to waive any other term,
provision or condition of the Collateral Agreement or prejudice any right or
remedy that the Holders or Collateral Agent may now have or may in the future
have under or in connection with the Collateral Agreement.
This Waiver Letter may be executed in any number of counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original, but all such
counterparts together shall constitute but one and the same instrument.
Very truly yours,
WILMINGTON TRUST COMPANY,
as Corporate Collateral Agent
By: /s/ Mary St. Amand
-----------------------------------
Title: Vice President
WILLIAM J. WADE,
as Individual Collateral Agent
By: /s/ William J. Wade
-----------------------------------
Title: Individual Collateral Agent
MUTUAL SERIES FUND, INC.
By: /s/ Jeffrey Altman
-----------------------------------
Title: Vice President
INTERMARKET CORPORATION
By: /s/ Ian R. Mackinzie
-----------------------------------
Title: Managing Director
- 2 -
<PAGE>
ANGELO, GORDON & CO.
By: /s/ Michael Gordon
-----------------------------------
Title: Authorized Signatory
EMERALD PARTNERS
By: /s/ Meryl Buchanan
-----------------------------------
Title: Vice President
STROME-SUSSKIND INVESTMENT
MANAGEMENT, L.P.
By: /s/ Jeffrey Susskind
-----------------------------------
Title: Vice President
Acknowledged and Agreed to
this 29th of September, 1995
MORTGAGE AND REALTY TRUST
By: /s/ Daniel F. Hennessey
--------------------------
Title: C.F.O.
- 3 -
<PAGE>
Exhibit 4.5
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of September 29, 1995, made by MORTGAGE AND
REALTY TRUST, a real estate investment trust formed under the laws of Maryland
(the "Issuer"), in favor of WILMINGTON TRUST COMPANY, as collateral agent for
the trustee and the holders under the Amended and Restated Indenture referred to
below (in such capacity, the "Collateral Agent").
W I T N E S S E T H:
--------------------
WHEREAS, the Issuer has entered into the Amended and Restated
Indenture, dated as of September 29, 1995, with Wilmington Trust Company, as
trustee (said Amended and Restated Indenture, as it may be amended or otherwise
modified from time to time, being the "Indenture" and capitalized terms not
defined herein but defined therein being used herein as therein defined); and
WHEREAS, the Issuer is the legal and beneficial owner of the shares of
capital stock described in Schedule I hereto and issued by the issuers named
therein (the "Pledged Shares"); and
WHEREAS, it is a condition precedent under the Plan of Reorganization
in the Chapter 11 case of the Issuer that the Issuer shall have made the pledge
contemplated by this Agreement;
NOW, THEREFORE, in consideration of the premises contained herein and
for other good and valuable consideration receipt of which is hereby
acknowledged, the Issuer hereby agrees with the Collateral Agent on behalf and
for the benefit of the Holders as follows:
SECTION 1. PLEDGE. The Issuer hereby pledges to the Collateral Agent
on behalf and for the benefit of the Holders, and grants to the Collateral Agent
on behalf and for the benefit of the Holders a security interest in, the
following (the "Pledged Collateral"):
(i) all of the Pledged Shares;
(ii) all additional shares of stock or other securities of any
issuer of the Pledged Shares from time to time acquired by the Issuer
in any manner and all shares of stock or other securities of any
Person who, after the date of this Agreement, becomes, as a result of
any occurrence,
<PAGE>
a corporate Subsidiary of the Issuer (any such shares being
"Additional Shares");
(iii) the certificates representing the shares referred to in
clauses (i) and (ii) above; and
(iv) all dividends, cash, instruments and other property or
proceeds, from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all of the
foregoing.
SECTION 2. SECURITY FOR OBLIGATIONS. This Agreement secures and the
Pledged Collateral is security for the full and prompt payment when due (whether
at stated maturity, by acceleration or otherwise) of, and the performance of,
the Obligations of the Issuer under the Indenture and the Notes, whether now or
hereafter existing and whether for principal, interest, fees, expenses or
otherwise (the "Secured Obligations").
SECTION 3. DELIVERY OF PLEDGED COLLATERAL. All certificates or
instruments representing or evidencing the Pledged Collateral shall be delivered
to and held by or on behalf of the Collateral Agent pursuant hereto and shall be
in suitable form for transfer by delivery, or shall be accompanied by duly
executed instruments of transfer or assignment in blank, all in form and
substance satisfactory to the Collateral Agent. The Collateral Agent shall have
the right, at any time in its discretion and without notice to the Issuer, to
transfer to or to register in its name or in the name of any of its nominees any
or all of the Pledged Collateral. In addition, the Collateral Agent shall have
the right at any time to exchange certificates or instruments representing or
evidencing any of the Pledged Collateral for certificates or instruments of
smaller or larger denominations.
SECTION 4. REPRESENTATIONS AND WARRANTIES. The Issuer makes the
following representations:
(a) The Pledged Shares (i) have been duly authorized and validly
issued; (ii) are fully paid and non-assessable; and (iii) constitute 100% of the
issued and outstanding shares of stock of the respective issuers thereof.
(b) The Issuer is the legal and beneficial owner of the Pledged
Collateral free and clear of any Lien, except for the Lien created by this
Agreement and the other Collateral Documents.
2
<PAGE>
(c) The pledge and delivery of the Pledged Shares pursuant to this
Agreement (and the filing of Uniform Commercial Code ("UCC") financing
statements with respect to the Pledged Shares) will create a valid and perfected
security interest in the Pledged Collateral, in favor of the Collateral Agent on
behalf and for the benefit of the Holders securing the payment of all of the
Obligations of the Issuer under the Indenture and the Notes.
(d) No consent, authorization, approval, or other action by, and no
notice to or filing with, any Governmental Authority is required for the pledge
by the Issuer of the Pledged Collateral pursuant to this Agreement or for the
due execution, delivery or performance of this Agreement by the Issuer, except
for the filing of UCC financing statements with respect to the Pledged
Collateral.
(e) The issuers listed on Schedule I are the only corporate
Subsidiaries of the Issuer.
SECTION 5. FURTHER ASSURANCES, ETC. (a) The Issuer agrees that at
any time and from time to time, at the cost and expense of the Issuer, the
Issuer will promptly execute and deliver all further instruments and documents,
and take all further action, that may be necessary, or that the Collateral Agent
may reasonably request, in order to perfect and protect the Lien granted or
purported to be granted hereby or to enable the Collateral Agent to exercise and
enforce its rights and remedies hereunder with respect to any Pledged
Collateral.
(b) The Issuer agrees to defend the title to the Pledged Collateral
and the Lien thereon of the Collateral Agent against the claim of any other
Person and to maintain and preserve such Lien until indefeasible payment in full
of all of the Obligations of the Issuer under the Indenture and the Notes.
SECTION 6. VOTING RIGHTS; DIVIDENDS; ETC.
(a) As long as no Default or Event of Default shall have occurred and
be continuing (or, in the case of subsection (a)(i) of this Section 6, as long
as no notice thereof shall have been given by the Collateral Agent to the
Issuer):
(i) The Issuer shall be entitled to exercise any and all voting
and other consensual rights pertaining to the Pledged Collateral or
any part thereof for any purpose not inconsistent with the terms of
this Agreement, any other Collateral Document or the Indenture.
3
<PAGE>
(ii) The Issuer shall be entitled to receive and retain any and
all dividends in respect of the Pledged Collateral, other than any and
all
(A) dividends paid or payable other than in cash in respect
of, and instruments and other property received, receivable or
otherwise distributed in respect of, or in exchange for, any
Pledged Collateral,
(B) dividends and other distributions paid or payable in
cash in respect of any Pledged Shares or Additional Pledged
Shares in connection with a partial or total liquidation or
dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus, and
(C) cash paid, payable or otherwise distributed in
redemption of, or in exchange for, any Pledged Collateral,
all of which shall be forthwith delivered to the Collateral Agent to
hold as Pledged Collateral and shall, if received by the Issuer, be
received in trust for the benefit of the Collateral Agent, be
segregated from the other property or funds of the Issuer, and be
forthwith delivered to the Collateral Agent as Pledged Collateral in
the same form as so received (with any necessary indorsement).
(iii) The Collateral Agent shall execute and deliver (or cause to
be executed and delivered) to the Issuer all such proxies and other
instruments as the Issuer may reasonably request for the purpose of
enabling the Issuer to exercise the voting and other rights which it
is entitled to exercise pursuant to paragraph (i) above and to receive
the dividends which it is authorized to receive and retain pursuant to
paragraph (ii) above.
(b) Upon the occurrence and during the continuance of a Default or an
Event of Default:
(i) Upon notice by the Collateral Agent to the Issuer, all
rights of the Issuer to exercise the voting and other consensual
rights which it would otherwise be entitled to exercise pursuant to
Section 6(a)(i) above shall cease, and all such rights shall thereupon
become vested in the Collateral Agent who shall thereupon have the
sole
4
<PAGE>
right to exercise such voting and other consensual rights.
(ii) All rights of the Issuer to receive the dividends which it
would otherwise be authorized to receive and retain pursuant to
Section 6(a)(ii) above shall cease, and all such rights shall
thereupon become vested in the Collateral Agent who shall thereupon
have the sole right to receive and hold as Pledged Collateral such
dividends.
(iii) All dividends which are received by the Issuer contrary to
the provisions of paragraph (ii) of this Section 6(b) shall be
received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of the Issuer and shall be forthwith paid
over to the Collateral Agent as Pledged Collateral in the same form as
so received (with any necessary indorsement).
(iv) The Issuer shall, if necessary to permit the Collateral
Agent to exercise the voting and other rights which it may be entitled
to exercise pursuant to Section 6(b)(i) above and to receive all
dividends and distributions which it may be entitled to receive under
Section 6(b)(ii) above, execute and deliver to the Collateral Agent,
from time to time and upon written notice of the Collateral Agent,
appropriate proxies, dividend payment orders and other instruments as
the Collateral Agent may reasonably request. The foregoing shall not
in any way limit the Collateral Agent's power and authority granted
pursuant to Section 8 hereof.
SECTION 7. TRANSFERS AND OTHER LIENS; ADDITIONAL SHARES. (a) The
Issuer agrees that it will not (i) sell or otherwise dispose of, or grant any
option or warrant with respect to, any of the Pledged Collateral, or (ii) create
or permit to exist any Lien upon or with respect to any of the Pledged
Collateral, except for the Lien created pursuant to this Agreement.
(b) The Issuer agrees that it will (i) cause each issuer of the
Pledged Shares not to issue any shares of stock or other securities in addition
to or in substitution for the Pledged Shares, except, with the written consent
of the Required Holders, to the Issuer, (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all Additional Shares,
and (iii) promptly (and in any event within three Business Days) deliver to the
Collateral Agent a Pledge Amendment, duly executed by the Issuer, in
substantially the form of Schedule II hereto (a
5
<PAGE>
"Pledge Amendment"), in respect of the Additional Shares, together with all
certificates or other instruments representing or evidencing the same. The
Issuer hereby (i) authorizes the Collateral Agent to attach each Pledge
Amendment to this Pledge Agreement, (ii) agrees that all Additional Shares
listed on any Pledge Amendment delivered to the Collateral Agent shall for all
purposes hereunder constitute Pledged Shares, and (iii) is deemed to have made,
upon such delivery, the representations and warranties contained in Section 4
hereof with respect to such Pledged Collateral.
SECTION 8. COLLATERAL AGENT APPOINTED ATTORNEY-IN-FACT AND PROXY.
The Issuer hereby irrevocably constitutes and appoints the Collateral Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact and proxy with full irrevocable power and authority in
the place and stead of the Issuer and in the name of the Issuer 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 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 advisable to accomplish the purposes of
this Agreement, including, without limitation, to receive, indorse and collect
all instruments made payable to the Issuer representing any dividend or other
distribution or payment in respect of the Pledged Collateral or any part
thereof, to give full discharge for the same, and to vote or grant any consent
in respect of the Pledged Shares authorized by Section 6(b) hereof. The Issuer
hereby ratifies, to the extent permitted by law, all that any said attorney
shall lawfully do or cause to be done by virtue hereof. This power, being
coupled with an interest, is irrevocable until the Secured Obligations are paid
in full.
SECTION 9. COLLATERAL AGENT MAY PERFORM. If the Issuer fails to
perform any agreement contained herein, the Collateral Agent may itself perform,
or cause performance of, such agreement, and the expenses of the Collateral
Agent incurred in connection therewith shall be payable by the Issuer under
Section 12 hereof and constitute Secured Obligations secured hereby.
SECTION 10. REASONABLE CARE. The Collateral Agent shall be deemed to
have exercised reasonable care in the custody and preservation of the Pledged
Collateral in its possession if the Pledged Collateral is accorded treatment
substantially equal to that which the Collateral Agent accords its own property,
it being understood that neither the Collateral Agent nor any Holder shall have
responsibility for (i) ascertaining or taking action with
6
<PAGE>
respect to calls, conversions, exchanges, maturities, tenders or other matters
relative to any Pledged Collateral, whether or not the Collateral Agent or any
Holder has or is deemed to have knowledge of any such matter, or (ii) taking
any necessary steps to preserve rights against any Person with respect to any
Pledged Collateral.
SECTION 11. REMEDIES UPON DEFAULT. If any Event of Default shall
have occurred and be continuing:
(a) The Collateral Agent may exercise in respect of the Pledged
Collateral, in addition to other rights and remedies provided for herein or
otherwise available to it, all the rights and remedies of a secured party after
default under the Uniform Commercial Code (the "Code") in effect in the State of
New York at that time, and the Collateral Agent may also, without notice except
as specified below, sell the Pledged Collateral or any part thereof in one or
more parcels at public or private sale, at any exchange, broker's board or at
any office of the Collateral Agent or elsewhere, for cash, on credit or for
future delivery, and upon such other terms as the Collateral Agent may deem
commercially reasonable. The Issuer agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Issuer of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not
be obligated to make any sale of Pledged Collateral regardless of notice of sale
having been given. The Collateral Agent may adjourn any public or private sale
from time to time by announcement at the time and place fixed therefor, and such
sale may, without further notice, be made at the time and place to which it was
so adjourned. The Issuer hereby waives any claims against the Collateral Agent
arising by reason of the fact that the price at which any Pledged Collateral may
have been sold at such a private sale was less than the price which might have
been obtained at a public sale, even if the Collateral Agent accepts the first
offer received and does not offer such Pledged Collateral to more than one
offeree.
(b) If the Collateral Agent shall determine to exercise its right to
sell all or any of the Pledged Collateral pursuant to this Section 11, the
Issuer agrees that, upon request of the Collateral Agent, the Issuer will, at
its own cost and expense:
(i) execute and deliver, and use its best efforts to cause each
issuer of the Pledged Shares and its directors and officers to execute
and deliver, all such instruments and documents, and do or cause to be
done all such other acts and things, as may be necessary or, in the
opinion of
7
<PAGE>
the Collateral Agent, necessary or advisable to register such
Pledged Shares under the provisions of the Securities Act of
1933, as from time to time amended (the "Securities Act"), and to
cause the registration statement relating thereto to become effective
and to remain effective for such period as prospectuses are required
by law to be furnished, and to make all amendments and supplements
thereto and to the related prospectus which, in the opinion of the
Collateral Agent, are necessary or advisable, all in conformity with
the requirements of the Securities Act and the rules and regulations
of the Securities and Exchange Commission ("SEC") applicable thereto;
(ii) use its best efforts to qualify the Pledged Collateral under
the state securities or "Blue Sky" laws and to obtain all necessary
governmental approvals for the sale of the Pledged Collateral, as
requested by the Collateral Agent;
(iii) make available to its security holders, as soon as
practicable, an earning statement which will satisfy the provisions of
section 11(a) of the Securities Act; and
(iv) do or cause to be done all such other acts and things as may
be necessary to make such sale of the Pledged Collateral or any part
thereof valid and binding and in compliance with applicable law.
The Issuer further acknowledges the impossibility of ascertaining the amount of
damages which would be suffered by the Collateral Agent or the Holders by reason
of the failure by the Issuer to perform any of the covenants contained in this
Section 11 and, consequently, agrees that, if the Issuer shall fail to perform
any of such covenants, it shall pay, as liquidated damages and not as a penalty,
an amount equal to the value of the Pledged Collateral on the date the
Collateral Agent shall demand compliance with this Section.
(c) The Issuer recognizes that, by reason of the aforementioned
requirements and certain prohibitions contained in the Securities Act and
applicable state securities laws, the Collateral Agent may, at its option, elect
not to require the Issuer to register all or any part of the Pledged Collateral
and may therefore be compelled, with respect to any sale of all or any part of
the Pledged Collateral, to limit purchasers to those who will agree, among other
things, to acquire such securities for their own account, for investment, and
not with a view to the distri-
8
<PAGE>
bution or resale thereof. The Issuer acknowledges and agrees that any such
sale may result in prices and other terms less favorable to the seller than if
such sale were a public sale without such restrictions and, notwithstanding
such circumstances, agrees that any such sale shall be deemed to have been made
in a commercially reasonable manner. The Collateral Agent shall be under no
obligation to delay the sale of any of the Pledged Collateral for the period
of time necessary to permit the Issuer to register such securities for public
sale under the Securities Act, or under applicable state securities laws,
even if the Issuer would agree to do so.
(d) If the Collateral Agent determines to exercise its right to sell
any or all of the Pledged Collateral, upon written request, the Issuer shall,
from time to time, furnish to the Collateral Agent all such information as the
Collateral Agent may request in order to determine the number of shares and
other instruments included in the Pledged Collateral which may be sold by the
Collateral Agent as exempt transactions under the Securities Act and rules of
the SEC thereunder, as the same are from time to time in effect.
(e) Any cash held by the Collateral Agent as Pledged Collateral and
all cash proceeds received by the Collateral Agent in respect of any sale of,
collection from, or other realization upon all or any part of the Pledged
Collateral shall be applied by the Collateral Agent in accordance with the
provisions of Section 6.10 of the Indenture.
SECTION 12. EXPENSES. The Issuer will upon demand pay to the
Collateral Agent the amount of any and all reasonable expenses, including,
without limitation, the reasonable fees and expenses of the Collateral Agent's
counsel and of any experts and agents, which the Collateral Agent may incur in
connection with (i) the administration of this Agreement, (ii) the custody or
preservation of, sale of, collection from, or other realization upon, any of the
Pledged Collateral, (iii) the exercise or enforcement of any of the rights and
remedies hereunder of the Collateral Agent and the Holders, or (iv) the failure
by the Issuer to perform or observe any of the provisions hereof.
SECTION 13. SECURITY INTEREST ABSOLUTE. All rights of the Collateral
Agent and security interests hereunder, and all obligations of the Issuer
hereunder, shall be absolute and unconditional irrespective of:
(i) any lack of validity or enforceability of any provision of
the Indenture, the Notes or
9
<PAGE>
any other Collateral Document or any other agreement or instrument
relating thereto;
(ii) any change in the time, manner or place of payment of, or in
any other term of, or any increase in the amount of, all or any of the
Secured Obligations, or any other amendment or waiver of any term of,
or any consent to any departure from any requirement of, the
Indenture, the Notes or any other Collateral Document;
(iii) any exchange, release or non-perfection of any Lien on any
other collateral, or any release or amendment or waiver of any term of
any guaranty of, or consent to departure from any requirement of any
guaranty of, all or any of the Secured Obligations; or
(iv) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, a borrower or a pledgor.
SECTION 14. AMENDMENTS, ETC. No amendment or waiver of any provision
of this Agreement nor consent to any departure by the Issuer herefrom 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 such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given.
SECTION 15. ADDRESSES FOR NOTICES. All notices and other
communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopy or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered by hand, if to the Issuer or the
Collateral Agent, addressed to the Issuer or the Collateral Agent, as the case
may be, at its address specified in the Indenture, or, as to each party, at such
other address as shall be designated by such party in a written notice to each
other party complying as to delivery with the terms of this Section. All such
notices and other communications shall, when mailed, telegraphed, telexed,
telecopied, cabled or delivered, be effective when deposited in the mails,
delivered to the telegraph company, confirmed by telex answerback, telecopied
with confirmation of receipt, delivered to the cable company or delivered by
hand to the addressee or its agent, respectively.
SECTION 16. CONTINUING SECURITY INTEREST; TRANSFER OF NOTES OR
OBLIGATIONS. This Pledge Agreement shall create a continuing security interest
in the Pledged Collateral and shall (i) remain in full force and effect until
10
<PAGE>
indefeasible payment in full of the Obligations of the Issuer under the
Indenture and the Notes, (ii) be binding upon the Issuer, its successors and
assigns, and (iii) inure, together with the rights and remedies of the
Collateral Agent hereunder, to the benefit of and be enforceable by the
Collateral Agent and the Holders and their respective successors, transferees
and assigns. Without limiting the generality of the foregoing clause (iii), any
Holder may assign or otherwise transfer any Note held by it or Obligation of the
Issuer under the Indenture and the Notes owing to it to any other Person, and
such other Person shall thereupon become vested with all the rights in respect
thereof granted to such Holder herein or otherwise with respect to such Note or
Obligations so transferred or assigned. Upon the payment in full of the
Obligations of the Issuer under the Indenture and the Notes, the Issuer shall be
entitled to the return, upon its request and at its expense, of such of the
Pledged Collateral as shall not have been sold or otherwise applied pursuant to
the terms hereof.
SECTION 17. GOVERNING LAW; SEVERABILITY; TERMS. This Agreement shall
be governed by, and be construed and interpreted in accordance with, the law of
the State of New York. Wherever possible, each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective only to the
extent of such prohibition or invalidity and without invalidating the remaining
provisions of this Agreement. Unless otherwise defined herein or in the
Indenture, terms defined in Article 9 of the Uniform Commercial Code as in
effect in the State of New York are used herein as therein defined.
SECTION 18. WAIVER OF JURY TRIAL. The Issuer waives any right it may
have to a trial by jury in respect of any litigation based on, or arising out
of, under or in connection with, this Agreement or any other loan document, or
any course of conduct, course of dealing, verbal or written statement or other
action of any loan party or any secured party.
SECTION 19. SECTION TITLES. The Section titles contained in this
Agreement are and shall be without substantive meaning or content of any kind
whatsoever and are not part of this Agreement.
11
<PAGE>
IN WITNESS WHEREOF, the Issuer has caused this Agreement to be duly
executed and delivered by its duly authorized officer on the date first above
written.
MORTGAGE AND REALTY TRUST
By: /s/ Daniel F. Hennessey
---------------------------
Title: C.F.O.
Accepted and acknowledged:
WILMINGTON TRUST COMPANY,
as Collateral Agent
By: /s/ Mary St. Amand
--------------------------
Title: Vice President
12
<PAGE>
SCHEDULE I
PLEDGE AGREEMENT
Attached to and forming a part of that certain Pledge Agreement, dated as
of September 29, 1995, made by Mortgage and Realty Trust in favor of Wilmington
Trust Company, as Collateral Agent.
<TABLE>
<CAPTION>
Number
Stock Issuer Class of Stock Stock Certificate No(s). Par Value of Shares
- ------------ -------------- ------------------------ --------- ---------
<S> <C> <C> <C> <C>
MRT West, Inc. Common 2 No Par 1000
MRT Creekside, Inc. Common 1 No Par 1000
MRT Newark, Inc. Common 1 No Par 1000
MRT Santa Monica, Inc. Common 1 $.01 1000
150 Rittenhouse Circle, Inc. Common 1 $1.00 1000
</TABLE>
13
<PAGE>
SCHEDULE II
PLEDGE AMENDMENT
This Pledge Amendment, dated _________ __, 1995, is delivered pursuant
to Section 7 of the Pledge Agreement referred to below. The undersigned hereby
agrees that this Pledge Amendment may be attached to the Pledge Agreement, dated
as of September 29, 1995, between the undersigned and Wilmington Trust Company,
as Collateral Agent on behalf of and for the benefit of the Holders referred to
therein and that the Additional Shares listed on this Pledge Amendment shall be
and become part of the Pledged Collateral referred to in the Pledge Agreement
and shall secure all Secured Obligations of the undersigned. The terms defined
in the Pledge Agreement or the Indenture are being used herein as therein
defined.
MORTGAGE AND REALTY TRUST
By: ____________________________________
Title:
<TABLE>
<CAPTION>
Stock Number
Issuer Class of Stock Certificate No(s). Par Value of Shares
- ------ -------------- ------------------ --------- ---------
<S> <C> <C> <C> <C>
</TABLE>
14
<PAGE>
IRREVOCABLE STOCK POWER
-----------------------
FOR VALUE RECEIVED, MORTGAGE AND REALTY TRUST, a Maryland real estate
investment trust, does hereby sell, assign and transfer unto___________________,
One Thousand (1,000) Shares of the Common Stock, $1.00 par value, of 150
RITTENHOUSE CIRCLE, INC., a Maryland corporation ("Corporation"), standing in
the name of MORTGAGE AND REALTY TRUST, on the books of the Corporation
represented by Certificate No. __ herewith, and does hereby irrevocably
constitute and appoint ___________________ attorney to transfer the said stock
on the books of the Corporation with full power of substitution in the premises.
Dated: __________________
MORTGAGE AND REALTY TRUST
By: /s/ DANIEL F. HENNESSEY
------------------------------
Daniel F. Hennessey
Treasurer and C.F.O.
<PAGE>
IRREVOCABLE STOCK POWER
-----------------------
FOR VALUE RECEIVED, MORTGAGE AND REALTY TRUST, a Maryland Real Estate
Investment Trust, does hereby sell, assign and transfer unto___________________,
One Thousand (1,000) Shares of the Common Stock, $0.01 par value, of MRT SANTA
MONICA, INC., a California corporation ("Corporation"), standing in the name of
MORTGAGE AND REALTY TRUST on the books of the Corporation represented by
Certificate No. __ herewith, and does hereby irrevocably constitute and appoint
__________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: __________________
MORTGAGE AND REALTY TRUST
By: /s/ DANIEL F. HENNESSEY
-----------------------------
Daniel F. Hennessey
Treasurer and C.F.O.
<PAGE>
IRREVOCABLE STOCK POWER
-----------------------
FOR VALUE RECEIVED, MORTGAGE AND REALTY TRUST, a Maryland real estate
investment trust, does hereby sell, assign and transfer unto___________________,
One Thousand (1,000) Shares of the Common Stock, no par value, of MRT NEWARK,
INC., a California corporation ("Corporation"), standing in the name of MORTGAGE
AND REALTY TRUST on the books of the Corporation represented by Certificate No.
__ herewith, and does hereby irrevocably constitute and appoint
__________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: __________________
MORTGAGE AND REALTY TRUST
By: /s/ DANIEL F. HENNESSEY
------------------------------
Daniel F. Hennessey
Treasurer and C.F.O.
<PAGE>
IRREVOCABLE STOCK POWER
-----------------------
FOR VALUE RECEIVED, MORTGAGE AND REALTY TRUST, a Maryland real estate
investment trust, does hereby sell, assign and transfer unto___________________,
One Thousand (1,000) Shares of the Common Stock, no par value, of MRT WEST,
INC., a California corporation ("Corporation"), standing in the name of MORTGAGE
AND REALTY TRUST on the books of the Corporation represented by Certificate No.
__ herewith, and does hereby irrevocably constitute and appoint
___________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: __________________
MORTGAGE AND REALTY TRUST
By: /s/ DANIEL F. HENNESSEY
---------------------------------
Daniel F. Hennessey
Treasurer and C.F.O.
<PAGE>
IRREVOCABLE STOCK POWER
-----------------------
FOR VALUE RECEIVED, MORTGAGE AND REALTY TRUST, a Maryland real estate
investment trust, does hereby sell, assign and transfer unto___________________,
One Thousand (1,000) Shares of the Common Stock, no par value, of MRT CREEKSIDE,
INC., a California corporation ("Corporation"), standing in the name of MORTGAGE
AND REALTY TRUST, on the books of the Corporation represented by Certificate No.
__ herewith, and does hereby irrevocably constitute and appoint
___________________ attorney to transfer the said stock on the books of the
Corporation with full power of substitution in the premises.
Dated: __________________
MORTGAGE AND REALTY TRUST
By: /s/ DANIEL F. HENNESSEY
--------------------------------
Daniel F. Hennessey
Treasurer and C.F.O.
<PAGE>
Exhibit 10.1
REGISTRATION RIGHTS AGREEMENT
REGISTRATION RIGHTS AGREEMENT, dated as of September 29, 1995, among
Mortgage and Realty Trust and the holders listed on the signature pages hereto.
1. DEFINITIONS.
Capitalized terms used in this Registration Rights Agreement (this
"Agreement") but not otherwise defined herein shall have the meanings given to
them in the Plan (as defined below). Each reference herein to an agreement,
document or instrument shall mean that agreement, document or instrument as from
time to time amended, modified or supplemented in accordance with its terms,
including in each case all exhibits, annexes and schedules to such agreement,
document or instrument, all of which are incorporated by reference to such
agreement, document or instrument.
As used in this Agreement, the following capitalized terms shall have the
meanings ascribed to them below:
"Business Day" means a day of the year on which banks are not required or
authorized to close in New York City.
"Common Stock" means the Common Stock, par value $1.00 per share, of MRT
being issued pursuant to the Plan.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or
any similar federal statute then in effect, and a reference to a particular
section thereof shall be deemed to include a reference to the comparable
section, if any, of any such similar federal statute.
"Holder" means a registered holder of Registrable Securities.
"Initial Holder" means (i) any Person who will initially hold 5% or more of
the outstanding shares of Common Stock upon the Effective Date, (ii) any holder
of New Senior Notes who might be deemed to be an underwriter (within the meaning
of the Securities Act) and who therefore requests Registrable Securities, (iii)
any investment fund for which any Person otherwise within any other subsection
of this definition acts as manager, (iv) any partnership or other entity for
which any Person otherwise within any other subsection of this definition acts
directly or indirectly as a general partner or controlling stockholder and (v)
any Person otherwise affiliated with any Person otherwise within any other
subsection of this definition.
"MRT" means Mortgage and Realty Trust, a Maryland real estate investment
trust.
<PAGE>
"Person" means an individual, partnership, joint venture, corporation,
trust, unincorporated organization or government or any department or agency
thereof, or any other entity.
"Plan" means the Plan of Reorganization of MRT dated July 12, 1995 to
which this Agreement is Exhibit C.
"Prospectus" means the prospectus included in any Registration Statement,
as amended or supplemented by any prospectus supplement with respect to the
terms of the offering of any portion of the Registrable Securities covered by
such Registration Statement or any other amendments and supplements to such
prospectus, including without limitation any preliminary prospectus, any pre-
effective or post-effective amendment and all material incorporated by reference
in any prospectus.
"Registrable Securities" means shares of Common Stock and New Senior Notes
which are issued to any Initial Holder pursuant to the Plan, any such shares of
Common Stock or New Senior Notes transferred by any Initial Holder to a
transferee and any securities issued or issuable in respect of or in exchange
for any of such shares of Common Stock or New Senior Notes by way of a stock
dividend or other distribution, stock split, reverse stock split or other
combination of shares, recapitalization, reclassification, merger, consolidation
or exchange offer. As to any particular Registrable Securities, once issued
such securities shall cease to be Registrable Securities when (i) a Registration
Statement with respect to the sale of such securities shall have become
effective under the Securities Act and such securities shall have been disposed
of in accordance with such registration statement, (ii) such securities shall
have been sold pursuant to Rule 144 (or any successor provision) under the
Securities Act, (iii) such securities shall have been otherwise transferred or
exchanged and new certificates for such securities not bearing a legend
restricting further transfer shall have been delivered by MRT, (iv) such
securities shall have ceased to be outstanding or (v) such securities can be
distributed to the public without restrictions of any kind pursuant to Rule
144(k) (or any such successor provision) under the Securities Act.
"Registration Expenses" has the meaning set forth in Section 6.
"Registration Statement" means any registration statement of MRT which
covers Registrable Securities pursuant to the provisions of this Agreement, all
amendments and supplements to such Registration Statement, including post-
effective amendments, and all exhibits and all material incorporated by
reference in such Registration Statement.
2
<PAGE>
"SEC" means the Securities and Exchange Commission or any other federal
agency at the time administering the Securities Act or the Exchange Act.
"Securities Act" means the Securities Act of 1933, as amended, or any
similar federal statute then in effect, and a reference to a particular section
thereof shall be deemed to include a reference to the comparable section, if
any, of any such similar federal statute.
2. SHELF REGISTRATION.
(a) MRT'S OBLIGATION TO FILE. MRT shall file, within 60 days from the
Effective Date, and shall use its best efforts to cause to be declared effective
as soon as possible after such filing, a Registration Statement or Registration
Statements under the Securities Act for the offering on a continuous or delayed
basis in the future of each of the Registrable Securities (the "Shelf
Registration").
(b) MRT'S OBLIGATION TO MAINTAIN. MRT agrees to use its best efforts to
keep the Shelf Registration continuously effective for the period beginning on
the date on which the Shelf Registration is declared effective and ending on the
earlier of (x) the third anniversary of such date plus the number of days of any
suspension of the Holders' right to sell under paragraph (c) of this Section 2
and (y) the first date that there are no Registrable Securities (the "Shelf
Registration Period"). During the Shelf Registration Period, MRT shall
supplement or make amendments to the Shelf Registration, if required by the
Securities Act or by the rules and regulations promulgated thereunder or if
requested by any Holder or underwriter of Registrable Securities, and use its
best effort to have such supplements and amendments declared effective as soon
as practicable after filing.
(c) SUSPENSION OF SALES. MRT shall have the right to require the Holders
not to sell under the Shelf Registration during one or more periods aggregating
not more than 90 days in each twelve-month period during the Shelf Registration
Period in the event that (i) MRT, in accordance with the advice of its counsel,
would be required to disclose in the Prospectus information not otherwise then
required by law to be publicly disclosed and (ii) in the reasonable judgment of
MRT's Board of Trustees, there is a reasonable likelihood that such disclosure,
or any other action to be taken in connection with the Prospectus, would
materially and adversely affect any existing or prospective material business
situation, transaction or negotiation or otherwise materially and adversely
affect MRT.
3
<PAGE>
(d) NOTICE. MRT shall give each Holder prompt notice in the event that
(i) MRT has suspended sales of Registrable Securities under paragraph (c) of
this Section 2 or (ii) the Registration Statement or any related Prospectus is
not accurate and changes should be made so that such Registration Statement or
Prospectus will not contain any untrue statement of a material fact nor omit to
state any material fact required to be stated therein or necessary to make the
statements therein not misleading.
(e) INCLUSION OF OTHER SECURITIES. No securities other than Registrable
Securities shall be included in the Shelf Registration; PROVIDED, HOWEVER, that
this paragraph shall not prohibit MRT from filing other registration statements.
3. DEMAND REGISTRATION.
(a) REQUESTS FOR REGISTRATION. Subject to the provisions of this Section
3, any Holder or group of Holders holding at least 10% of the aggregate
Registrable Securities of the applicable class outstanding at such time may, at
any time during the period beginning at the end of the Shelf Registration Period
and ending on the earlier of (x) the seventh anniversary thereof and (y) the
first date on which there are no Registrable Securities (the "Demand
Registration Period") make a written request for registration under the
Securities Act of all or any part of such Holders' Registrable Securities (a
"Demand Registration"). Such request shall specify the amount and kind of
Registrable Securities to be registered and the intended method or methods of
disposition. Within 10 days after receipt of such request, MRT shall send
written notice of such request to all Holders and shall, subject to the
provisions of this Section 3 and of Section 4(b) hereof as if the inclusion of
such shares were pursuant to Section 4, include in such Demand Registration all
Registrable Securities with respect to which MRT receives written requests
(specifying the amount and kind of Registrable Securities to be registered and
the intended method or methods of disposition) for inclusion therein within 20
days after such notice is sent. As promptly as practicable thereafter, MRT
shall file with the SEC a Registration Statement, registering all Registrable
Securities that any Holders have requested MRT to register, for disposition in
accordance with the intended method or methods set forth in their notices to
MRT. MRT shall use its best efforts to cause such Registration Statement to be
declared effective as soon as practicable after filing and to remain effective
until the earlier of (i) 90 days following the date on which it was declared
effective and (ii) the date on which all of the Registrable Securities covered
thereby are disposed of in accordance with the method or methods of disposition
stated therein.
4
<PAGE>
(b) NUMBER OF REGISTRATIONS. The Holders shall be entitled to request one
Demand Registration during the Demand Registration Period; PROVIDED, HOWEVER,
that MRT will not be obligated to comply with any such request unless (i) such
request is made by a group of Holders holding at least 25% of the aggregate
amount of Registrable Securities, which group shall include at least one Holder
holding at least 10% of the aggregate amount of Registrable Securities of the
applicable class at the time outstanding, and (ii) the Registrable Securities to
be registered in such Demand Registration constitute at least 5% of the
aggregate amount of Registrable Securities of the applicable class at the time
outstanding; and, PROVIDED, FURTHER, that the Holders shall be entitled to
request an additional Demand Registration during the Demand Registration Period
if the Holders are unable to sell all the Registrable Securities in connection
with the initial Demand Registration.
(c) S-3 REGISTRATIONS. Notwithstanding anything in this Section 3 to the
contrary, any Holder may request an unlimited number of Demand Registrations
during the Demand Registration Period, if (i) the Holder, in its written request
for a Demand Registration, undertakes to bear all Registration Expenses incurred
by MRT or reimburse MRT for such costs in connection with the Demand
Registration and (ii) MRT is eligible under the Securities Act to register the
Registrable Securities on a Registration Statement on Form S-3.
(d) SUSPENSION OF REGISTRATION. MRT shall have the right to delay the
filing or effectiveness of a Registration Statement for any Demand Registration
or to require the Holders not to sell under any such Registration Statement,
during one or more periods aggregating not more than 90 days in each twelve-
month period during the Demand Registration Period, in the event that (i) MRT
would, in accordance with the advice of its counsel, be required to disclose in
the Prospectus information not otherwise then required by law to be publicly
disclosed and (ii) in the reasonable judgment of MRT's Board of Trustees, there
is a reasonable likelihood that such disclosure, or any other action to be taken
in connection with the Prospectus, would materially and adversely affect any
existing or prospective material business situation, transaction or negotiation
or otherwise materially and adversely affect MRT.
(e) OFFERING BY MRT. MRT may include in any Demand Registration
additional shares of capital stock to be sold for MRT's account pursuant to such
registration; PROVIDED, HOWEVER, that if the managing underwriter for a Demand
Registration that involves an underwritten offering shall advise MRT that, in
its opinion, the inclusion of the amount and kind of shares of capital stock to
be sold for MRT's account would adversely affect the success of the offering
5
<PAGE>
for the selling Holders, then the number and kind of shares of capital stock
to be sold for MRT's account shall be reduced (and may be reduced to zero) in
accordance with the managing underwriter's recommendations.
4. INCIDENTAL REGISTRATION.
(a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. If at any time during the
Demand Registration Period, MRT proposes to register any of its equity
securities under the Securities Act, whether or not for sale for its own account
(other than a registration on Form S-4 or Form S-8, or any successor or similar
forms), in a manner that would permit registration of Registrable Securities for
sale to the public under the Securities Act, it will each such time promptly
give written notice to all Holders of its intention to do so, of the
registration form of the SEC that has been selected by MRT and of rights of
Holders under this Section 4 (the "Section 4 Notice"). MRT will use its best
efforts to include in the proposed registration all Registrable Securities that
MRT is requested in writing, within 15 days after the Section 4 Notice is given,
to register by the Holders thereof. No registration effected under this Section
4 shall relieve MRT of its obligations to effect registrations upon request
under Section 3 and, notwithstanding anything to the contrary in Section 3, no
Holder shall have the right to require MRT to register any Registrable
Securities pursuant to Section 3 until the later of (A) the completion of the
distribution of the securities offered and registered pursuant to the Section 4
Notice and (B) 90 days after the date each registration statement effected under
this Section 4 is declared effective.
(b) PRIORITY IN INCIDENTAL REGISTRATION. If the managing underwriter for
a registration pursuant to this Section 4 that involves an underwritten offering
shall advise MRT that, in its opinion, the inclusion of the amount and kind of
Registrable Securities to be sold for the account of Holders would adversely
affect the success of the offering, then the number and kind of Registrable
Securities to be sold for the account of such Holders shall be reduced (and may
be reduced to zero) in accordance with the managing underwriter's
recommendation. In the event that the number of Registrable Securities to be
included in any registration is reduced (but not to zero), the number of such
Registrable Securities included in such registration shall be allocated pro rata
among all requesting Holders, on the basis of the relative number of shares of
such Registrable Securities each such Holder has requested to be included in
such registration. If, as a result of the proration provisions of this Section
4(b), any Holder shall not be entitled to include all Registrable Securities in
a registration pursuant to this Section 4 that such Holder has requested be
6
<PAGE>
included, such Holder may elect to withdraw its Registrable Securities from the
registration; PROVIDED, HOWEVER, that such withdrawal election shall be
irrevocable and, after making a withdrawal election, a Holder shall no longer
have any right to include Registrable Securities in the registration as to which
such withdrawal election was made.
(c) MERGER, CONSOLIDATION, ETC. Notwithstanding anything in this Section
4 to the contrary, Holders shall not have any right to include their Registrable
Securities in any distribution or registration of equity securities by MRT which
is a result of a merger, consolidation, acquisition, exchange offer,
recapitalization, other reorganization, dividend reinvestment plan, stock option
plan or other employee benefit plan, or any similar transaction having the same
effect.
5. REGISTRATION PROCEDURES.
(a) MRT TO USE BEST EFFORTS. In connection with MRT's registration
obligations pursuant to Sections 2 and 3 hereof, MRT shall use its best efforts
to effect such registrations to permit the sale of such Registrable Securities
in accordance with the intended method or methods of disposition thereof, and
pursuant thereto MRT shall use its best efforts:
(i) to prepare and file with the SEC a Registration Statement or
Registration Statements relating to the registration on any appropriate form
under the Securities Act, and to cause such Registration Statements to become
effective as soon as practicable (but in no event later than 60 days after the
Effective Date) and to remain continuously effective for the time period
required by this Agreement to the extent permitted under the Securities Act;
PROVIDED, HOWEVER, that as soon as practicable but in no event later than ten
Business Days before filing such Registration Statement, any related Prospectus
or any amendment or supplement thereto, other than any amendment or supplement
made solely as a result of incorporation by reference of documents filed with
the SEC subsequent to the filing of such Registration Statement (or, in the case
of any Prospectus supplement or post-effective amendment relating to a proposed
shelf "draw-down" pursuant to Section 2 hereof, two Business Days before the
filing thereof), MRT shall furnish to the Holders of the Registrable Securities
covered by such Registration Statement (or, in the case of any Prospectus
supplement or post-effective amendment relating to a proposed shelf "draw-down"
pursuant to Section 2 hereof, to the selling Holders) and the underwriters, if
any, copies of all such documents proposed to be filed, which documents shall be
subject to the review of such Holders and underwriters; MRT shall cooperate with
such underwriters and Holders
7
<PAGE>
to prepare, as soon as practicable, a document that is responsive in all
material respects to the reasonable objections of such underwriters and
Holders;
(ii) to prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement effective for the applicable period set forth in Sections
2(a) and 3(a); and to cause the related Prospectus to be supplemented by any
required Prospectus supplement, and as so supplemented to be filed in accordance
with the Securities Act and any rules and regulations promulgated thereunder;
and otherwise to comply with the provisions of the Securities Act as may be
necessary to facilitate the disposition of all Registrable Securities covered by
such Registration Statement during the applicable period in accordance with the
intended method or methods of disposition by the selling Holders thereof set
forth in such Registration Statement or such Prospectus or Prospectus
supplement;
(iii) to notify the selling Holders and the managing underwriters, if any,
promptly if at any time (A) any Prospectus, Registration Statement or amendment
or supplement thereto is filed, (B) any Registration Statement, or any post-
effective amendment thereto, becomes effective, (C) the SEC requests any
amendment or supplement to, or any additional information in respect of, any
Registration Statement or Prospectus, (D) the SEC issues any stop order
suspending the effectiveness of a Registration Statement or initiates any
proceedings for that purpose, (E) the representations and warranties of MRT
contemplated by subclause (B) of clause (xiii) of this paragraph (a) cease to be
true and correct, (F) MRT receives any notice that the qualification of any
Registrable Securities for sale in any jurisdiction has been suspended or that
any proceeding has been initiated for the purpose of suspending such
qualification, or (G) any event occurs which requires that any changes be made
in such Registration Statement or any related Prospectus so that such
Registration Statement or Prospectus will not contain any untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary to make the statements therein not misleading;
(iv) to make every reasonable effort to obtain the withdrawal of any order
suspending the effectiveness of a Registration Statement, or the qualification
of any Registrable Securities for sale in any jurisdiction, at the earliest
possible moment;
(v) if requested by the managing underwriters or any Holder of Registrable
Securities being sold in connection with an underwritten offering, promptly to
incorporate into a Prospectus supplement or a post-effective amendment to the
Registration Statement any information which the managing
8
<PAGE>
underwriters and such Holder reasonably agree is required to be included therein
relating to such sale of Registrable Securities; and to file such supplement or
post-effective amendment as soon as practicable in accordance with the
Securities Act and the rules and regulations promulgated thereunder;
(vi) to furnish to each selling Holder and each managing underwriter, if
any, one signed copy of the Registration Statement or Registration Statements
and any post-effective amendment thereto, including all financial statements and
schedules thereto, all documents incorporated therein by reference and all
exhibits thereto (including exhibits incorporated by reference) as promptly as
practicable after filing such documents with the SEC;
(vii) to deliver to each selling Holder and each underwriter, if any, as
many copies of the Prospectus or Prospectuses (including each preliminary
Prospectus) and any amendment or supplement thereto as such Persons may
reasonably request; and to consent to the use of such Prospectus or any
amendment or supplement thereto by each such selling Holder and underwriter, if
any, in connection with the offering and sale of the Registrable Securities
covered by such Prospectus, amendment or supplement;
(viii) prior to any public offering of Registrable Securities, to register
or qualify Registrable Securities for offer and sale under the securities or
blue sky laws of such jurisdictions as may be reasonably requested by the
Holders of a majority of the Registrable Securities included in such
Registration Statement; to keep each such registration or qualification
effective during the period set forth in Sections 2(a) or 3(a) that the
applicable Registration Statement is required to be kept effective; and to do
any and all other acts or things reasonably necessary to enable the disposition
in such jurisdictions of the Registrable Securities covered by such Registration
Statement; provided, however, that MRT will not be required to qualify generally
to do business in any jurisdiction where it is not then so qualified or to take
any action which would subject it to general service of process in any
jurisdiction where it is not then so subject;
(ix) to cooperate with the selling Holders and the underwriters, if any, in
the preparation and delivery of certificates representing the Registrable
Securities to be sold under the Registration Statement (which certificates shall
be in DTC eligible form), such certificates to be in such denominations and
registered in such names as such selling Holders or managing underwriters may
request at least two Business Days prior to any sale of Registrable Securities
represented by such certificates;
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(x) to cause the Registrable Securities covered by the applicable
Registration Statement to be registered with or approved by such other
governmental agencies or authorities as may be necessary by virtue of the
business and operations of MRT to enable the seller or sellers thereof, or the
underwriters, if any, to consummate the disposition of such Registrable
Securities in conformity with federal law and the laws of the jurisdictions in
which such Registrable Securities shall be registered or qualified pursuant to
subclause (viii) above;
(xi) upon the occurrence of any event described in subclause (G) of clause
(iii) above, promptly to prepare and file a supplement or post-effective
amendment to the applicable Registration Statement or Prospectus or any document
incorporated therein by reference, and any other required documents, so that
such Registration Statement and Prospectus will not thereafter contain an untrue
statement of a material fact or omit to state any material fact necessary to
make the statements therein not misleading, and to cause such supplement or
post-effective amendment to become effective as soon as practicable;
(xii) to provide a transfer agent for such Registrable Securities no later
than the effective date of such Registration Statement; to cause any other
Registrable Securities covered by such Registration Statement to be listed (or
included) on each securities exchange (or quotation system operated by a
national securities association) on which securities of the same class and
series, if any, are then listed (or included); and to obtain a CUSIP number for
the Registrable Securities no later than the effective date of such Registration
Statement;
(xiii) to take all other actions in connection therewith as are reasonably
necessary or desirable in order to expedite or facilitate the disposition of the
Registrable Securities included in such Registration Statement and, in the case
of an underwritten offering: (A) to enter into an underwriting agreement in
customary form for the managing underwriter with respect to issuers of similar
market capitalization and reporting and financial histories; (B) to make
representations and warranties to each Holder participating in such offering and
to each of the underwriters, in such form, substance and scope as are
customarily made to the managing underwriters by issuers of similar market
capitalizations and reporting and financial histories; (C) to obtain opinions of
counsel to MRT at the closing of such offering and an update thereof at the time
of effectiveness of any post-effective amendment to such Registration Statement
(other than by reason of incorporation by reference of documents filed with the
SEC) addressed to each Holder participating in such offering and to each of the
underwriters, such opinions and updates to be in customary
10
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form and to cover the matters customarily covered in opinions obtained in
connection with underwritten offerings by the managing underwriters for issuers
of similar market capitalization and reporting and financial histories; (D) to
obtain "comfort" letters from MRT's independent certified public accountants
addressed to the underwriters and each Holder participating in such offering,
such letters to be in customary form and to cover the matters customarily
covered in "comfort" letters to the managing underwriters obtained in connection
with underwritten offerings by the managing underwriters for issuers of similar
market capitalization and reporting and financial histories; (E) to provide,
in the underwriting agreement to be entered into in connection with such
offering, indemnification provisions and procedures no less favorable than
those set forth in Section 7 hereof with respect to all parties to be
indemnified pursuant to such Section 7; and (F) to timely prepare and deliver
such customary documents and certificates as may be requested by Holders of the
Registrable Securities included in such Registration Statement and the managing
underwriters to evidence compliance with clause (B) of this paragraph (xiii) and
with any customary conditions contained in the underwriting agreement entered
into by MRT in connection with such offering;
(xiv) in the case of any offering other than an underwritten offering:
(A) to obtain an opinion of counsel to MRT at the time of effectiveness of such
Registration Statement covering such offering and an update thereof at the time
of effectiveness of any post-effective amendment to such Registration Statement
(other than by reason of incorporation by reference of documents filed with the
SEC) addressed to each Holder of any Registrable Securities covered by such
Registration Statement, covering such matters as the Holders may reasonably
request; (B) to obtain "comfort" letters from MRT's independent certified public
accountants addressed to each Holder of any Registrable Securities covered by
such Registration Statement, covering matters customarily covered in such
"comfort" letters, or such additional matters as the Holders may reasonably
request; and (C) to deliver a certificate of a senior executive officer of MRT
at the time of effectiveness of such Registration Statement and, upon the
request of Holders of a majority of the Registrable Securities included in such
Registration Statement, updates thereof, such certificates to cover matters
customarily covered in officers' certificates delivered in connection with
underwritten offerings by issuers with similar market capitalization and
reporting and financial histories;
(xv) to make available for inspection by representatives of the Holders
all financial and other records, pertinent corporate documents and properties of
MRT, and to cause MRT's officers, directors and employees to supply all infor-
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mation reasonably requested by any such representatives, in connection with
a Registration Statement;
(xvi) to comply with all applicable rules and regulations of the SEC
relating to such Registration Statement and the distribution of the securities
being offered or otherwise necessary in order to perform MRT's obligations under
this paragraph (a), but not later than 15 months after the effective date of the
Registration Statement, an earnings statement covering the period of at least 12
months beginning with the first full month after the effective date of such
Registration Statement, which earnings statements shall satisfy the provisions
of Section 11(a) of the Securities Act;
(xvii) to cooperate and assist in any filings required to be made with the
National Association of Securities Dealers, Inc. and in the performance of any
customary or required due diligence investigation by any underwriter; and
(xviii) to take all other reasonable steps necessary and appropriate to
effect such registration in the manner contemplated by this Agreement.
(b) HOLDERS' OBLIGATION TO FURNISH INFORMATION. MRT may require each
Holder of Registrable Securities as to which any registration is being effected
to furnish to MRT such information regarding the distribution of such
Registrable Securities as MRT may from time to time reasonably request.
(c) SUSPENSION OF SALES PENDING AMENDMENT OF PROSPECTUS. Each Holder
agrees that, upon receipt of any notice from MRT of the happening of any event
of the kind described in subclauses (C) and (G) of clause (a)(iii) above, such
Holder will suspend the disposition of any Registrable Securities covered by
such Registration Statement or Prospectus until such Holder's receipt of the
copies of a supplemented or amended Prospectus contemplated by clause (a)(xi)
above, or until it is advised in writing by MRT that the use of the applicable
Prospectus may be resumed. If MRT shall have given any such notice during a
period when Shelf Registration or a Demand Registration is in effect, the three
year period described in Section 2(b) and the 90-day period described in Section
3(a) shall be extended by the number of days of such suspension period.
6. REGISTRATION EXPENSES.
Subject to Section 3(c), all expenses incident to MRT's performance of or
compliance with its obligations under this Agreement, including without
limitation all (i) registration and filing fees, (ii) fees and expenses of
compliance with securities or blue sky laws (including fees and disburse-
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ments of counsel in connection with blue sky qualifications or registrations
of (or the obtaining of exemptions therefrom), or legal investment memoranda
regarding, the Registrable Securities), (iii) printing expenses (including
expenses of printing Prospectuses), (iv) fees and disbursements of its counsel
and its independent certified public accountants (including the expenses of any
special audit or "comfort" letters required by or incident to such performance
or compliance, listing fees and expenses or NASD fees), (v) messenger and
delivery expenses, (vi) internal expenses (including all salaries and expenses
of its officers and employees performing legal or accounting duties), (vii)
securities acts liability insurance (if MRT elects to obtain such insurance),
(viii) reasonable fees and expenses of any special experts retained by MRT in
connection with any registration hereunder, (ix) reasonable fees and expenses
of other Persons retained by MRT in connection with registration hereunder,
and (x) reasonable fees and expenses of up to two counsel for the Holders of
Registrable Securities covered by each Registration Statement, with such counsel
to be selected by Holders of a majority of such Registrable Securities (all such
expenses being herein referred to as "Registration Expenses"), shall be borne
by MRT; PROVIDED, HOWEVER, that Registration Expenses shall not include any
underwriting discounts, commissions, fees or transfer taxes, if any,
attributable to the sale of the Registrable Securities.
7. INDEMNIFICATION.
(a) INDEMNIFICATION BY MRT. In the event of any registration of any
securities of MRT under the Securities Act pursuant to Sections 2, 3 or 4
hereof, MRT will, and hereby does, indemnify and hold harmless, to the extent
permitted by law, the seller of any Registrable Securities covered by such
Registration Statement, its directors and officers or general and limited
partners (and the directors and officers thereof), each other Person who
participates as an underwriter, if any, in the offering or sale of such
securities and each other Person, if any, who controls such seller or any such
underwriter within the meaning of the Securities Act, against any and all
losses, claims, damages or liabilities, joint or several, and expenses
(including any amounts paid in any settlement effected with MRT's consent, which
consent shall not be unreasonably withheld) to which such seller or any such
director, officer, general or limited partner, underwriter or controlling Person
may become subject under the Securities Act, common law or otherwise, insofar as
such losses, claims, damages or liabilities (or actions or proceedings in
respect thereof) arise out of or are based upon (i) any untrue statement or
alleged untrue statement of a material fact contained in any Registration
Statement under which such securities were registered under
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the Securities Act or the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, (ii) any untrue statement or alleged untrue statement
of a material fact contained in any preliminary Prospectus, together with the
documents incorporated by reference therein (as amended or supplemented if MRT
shall have filed with the SEC any amendment thereof or supplement thereto), if
used prior to the effective date of such Registration Statement, or contained
in the Prospectus, together with the documents incorporated by reference
therein (as amended or supplemented if MRT shall have filed with the SEC any
amendment thereof or supplement thereto), or the omission or alleged omission
to state therein a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading or (iii) any violation by MRT of any federal,
state or common law rule or regulation applicable to MRT and relating to action
required of or inaction by MRT in connection with any such registration, and
MRT will reimburse such seller and each such director, officer, general or
limited partner, underwriter and controlling Person for any legal or any other
expenses reasonably incurred by any of them in connection with investigating or
defending any such loss, claim, liability, action or proceeding; provided,
however, that MRT shall not be liable to any such seller or any such director,
officer, general or limited partner, underwriter or controlling Person in any
such case to the extent that any such loss, claim, damage, liability (or action
or proceeding in respect thereof) or expense arises out of or is based upon any
untrue statement or alleged untrue statement or omission or alleged omission
made in such Registration Statement or amendment thereof or supplement thereto
or in any such preliminary, final or summary Prospectus in reliance upon and in
conformity with written information furnished to MRT by or on behalf of such
seller or such director, officer, general or limited partner, underwriter or
controlling Person, specifically stating that it is for use in the preparation
thereof.
(b) INDEMNIFICATION BY THE SELLERS. In consideration of MRT's including
any Registrable Securities in any Registration Statement filed in accordance
with Sections 2, 3 or 4 hereof, the prospective seller of such Registrable
Securities and any underwriter shall be deemed to have agreed to indemnify and
hold harmless (in the same manner and to the same extent as set forth in Section
7(a) hereof) MRT and its directors, trustees and officers and each person
controlling MRT within the meaning of the Securities Act and all other
prospective sellers and their directors, officers or respective controlling
Persons with respect to any statement or alleged statement in or omission or
alleged omission from such Registration Statement, any preliminary, final or
summary Prospectus contained therein, or any amendment or
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supplement, if such statement or alleged statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to MRT or its representatives by or on behalf of such seller or
underwriter specifically stating that it is for use in the preparation of such
Registration Statement, preliminary, final or summary Prospectus or amendment
or supplement. Such indemnity shall remain in full force and effect regardless
of any investigation made by or on behalf of MRT or any of the prospective
sellers or any of their directors, officers or controlling Persons.
(c) NOTICES OF CLAIMS. Promptly after receipt by an indemnified party
hereunder of written notice of the commencement of any action or proceeding with
respect to which a claim for indemnification may be made pursuant to this
Section 7, such indemnified party will, if a claim in respect thereof is to be
made against an indemnifying party, give written notice to the latter of the
commencement of such action; PROVIDED, HOWEVER, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under this Section 7, except to the
extent that the indemnifying party is prejudiced by such failure of any
indemnified party to give notice. If any such claim or action shall be brought
against an indemnified party, and it shall notify the indemnifying party
thereof, the indemnifying party shall, at its own expense, be entitled to
participate therein, and, to the extent that it wishes, jointly with any other
similarly notified indemnifying party, to assume the defense thereof with
counsel reasonably satisfactory to the indemnified party and the indemnifying
party shall not be liable to such indemnified party for any legal or other
expenses; PROVIDED, HOWEVER, that if, in the indemnified party's reasonable
judgment, a conflict of interest between the indemnified party and the
indemnifying party exists in respect of such claim, then such indemnified party
shall have the right to participate in the defense of such claim and to employ
one firm of attorneys at the indemnifying party's expense to represent such
indemnified party. No indemnified party will consent to entry of any judgment
or enter into any settlement without the indemnifying party's consent to such
judgment or settlement, which shall not be unreasonably withheld.
(d) OTHER INDEMNIFICATION. Indemnification similar to that specified in
the preceding paragraphs of this Section 7 (with appropriate modifications)
shall be given by MRT and each seller of Registrable Securities with respect to
any required registration or other qualification of securities under any state
securities and blue sky laws.
(e) CONTRIBUTION. If the indemnification provided for in this Section 7
is unavailable or insufficient to hold
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harmless an indemnified party under this Section 7, then each indemnifying
party shall contribute to the amount paid or payable by such indemnified party
as a result of the losses, claims, damages or liabilities referred to in this
Section 7 in such proportion as is appropriate to reflect the relative fault of
the indemnifying party on the one hand and the indemnified party on the other
hand in connection with statements or omissions which resulted in such losses,
claims, damages or liabilities, as well as any other relevant equitable
considerations. The relative fault shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the indemnifying party or the indemnified party and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such untrue statements or omission. MRT agrees, and the
Holders (in consideration of MRT's including any Registrable Securities in any
Registration Statement filed in accordance with Sections 2, 3 or 4 hereof) shall
be deemed to have agreed, that it would not be just and equitable if
contributions pursuant to this Section 7(e) were to be determined by pro rata
allocation or by any other method of allocation which does not take account of
the equitable considerations referred to in the first sentence of this
Section 7(e). The amount paid by an indemnified party as a result of the
losses, claims, damages or liabilities referred to in the first sentence of
this Section 7(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim (which shall be limited as provided in
Section 7(c) if the indemnifying party has assumed the defense of any such
action in accordance with the provisions thereof) which is the subject of this
Section 7(e). No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any person who was not guilty of such fraudulent
misrepresentation. Promptly after receipt by an indemnified party under this
Section 7(e) of notice of the commencement of any action against such party in
respect of which a claim for contribution may be made against an indemnifying
party under this Section 7(e), such indemnified party shall notify the
indemnifying party in writing of the commencement thereof if the notice
specified in Section 7(c) has not been given with respect to such action;
provided, however, that the omission so to notify the indemnifying party shall
not relieve the indemnifying party from any liability which it may have to any
indemnified party otherwise under this Section 7(e), except to the extent that
the indemnifying party is prejudiced by such failure of any indemnified party to
give notice. Notwithstanding anything in this Section 7(e) to the contrary, no
indemnifying party (other than MRT) shall be required pursuant to this Section
7(e) to contribute any
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amount in excess of the proceeds received by such indemnifying party from the
sale of Registrable Securities in the offering to which the losses, claims,
damages or liabilities of the indemnified parties relate.
8. RULE 144 AND RULE 144A.
(a) MRT shall file the reports required to be filed by it under the
Securities Act and the Exchange Act and the rules and regulations promulgated
thereunder, so long as it is subject to such reporting requirements, all to the
extent required from time to time to enable such Holder to sell Registrable
Securities without registration under the Securities Act within the limitations
of the exemptions provided by Rule 144, as such Rule may be amended from time to
time or any similar rule or regulation hereafter adopted by the SEC. Upon the
request of any Holder, MRT shall deliver to such Holder a written statement
stating whether it has complied with such requirements.
(b) MRT shall provide, upon the request of any Holder, to any prospective
purchaser of any Registrable Securities, all information that may be required to
be delivered to such purchaser to enable such Holder of Registrable Securities
to sell to such purchaser such Registrable Securities without registration under
the Securities Act within the limitation of the exemptions provided by (i) Rule
144A under the Securities Act, as such Rule may be amended from time to time, or
(ii) any similar rule or regulation hereafter adopted by the SEC subject to
receipt of an appropriate confidentiality agreement from such prospective
purchasers in form and substance reasonably satisfactory to MRT (with
appropriate exceptions to permit resale). Upon the request of any Holder, MRT
shall deliver to such Holder a written statement as to whether it has complied
with such requirements.
9. UNDERWRITTEN REGISTRATIONS.
(a) SELECTION OF UNDERWRITERS. If any of the Registrable Securities
covered by the Shelf Registration or any Demand Registration are to be sold in
an underwritten offering, the underwriter or underwriters and managing
underwriter or managing underwriters that will administer the offering shall be
selected, after consultation with MRT, by, and the terms of any underwriting
agreement and other underwriting arrangements shall be approved, after
consultation with MRT, by, the Holders of a majority in aggregate amount of
Registrable Securities included in such offering.
(b) AGREEMENTS OF SELLING HOLDERS. No Holder shall sell any of its
Registrable Securities in any underwritten
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offering pursuant to a registration hereunder unless such Holder agrees to
become a party to the underwriting agreement, provided that the Holders may
require that any and all representations and warranties by, and other agreements
on the part of, MRT to and for the benefit of the underwriters shall also be
made to and for the benefit of such Holders of Registrable Securities and that
any or all of the conditions precedent to the obligations of such underwriters
under such underwriting agreements be conditions precedent to the obligations
of such Holders, and further provided that any such Holder of Registrable
Securities shall not be required to make any representations, warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder's Registrable
Securities and such Holder's intended method of distribution and other
representations required by law.
10. HOLDBACK AGREEMENTS.
(a) RESTRICTIONS ON PUBLIC SALES BY HOLDERS. To the extent not
inconsistent with applicable law, each Holder that is timely notified in writing
by the managing underwriter or underwriters shall not effect any public sale or
distribution (including a sale pursuant to Rule 144) of any issue being
registered in an underwritten offering (other than pursuant to an employee stock
option, stock purchase, stock bonus or similar plan, pursuant to a merger, an
exchange offer or a transaction of the type specified in Rule 145(a) under the
Securities Act or pursuant to a "shelf" registration), any securities of MRT
similar to any such issue or any securities of MRT convertible into or
exchangeable or exercisable for any such issue or any similar issue, during the
10 day period prior to the effective date of the applicable registration
statement, or during the period beginning on such effective date and ending on
the later of (i) the completion of the distribution of such securities pursuant
to such offering and (ii) 90 days after such effective date, except as part of
such registration.
(b) RESTRICTIONS ON PUBLIC SALES BY MRT. If and to the extent requested
by the managing underwriter or underwriters of an underwritten offering, MRT
shall not effect any public sale or distribution of any issue of the same class
or series as Registrable Securities being registered in an underwritten offering
(other than pursuant to an employee stock option, stock purchase, stock bonus or
similar plan, pursuant to a merger, exchange offer or a transaction of the type
specified in Rule 145(a) under the Securities Act or pursuant to a "shelf"
registration), any securities of MRT similar to any such issue or any securities
of MRT convertible into or exchangeable or exercisable for any such issue,
during the 10 day period prior to the
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effective date of the applicable registration statement, or during the period
beginning on such effective date and ending on the later of (i) the completion
of the distribution of such securities pursuant to such offering and (ii) 90
days after such effective date, except as part of such registration.
11. MISCELLANEOUS.
(a) AMENDMENTS AND WAIVERS. This Agreement may be amended and MRT may
take any action herein prohibited, or omit to perform any act herein required to
be performed by it, only if MRT shall have obtained the written consent to such
amendment, action or omission to act, of the Holders of at least a majority of
the Registrable Securities of each class then outstanding (and, in the case of
any amendment, action or omission to act that adversely affects any Holder or
group of Holders differently from any of the other Holders, the written consent
of such Holder or group of Holders). The Holders shall be bound from and after
the date of the receipt of a written notice from MRT setting forth such
amendment or waiver by any consent authorized by this Section 11(a).
(b) NO INCONSISTENT AGREEMENTS. MRT shall not, on or after the date of
this Agreement, enter into any agreement with respect to its securities which is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. MRT has not previously entered
into any agreement with respect to its securities granting any registration
rights to any Person other than the registration rights granted pursuant to this
Agreement.
(c) SUCCESSORS, ASSIGNS AND TRANSFEREES. This Agreement shall be binding
upon and shall inure to the benefit of MRT, the Holders and their respective
successors, assigns and transferees.
(d) INTEGRATION. This Agreement and the documents referred to herein or
delivered pursuant hereto that form a part hereof contain the entire
understanding of MRT and the Initial Holders with respect to its subject matter.
There are no restrictions, agreements, promises, representations, warranties,
covenants or undertakings with respect to the subject matter hereof other than
those expressly set forth herein. This Agreement supersedes all prior
agreements and understandings between MRT and the Initial Holders with respect
to its subject matter.
(e) REMEDIES. Each Holder, in addition to being entitled to exercise all
rights granted by law, including recovery of damages, will be entitled to
specific performance of
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its rights under this Agreement. MRT agrees that monetary damages would not be
adequate compensation for any loss incurred by reason of a breach by it of the
provisions of this Agreement and hereby agrees to waive the defense in any
action for specific performance that a remedy at law would be adequate. In any
action or proceeding brought to enforce any provision of this Agreement or
where any provision hereof is validly asserted as a defense, the successful
party shall be entitled to recover reasonable attorneys' fees in addition to
any other available remedy.
(f) NOTICES. All notices and other communications provided for hereunder
shall be in writing and shall be sent by first class mail, telecopier or hand
delivery:
If to MRT, to:
Mortgage and Realty Trust
8380 Old York Road, Suite 300
Elkins Park, Pennsylvania 19117-1590
Attention: Treasurer
Telecopy No.: (215) 881-1525
Telephone Confirmation: (215) 881-6483
with a copy to:
Milbank, Tweed, Hadley & McCloy
601 South Figueroa Street (30th Floor)
Los Angeles, California 90017
Attention: Paul S. Aronzon, Esq.
Telecopy No.: (213) 629-5063
Telephone Confirmation: (213) 892-4000
If to any of the Holders, to the address of such Holders as shown in the
stock record books of MRT, with a copy to each of the following:
O'Melveny & Myers
400 South Hope Street
Suite 1500
Los Angeles, California 90071-2899
Attention: Robert J. White, Esq.
Telecopy No: (213) 669-6408
Telephone Confirmation: (213) 669-6000
-and-
Weil, Gotshal & Manges
767 Fifth Avenue
New York, New York 10153
Attention: Simeon Gold, Esq.
Telecopy No.: (212) 310-8007
Telephone Confirmation: (212) 310-8000
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all such notices and communications shall be deemed to have been given or made
(i) when delivered by hand, (ii) five Business Days after being deposited in the
mail, postage prepaid or (iii) when telecopied, receipt acknowledged. MRT may
change its address for receipt of notices by notice of such change given in the
manner contemplated hereby to the Holders.
(g) DESCRIPTIVE HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit, expand or otherwise affect
the meaning of the terms contained herein.
(h) SEVERABILITY. In the event that any one or more of the provisions
hereof is held invalid, illegal or unenforceable in any respect for any reason,
the validity, legality and enforceability of any such provision, in every other
respect and of the remaining provisions hereof shall not be in any way impaired,
it being intended that all rights, powers and privileges of MRT and the Holders
shall be enforceable to the fullest extent permitted by law.
(i) GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York, without regard to
the principles thereof relating to conflict of laws thereof, as if it were a
contract between MRT and the Initial Holders made and to be performed entirely
within that state.
(j) TERMINATION. This Agreement shall terminate, and thereby become null
and void, at the end of the Demand Registration period; PROVIDED, HOWEVER, that
the provisions of Section 7 hereof shall survive the termination of this
Agreement.
(k) COUNTERPARTS. This 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 the same Agreement.
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IN WITNESS WHEREOF, the parties hereto have caused this Registration
Rights Agreement to be executed by their respective duly authorized officers or
other representatives as of the day and year first above written.
MORTGAGE AND REALTY TRUST
By: /s/ Daniel F. Hennessey
-------------------------------
Title: C.F.O.
MUTUAL SERIES FUND, INC.
By: /s/ Jeffrey Altman
-------------------------------
Title: Vice President
INTERMARKET CORP.
By: /s/ Ian R. Mackinzie
-------------------------------
Title: Managing Director
ANGELO, GORDON & CO.
By: /s/ Meryl Buchanan
-------------------------------
Title: Vice President
EMERALD PARTNERS
By: /s/ Michael Gordon
-------------------------------
Title: Authorized Signatory
STROME-SUSSKIND INVESTMENT
MANAGEMENT, L.P.
By: /s/ Jeffrey Susskind
-------------------------------
Title: Vice President
22
