Exhibit 10(B) - Material Contracts
PLEDGE AND SECURITY AGREEMENT, dated as February 1, 1996, by and among
METAL RECOVERY TECHNOLOGIES, INC., a Delaware corporation, having an address at
000 X. 000xx Xxxxxx, Xxxx Xxxxxxx XX 00000 (herein referred to as "MRTI" or
"Debtor"), PLENBRICK, LTD., having an address at The Creche Building, Upper Main
Street, P.O. Box 116 Road Town, Tortola B.V.I., individually and as agent for
certain other parties, and METAL RECOVERY INDUSTRIES (U.S.), INC., a Delaware
corporation, having an address at 000 X. 000xx Xxxxxx, Xxxx Xxxxxxx, XX 00000
(herein referred to as "MRIUS"), and the Secured Parties (as hereinafter
defined) identified on Exhibit A hereto.
WITNESSETH:
WHEREAS, Debtor owns all of the issued and outstanding capital stock of
MRIUS, a Delaware corporation (herein referred to as "MRIUS" or the
"Subsidiary"); and
WHEREAS, the Secured Parties (as hereinafter defined) have made, or have
agreed to make, certain loans to Debtor which are convertible into shares of
common stock of Debtor; and
WHEREAS, Debtor wishes to extend the maturities of such loans; and
WHEREAS, the Secured Parties are concerned about continuing delays in the
completion and operation of the Debtor's dezincification facility located in
East Chicago, Indiana (the "Facility") and desire, as a condition of extending
their loans and the maturities thereof, to be assured as to the timely
completion of the Facility and against changes in the control and management of
Debtor; and
WHEREAS, the Secured Parties also desire that repayment of their loans be
secured; and
WHEREAS, Debtor is willing, in order to induce the Secured Parties (i) to
make or extend loans to Debtor, and (ii) to make loans and extend credit to
Subsidiary, the repayment of which will be guaranteed by Debtor, to grant to the
Collateral Agent (as hereinafter defined), for the PRO RATA benefit of the
Secured Parties, a security interest under the Uniform Commercial Code in all of
Debtor's assets and properties, tangible and intangible, now existing or
hereafter acquired, for the purpose of securing (x) the timely repayment by
Debtor of all such loans and extensions of credit and (y) the full and complete
performance by Debtor of Debtor's obligations under guarantees by Debtor of the
timely repayment of loans and extensions of credit made to Subsidiary; and
WHEREAS, Debtor is also willing to provide certain protections to the
Secured Parties against changes in the control and management of MRIUS; and
WHEREAS, Plenbrick, Ltd. has agreed to hold the Collateral under this
Agreement for itself and as agent for all other Secured Parties (Plenbrick,
Ltd., in such capacity, being herein referred to as the "Collateral Agent"), as
hereinafter set forth;
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants hereinafter set forth and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged and intending to be
legally bound hereby, the parties hereto do hereby agree as follows:
1. LOANS.
(a) The parties whose names and addresses are set forth on Exhibits A
and B have heretofore made loans to MRTI or have agreed to make loans to MRTI.
Exhibit A sets forth the names of parties having made, or having agreed to make,
loans, the respective amounts lent or to be lent, and the maturities, interest
rates and conversion rights with respect thereto. All of the foregoing parties
are hereinafter sometimes referred to as the "Secured Parties." The Secured
Parties have designated Plenbrick, Ltd. as the Collateral Agent hereunder, with
the rights, powers and obligations set forth in this Agreement.
(b) Debtor has requested, and the Secured Parties have agreed, that
the terms of their existing loans or commitments referred to on Exhibit A, shall
be modified as set forth on Exhibit A. In order to induce the Secured Parties
to enter into the loan amendments or modifications described on Exhibit A,
Debtor has agreed to execute and deliver this Agreement, to grant and create
the security interest granted and arising hereunder, and to create certain
rights in favor of the Secured Parties respecting the exchange of indebtedness
of Debtor to the Secured Parties for shares of common stock of MRIUS, all as
more particularly set forth. New promissory notes or other evidences of
indebtedness may be issued to the Secured Parties to evidence the modified terms
of such loans, but the failure to do so shall not affect the validity or
enforceability of the loans as so modified hereby.
(c) The Secured Parties and Debtor hereby agree that, with the
consent of Debtor and of either the Collateral Agent or of Secured Parties at
the time owning a majority in interest of the aggregate principal amount of
indebtedness owed by Debtor to all Secured Parties, parties hereafter making
loans or advances, or renewals thereof, to Debtor may become entitled to the
benefits of this Agreement and in such event shall be deemed to be Secured
Parties hereunder with the same force and effect as though they were Secured
Parties as of the date of this Agreement. The Secured Parties identified on
Exhibit A and all other persons or entities who hereafter make loans or extend
credit to Debtor and become entitled to the benefits of this Agreement are
hereinafter collectively referred to as Secured Parties, and individually as a
Secured Party.
2. RIGHT TO CONVERT LOANS.
In order to induce the Secured Parties to extend, modify or renew their
existing loans to Debtor, or to extend new loans to Debtor or to Subsidiary (the
said loans being herein individually and collectively termed "Indebtedness"),
the Debtor hereby agrees that, in addition to any rights which a Secured Party
may have to convert Indebtedness into common shares of MRTI ("MRTI Shares"), the
Collateral Agent, acting on behalf of the Secured Parties, shall have the
additional rights hereinafter set forth in the event that (i) holders of Class A
Preferred Stock of MRTI exercise, or threaten or purport to exercise, the right
to elect a majority of the directors of MRTI, or (ii) Collateral Agent shall
determine that any litigation now or hereafter pending against Debtor would, if
adversely determined have a material adverse affect on Debtor's financial
condition or business. Following the occurrence of such an event (an "Exchange
Event") and during its continuance, the Collateral Agent, on behalf of the
Secured Parties, shall have a one-time right (the "Exchange Right"), exercisable
by written notice to Debtor, to exchange Indebtedness having an aggregate
principal amount of not less than $2,000,000 for that number of fully-paid and
non-assessable shares of the common stock of MRIUS ("MRIUS Shares") as shall
represent a majority of all then issued and outstanding shares of MRIUS (giving
effect to the issuance of MRIUS Shares hereunder). The Collateral Agent shall
exercise the Exchange Right on behalf of Secured Parties so electing, provided
that Secured Parties owning a majority in principal amount of the Indebtedness,
but not less than $2,000,000, so direct. A Secured Party may not elect to
exercise the Exchange Right as to less than all Indebtedness owned by it.
Exchange of Indebtedness for MRIUS Shares shall be effected by the
Collateral Agent (acting for such purpose as agent for Debtor) causing to be
issued and delivered, free and clear of the security interest created hereby, to
the Secured Parties so electing, the respective number of MRIUS Shares to which
each is entitled, which shall be pro rata to their respective shares of the
total Indebtedness outstanding, calculated as of the date when the Exchange
Right is exercised. The Indebtedness owned by a Secured Party shall be deemed
canceled upon delivery to it of MRIUS Shares hereunder, and the Secured Party
shall so confirm in writing.
Following the occurrence of an Exchange Event, the MRIUS Shares, if not
required to be issued to the Collateral Agent, shall continue to be held in
pledge by the Collateral Agent, upon all of the terms and conditions hereof.
MRTI and Debtor each covenant that they shall, at their sole cost and
expense, take all corporate and other actions, including all necessary filings
with the SEC and any other regulatory authorities, required in order that there
shall be issued to each party hereto the number of MRIUS Exchange Shares to
which such Secured Party is entitled as aforesaid, in consideration of the
cancellation of the Indebtedness. The Collateral Agent, acting on behalf of the
Secured Parties, may enforce the provisions hereof by appropriate action for
equitable relief. MRIUS hereby appoints the Collateral Agent as the agent and
attorney-in-fact of MRIUS, with power of substitution, for purposes of doing all
acts and things, and executing all documents, necessary or convenient to effect
the exercise of the Exchange Right and the transfer of the MRIUS shares into the
names of the Exchange Agent and of the Secured Parties. Such agency shall be
deemed coupled with an interest and irrevocable until payment in full of the
Indebtedness. Debtor shall reimburse the Collateral Agent for all costs and
expenses incurred in enforcing the provisions hereof and the Collateral Agent
shall retain a security interest to secure Debtor's obligations for
reimbursement hereunder.
3. DEBTOR'S GRANT OF SECURITY INTEREST IN COLLATERAL.
Debtor hereby grants to the Collateral Agent, for its benefit and for the
benefit of all of the Secured Parties, as security for the repayment of the
Indebtedness, including all interest due or to become due thereon and of all
other sums payable hereunder and the performance of (a) all obligations of
Debtor under this Agreement (b) the payment and performance of all obligations
arising under and pursuant to any loans or extensions of credit which, by their
terms, are entitled to the benefit hereof and (c) the payment and performance of
all obligations arising under any guarantees by Debtor of loans or extensions of
credit made to Subsidiary which, by their terms, are entitled to the benefits
hereof (all such obligations and indebtedness being herein collectively referred
to as the "Obligations") a security interest in all of the Debtor's right, title
and interest in the following described property (collectively referred to as
the "Collateral"):
(i) (A) All shares of the capital stock of the Subsidiary and of any
other corporations which are subsidiaries of Debtor (the "Pledged
Securities"), together with any additional securities or other property
hereafter issued by way of a dividend or distribution thereon and any
proceeds thereof and any securities issued in exchange for the Pledged
Securities; and
(B) All other proceeds or other distributions in respect of any
or all of the Pledged Securities or any replacements or substitutions
thereto or therefor and all proceeds generated by the sale or disposition
thereof.
(ii) all of Debtor's personal property and fixtures, wherever located,
whether now owned or hereafter acquired or created, including, without
limitation, all of Debtor's right, title and interest in and to the items
and types of property described below and the products and proceeds
thereof:
(A) all accounts, accounts receivable, all rights to receive the
payment of money or other consideration under present or future
contracts or by virtue of services rendered, merchandise sold or
leased, advances made or other consideration given, whether or not
earned by performance and whether or not evidenced by or set forth in
or arising out of any present or future chattel paper, note, draft,
lease, acceptance, writing, bond, insurance policy, instrument,
document or general intangible, and all extensions and renewals of any
thereof, all rights under or arising out of present or future
contracts, agreements or general intangibles, including, without
limitation, all payments under licensing agreements or arrangements,
and all claims for tax refunds, if any, all claims or causes of action
which it may now or hereafter have whether arising in connection with
or under any agreement or document or by operation of law or
otherwise, including, without limitation, all present and future
indebtedness and obligations of any affiliate or subsidiary to it,
including specifically, but without limitation, indebtedness of the
Subsidiary to the Debtor arising pursuant to loans or advances made to
the Subsidiary from the proceeds of the Indebtedness wherever any of
the foregoing may be located and whether the same are owned by the
Debtor on the date hereof or are hereafter acquired or created;
(B) all inventories of every nature, including, without
limitation, all goods held for sale or lease or furnished or to be
furnished under contracts of service, all raw materials, work in
process and finished goods, and all supplies, materials and products
of every nature and description used or usable, consumed or consumable
in connection with the manufacture, packing, shipping, advertising,
selling, leasing or furnishing of such goods and all right, title and
interest in merchandise which gives rise to any or all of the
foregoing, wherever any of the foregoing may be located and whether
the same are owned by the Debtor on the date hereof or are hereafter
acquired or created;
(C) all equipment, machinery, apparatus, chattels, tools, dies,
jigs, molds, parts, machine tools, trucks, automobiles, vehicles,
rolling stock, furniture, furnishings, fixtures and supplies, of every
nature, wherever any of the foregoing may be located and whether the
same are owned by the Debtor on the date hereof or are hereafter
acquired or created, and all additions, accretions and accessories
thereto and substitutions and replacements of any of the foregoing and
all parts and equipment which may be attached to or usable in any way
in connection with or which are necessary for the operation and use of
such personal property wherever any of the foregoing may be located
and whether the same are owned by the Debtor on the date hereof or are
hereafter acquired or created;
(D) all documents and chattel paper, wherever any of the
foregoing may be located and whether the same are owned by the Debtor
on the date hereof or are hereafter acquired or created;
(E) all general intangibles of every nature, including, without
limitation, patents, patent applications, trademarks, licensing
agreements, royalty payments, copyrights, service names, service
marks, logos, goodwill and rights of indemnification, whether the same
are owned by the Debtor on the date hereof or are hereafter acquired
or created;
(F) all books, correspondence, credit files, customer lists,
records and other documents relating to the above-described types of
property, including, without limitation, all tapes,
cards, runs and other papers and documents in the possession or
control of the Debtor, or any affiliate or subsidiary of the Debtor or
any computer service bureau, wherever any of the foregoing may be
located and whether the same are owned by the Debtor on the date
hereof or are hereafter acquired or created;
(G) all rights in, to and under policies of insurance of every
kind and nature covering the Collateral, including, without
limitation, claims or rights to payment and proceeds heretofore or
hereafter arising therefrom with respect to the above-described types
of property, whether the same are owned by the Debtor on the date
hereof or are hereafter acquired or created;
(H) all fixtures;
(I) all rights in and to any proceeds from any condemnation, in
whole or in part, of all or any of the above-described property; and
(J) all proceeds, product, offspring, rents or profits of any or
all of the property described above in clauses (A) through (I) of this
Subsection (ii) and any replacements, additions, accessions or
substitutions thereto or therefor, afteracquired property in respect
thereof and proceeds generated by the sale, casualty loss or
disposition thereof.
The Security interest created hereunder shall be held by the Collateral Agent
for the respective PRO RATA benefit of all parties who are from time to time
Secured Parties hereunder, determined based on the respective principal amounts
of Indebtedness held by all such Secured Parties at any time and from time to
time; and the PRO RATA interests of all such Secured Parties shall be PARI PASSU
in priority of payment.
4. DELIVERY OF PLEDGED SECURITIES.
The Pledged Securities shall be evidenced by certificates, all of which
shall be delivered to and held in the possession of the Collateral Agent or such
other person as the Collateral Agent may designate. In the event that the
Collateral Agent so designates any such person to take possession of the
Pledged Securities, such person shall be entitled to all rights and benefits of
the Collateral Agent contained in this Pledge and Security Agreement, and all
references herein to the "Collateral Agent" shall be deemed to include
references to such other person. Upon delivery to the Collateral Agent, any
Pledged Securities in certificated form shall be in suitable form for transfer
by delivery or shall be accompanied by duly executed instruments of transfer or
assignment in blank, with signatures appropriately guaranteed, all in form and
substance satisfactory to the Collateral Agent. All other property comprising
part of the Collateral shall be accompanied by proper instruments of assignment
duly executed by the Debtor and such other instruments or documents as the
Collateral Agent may reasonably request.
5. WARRANTIES, COVENANTS AND AGREEMENTS OF THE DEBTOR AND THE COOPERATIVE
CORPORATION.
Debtor warrants, covenants and agrees that:
(a) Except for the security interest granted hereby, the Debtor is,
and as to the collateral acquired after the date hereof the Debtor shall
and will be at the time of acquisition, the owner and holder of the
Collateral free from any adverse claim, security interest, encumbrance,
lien, charge, or other right, title or interest of any person other than
the Collateral Agent and covenants that at all times the Collateral will be
and remain free of all such adverse claims, security interests or other
liens or encumbrances; the Debtor has full power and lawful authority to
enter into this Pledge and Security Agreement and to sell, assign and
transfer the Collateral to the Collateral Agent and to grant to the
Collateral Agent a first and prior security interest therein as herein
provided, all of which have been authorized by all necessary corporate
action; the execution and delivery and the performance hereof are not in
contravention of any charter or by-law provision or of any indenture,
agreement or undertaking to which the Debtor is a party or by which its
property or the Pledged Securities are bound; this Pledge and Security
Agreement constitutes the legal, valid and binding obligation of the
Debtor, enforceable in accordance with its terms, subject to bankruptcy,
insolvency, reorganization and other laws of general applicability relating
to or affecting creditors' rights and to general equity principles; and the
Debtor will defend the Collateral against all claims and demands of all
persons at any time claiming the same or any interest therein. Any
officer, agent or
representative acting for or on behalf of the Debtor in connection with
this Pledge and Security Agreement or any aspect hereof, or entering into
or executing this Pledge and Security Agreement on behalf of the Debtor,
has been duly authorized so to do, and is fully empowered to act for and
represent the Debtor in connection with this Pledge and Security Agreement
and all matters related thereto or in connection therewith.
(b) (i) As long as any amount remains unpaid on the Indebtedness,
(a) the Debtor will not enter into or execute any security agreement or any
financing statement covering the Collateral, other than those security
agreements and financing statements in favor of the Collateral Agent
hereunder, and further (b) there will not be on file in any public office
any financing statement or statements (or any documents or papers filed as
such) covering the Collateral, other than financing statements in favor of
the Collateral Agent hereunder, unless in any case the prior written
consent of the Collateral Agent shall have been obtained.
(ii) Debtor hereby authorizes the Collateral Agent to file, in
its discretion, in jurisdictions where this authorization will be given
effect, a financing statement signed only by the Collateral Agent covering
the Collateral, and hereby appoints the Collateral Agent as the Debtor's
attorney-in-fact to sign and file any such financing statements covering
the Collateral. At the request of the Collateral Agent, the Debtor will
join the Collateral Agent in executing such documents as it may determine,
from time to time, to be reasonably necessary or desirable under provisions
of the Indiana Uniform Commercial Code or of any law in any other
jurisdiction which the Collateral Agent deems applicable to the Collateral;
without limiting the generality of the foregoing, the Debtor agrees to join
the Collateral Agent, at its request, in executing one or more financing
statements in form satisfactory to it, and the Debtor will pay the costs of
filing or recording the same, or of filing or recording this Pledge and
Security Agreement, in all public offices at any time and from time to
time, whenever filing or recording of any such financing statement or of
this Pledge and Security Agreement is deemed by the Collateral Agent to be
necessary or desirable. In connection with the foregoing, it is agreed and
understood between the parties hereto (and the Collateral Agent is hereby
authorized to carry out and implement this agreement and understanding and
the Debtor hereby agrees to pay the costs thereof)
that the Collateral Agent may, at any time or times, file as a financing
statement any counterpart, copy or reproduction of this Pledge and Security
Agreement. The Debtor hereby acknowledges that the duties of the Collateral
Agent with respect to the collateral are ministerial in nature and,
notwithstanding anything in this Pledge and Security Agreement to the
contrary, neither the Collateral Agent nor any of its employees, directors,
or agents shall be liable to any party whatsoever in respect of any duties
hereunder absent willful misconduct or gross negligence.
(c) All dividends, payments of interest or principal and other
distributions of every character made upon or in respect of the Collateral
or any part thereof shall be deemed to be Collateral and shall be paid
directly to and shall be held by the Collateral Agent as additional
Collateral pledged under and subject to this Pledge and Security Agreement.
(d) The chief executive offices of and other places of business of
the Debtor are located, and the books and records relating to the
Collateral are located, as of the date hereof, at the address set forth,
and the Debtor will not change any of the same or its name without 30 days'
prior written notice to and consent of the Collateral Agent (which consent
will not be unreasonably withheld);
(e) All Uniform Commercial Code filings required to perfect the
security interest (to the extent perfectable by such filings) of the
Collateral Agent in the Collateral have been made or will be made within
one day of the date hereof, and evidence thereof has been or will be
delivered to the Collateral Agent within seven days of the date received by
Debtor.
6. EVENTS OF DEFAULT.
(a) The occurrence of any one of the following events shall constitute a
default ("Event of Default") by Debtor under this Agreement: (a) if Debtor fails
or neglects to perform, keep or observe any term, provision, condition,
covenant, warranty or representation contained in this Agreement or in the Other
Agreements, which is required to be performed, kept or observed by Debtor; (b)
if the Collateral Agent or any Secured Party demands payment when due under any
note or other evidence of indebtedness representing
indebtedness executed by Debtor, a true copy of which shall have been delivered
to Collateral Agent; (c) if Debtor fails to pay any of Debtor's liabilities,
when due and payable or declared due and payable; (d) if the Collateral or any
other of Debtor's assets are attached, seized, subjected to a writ of distress
warrant, or are levied upon, or become subject to any lien, or come within the
possession of any receiver, trustee, custodian or assignee for the benefit of
creditors; (e) if Debtor or any Guarantor of Debtor's liabilities becomes
insolvent or generally fails to pay, or admits in writing its inability to pay,
debts as they become due, if a petition under Xxxxx 00, Xxxxxx Xxxxxx Code or
any similar law or regulation shall be filed by or against Debtor or if Debtor
shall make an assignment for the benefit of its creditors or if any case or
proceeding is filed by or against Debtor for its dissolution or liquidation or
if Debtor is enjoined, restrained or in any way prevented by court order from
conducting all or any material part of its business affairs; (f) if a notice of
lien, levy or assessment is filed of record or given to Debtor with respect to
all or any of Debtor's assets by any federal, state or local department or
agency; (g) if a contribution failure occurs with respect to any pension plan
maintained by Debtor or any corporation, trades or business that is, along with
Debtor, a member of a controlled group of corporations or controlled group of
tracks or businesses (as described in Section 414(b) and (c) of the Internal
Revenue Code of 1986 or Section 4001, of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA") sufficient to give rise to a lien under
Section 302(f) of ERISA; (h) if Debtor is in default in the payment of any
obligations; indebtedness or other liabilities to any third parties and such
default is declared and is not cured within the time, if any, specified therefor
in any agreement governing the same; (i) the death or incompetency of Debtor, or
the appointment of a conservator for all or any portion of Debtor's assets; (j)
the reasonable insecurity of the Collateral Agent; (k) the failure of Debtor (A)
to complete the Facility on or before April 15, 1996, or (B) to commence active
operations at the Facility on or before May 1, 1996, unless Debtor shall,
immediately upon demand of the Collateral Agent, take all steps necessary and
effective, in the reasonable judgment of the Collateral Agent, forthwith to
remedy the circumstances giving rise to any such failure; or (l) a "change of
control" of Debtor (as hereinafter defined) shall occur; or (m) Collateral Agent
shall determine that any litigation now or hereafter pending against Debtor
would, if adversely determined, have a material adverse affect on debtor's
financial condition or business.
(b) As used herein, the following terms shall have the following meanings:
(i) "Change of Control" shall mean a change in control of a nature
that would be required to be reported by Debtor in response to either (i) Item
5(f) of Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), or (ii) Item 1(a) of a Current
Report on Form 8-K, each as in effect on the date hereof; provided that, without
limitation, a Change in Control shall be deemed to have occurred if, while any
of the Indebtedness is outstanding:
(A) there shall be consummated (i) any consolidation,
merger, or recapitalization of MRTI or any similar transaction involving MRTI,
in which MRTI is not the continuing or surviving corporation or pursuant to
which shares of MRTI's common stock ("Common Stock"), would be converted into
cash, securities or other property, other than a merger of MRTI in which the
holders of MRTI's Common Stock immediately prior to the merger have the same
proportion and ownership of common Stock of the surviving corporation
immediately after the merger, (ii) any sale, lease, exchange or other transfer
(in one transaction or a series of related transactions) of all, or
substantially all, of the assets of MRTI, (iii) the adoption of a plan of
complete liquidation of MRTI (whether or not in connection with the sale of all
or substantially all of MRTI's assets) or a series of partial liquidations of
MRTI that is DE JURE or DE FACTO part of a plan of complete liquidation of MRTI,
or (iv) any other transaction after which Common Stock is no longer to be
publicly traded, provided (x) that the divestiture of less than substantially
all of the assets of MRTI in one transaction or a series of related
transactions, whether effected by sale, lease, exchange, spin-off, sale of the
stock or merger of a subsidiary or otherwise, or (y) a transaction solely for
the purpose of reincorporating MRTI in another jurisdiction, shall not
constitute a Change in Control; (iv) if a majority of the members of the Board
of Directors of MRTI shall consist of persons who were not elected either (A) by
vote of the holders of the requisite number of shares of common stock of MRTI
entitled to vote for the election of directors (i) acting at a meeting called
for such purpose or (ii) acting by written consent, or (B) by the then acting
directors of MRTI; or (v) an Exchange Event of the type defined in clause (i) of
Section 2 hereof shall occur.
(B) any "person" or "group", within the meaning of Sections
13(d) and 14(d) (2) of the Exchange Act, (i) becomes the "beneficial owner" as
defined in Rule 13d-3 under the Exchange Act of 50% or more of the combined
voting power of the then outstanding voting securities of MRTI, otherwise than
through a transaction or transactions arranged by, or consummated with the prior
approval of, the Board of Directors of MRTI, or (ii) acquires by proxy or
otherwise, 50% or more of the combined voting securities of MRTI, granting the
right to vote for the election of directors of MRTI, for any merger or
consolidation of MRTI or for any other matter or question other than through an
arrangement or arrangements consummated with the prior approval of the Board of
Directors of MRTI.
(ii) an "Affiliate" of a specified person shall mean a person who
directly, or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, the person specified.
7. RIGHTS OF THE COLLATERAL AGENT AND THE DEBTOR RELATED TO COLLATERAL.
Upon the occurrence and during the continuance of an Event of Default after
the expiration of any grace period applicable thereto hereunder:
(a) The Collateral Agent shall be entitled to exercise against any
account debtor or obligor, any or all rights, power and remedies of an
obligee under any deferred payment obligation or account, accounts
receivable, note, document, instrument or general intangible constituting
part of the Collateral, including, without limitation, the right to notify
such account debtor or obligor to make all payments under such account,
account receivable, note, document, instrument or general intangible
directly to Collateral Agent and to exercise such other rights and remedies
as are provided for herein, at law, in equity or under the Uniform
Commercial Code, or to restrain from doing so; and shall be entitled to
prosecute any action, suit or proceeding with respect to such accounts,
accounts receivable, documents, instruments or general intangibles, settle,
compromise or release, in whole or in part, any amounts owing on any such
account, account receivable, document, instrument or general intangible or
any property securing the payment of same, make allowances thereon and
adjustments thereto, file proofs of claim with respect thereto and take
such other steps as the Agent, in
its sole and absolute discretion, deems to be necessary in order to realize
thereon, and
(b) shall be entitled to exercise in respect of the Collateral, in
addition to all other rights, powers and remedies specifically provided for
herein, all rights and remedies of a secured party on default under the
Uniform Commercial Code and under any other applicable law as in effect in
any relevant jurisdiction, all without liability except to account for
property actually received by it,
but the Collateral Agent shall have no duty to exercise, and the Secured Parties
shall have no duty to request the exercise of, any of the aforesaid rights,
privileges or options and neither the Collateral Agent nor any Secured Party
shall be responsible for any failure to do so or delay in so doing.
Unless an Event of Default then exists, or unless otherwise provided by the
provisions of the Credit Agreement, the Debtor shall have the right to receive
all income from or dividends (other than dividends arising out of a complete or
partial liquidation of the payor thereto) on or interest or principal payment on
the Collateral, and if the Collateral Agent receives any such income or
dividends or interest or principal payment prior to the occurrence of an Event
of Default, the Collateral Agent shall pay the same promptly to the Debtor,
except that in the case of securities or other property distributed by way of a
dividend or otherwise with respect to the Collateral, such securities or other
property shall be promptly delivered to the Collateral Agent in the manner
described in Section 2 hereof to be held as Pledged Securities or other
Collateral hereunder. Upon the occurrence and during the continuance of an
Event of Default, the Debtor will not demand or receive any income from or
dividends or interest or principal payment on the Collateral, and if the Debtor
receives any such income or interest or principal payment without any demand by
it, the same shall be held by the Debtor in trust for the Collateral Agent in
the same medium in which received, shall not be commingled with any assets of
the Debtor and shall be delivered to the Collateral Agent in the form received,
properly endorsed to permit collection, not later than the next business day
following the day of its receipt. The Collateral Agent may apply the net cash
received from such income or interest or principal payment to payment of the
Obligations, provided that the Collateral Agent shall account for and pay over
to the
Debtor any such income or interest remaining after payment in full of the
Obligations then outstanding.
8. COLLATERAL AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.
The Debtor 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 with full irrevocable power and authority in the
place and stead of the Debtor and in the name of the Debtor 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 Pledge and Security Agreement, to take any and
all appropriate action and, provided that Debtor's obligations are not thereby
enlarged beyond those contained herein or required to protect Collateral Agent's
rights hereunder, to execute any and all document and instruments which may be
necessary or desirable to accomplish the purposes of this Pledge and Security
Agreement. Without limiting the generality of the foregoing, Debtor hereby
gives the Collateral Agent the power and right, on behalf of the Debtor, without
notice to or assent by the Debtor to do the following:
(i) To ask, demand, collect, receive and give acquittances and
receipts for any and all monies due and to become due under any Collateral
and, in the name of the Debtor or its own name, the name of its nominee, or
otherwise, to take possession of and endorse and collect any checks,
drafts, notes, acceptances or other instruments for the payment of monies
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 collection any and all such
monies 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 Pledge
and Security 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 monies due and to become due
thereunder directly to the Collateral Agent or as the Collateral Agent
shall direct;
(B) In addition to other rights provided for herein, to
receive payment of and receipt or any and all monies, claims and other
amounts due and to become due at any time in respect of or arising out of
any Collateral;
(C) To sign and endorse any assignments and notices in
connection with accounts and other documents 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
such Debtor 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 assign, license or, to the extent permitted by an
applicable license, sublicense, whether general, special or otherwise, and
whether on an exclusive or nonexclusive basis any copyright, service xxxx,
patent or trademark owned by the Debtor (along with the goodwill of the
business to which such trademark pertains), throughout the world for such
term or terms, on such conditions, and in such manner, as the Collateral
Agent shall in its reasonable discretion determine; and
(H) Generally to sell, transfer, pledge, make any agreement
with respect to or otherwise deal with any of the Collateral in such manner
as is consistent with the Uniform Commercial Code or applicable law and 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
the Debtor's expense, at any time, or from time to time, all acts and
things which the Collateral Agent deems necessary to protect, preserve or
realize upon the Collateral and the Collateral Agent's security interest
therein, in order to effect the intent of this Pledge and Security
Agreement, all as fully and effectively as the Debtor might do. The
Collateral Agent agrees to forbear from exercising the power granted by the
Debtor under this Section 6 as long as no Event of Default shall have
occurred and be continuing. The Debtor hereby ratifies all that said
attorney-in-fact
shall lawfully and without violation of the rights of any third party do or
cause to be done by virtue hereof. This power of attorney is a power
coupled with an interest and shall be irrevocable until full and
indefeasible payment and satisfaction of the Obligations.
(a) The powers conferred on the Collateral Agent hereunder
are solely to protect its 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
the Debtor for any act or failure to act, except for their own gross
negligence or willful misconduct.
(b) The Debtor also authorizes the Collateral Agent, at any
time from and after the occurrence and during the continuation of an
Event of Default, (i) to communicate in its own name with any party to
any contract, agreement or arrangement to which the Debtor is a party
and which constitutes Collateral with regard to the continuation,
amendment, assignment, notation, discharge or termination thereof and
other matters relating thereto and (ii) to execute, in connection with
any sale provided for in this Pledge and Security Agreement, any
endorsements, assignments or other instruments of conveyance or
transfer with respect to the Collateral.
(c) If the Debtor fails to perform or comply with any of
its agreements contained herein and the same continues after notice of
Collateral Agent's intention to do so, and the Collateral Agent, as
provided for by the terms of this Pledge and Security Agreement, may
itself perform or comply, or otherwise cause performance or
compliance, with such agreement, the expenses of the Collateral Agent
incurred in connection with such performance or compliance (together
with interest thereon from and after the date of payment of such
expenses by the Collateral Agent at the Default Rate (hereinafter
defined) shall be payable by the Debtor to the Collateral Agent on
demand and shall constitute Obligations secured hereby.
9. SPECIAL PROVISIONS FOR PLEDGED SECURITIES, ETC.
The Debtor hereby acknowledges that the sale by the Collateral Agent of any
Pledged Securities pursuant to the terms hereof in compliance with the
Securities Act of 1933 (as now in effect or as hereafter amended), or any
similar stature hereafter adopted with similar purpose or effect (the
"Securities Act"), as well as applicable blue sky or other state securities
laws, may require strict limitations as to the manner in which the Collateral
Agent or any subsequent transferee of the Pledged Securities may dispose of such
securities. The Debtor acknowledges that to the extent the Pledged Securities
are sold in a private sale, the sales price therefor may be less than a sales
price that might have been otherwise obtainable. The Debtor acknowledges the
reasonableness of a sale in such a manner under such circumstances.
10. FURTHER ASSURANCES.
The Debtor agrees to take such actions and to execute such stock or bond
powers and such other or different instruments and writings as the Collateral
Agent may request (and irrevocably authorizes the Collateral Agent to execute
such writings as the Debtor's agent and attorney-in-fact) further to perfect,
confirm and assure the Collateral Agent's security interest in the Collateral
and to assist the Collateral Agent's realization thereon in accordance with the
terms of this Pledge and Security Agreement, including, without limitation the
right to receive, endorse, and collect all instruments made payable to the
Debtor representing any dividend, interest payment or other distribution in
respect of the Collateral or any part thereof.
11. RIGHTS AND REMEDIES OF THE COLLATERAL AGENT UPON DEFAULT.
If an Event of Default shall have occurred and be continuing:
(a) The Collateral Agent shall have and may exercise with reference
to the Collateral and the Obligations, in addition to all other rights, powers
and remedies provided for in this Agreement, any or all of the rights and
remedies of a secured party under the Uniform Commercial Code in effect in the
State of Indiana, and as otherwise granted herein or under any other applicable
law or under any other agreement now or hereafter in effect executed by the
Debtor, including, without limitation, the right and power to sell, at public or
private sale or sales, or otherwise dispose of, or otherwise utilize the
Collateral and any part or parts thereof in any manner authorized or permitted
under said Uniform Commercial Code after default by a debtor, and to apply the
proceeds thereof toward payment of any costs and
expenses and attorney's fees and expenses thereby incurred by the Collateral
Agent and toward payment of the Obligations. Specifically and without limiting
the foregoing, the Collateral Agent shall have the right to take possession of
all or any part of the Collateral or any security therefor and all books,
records, papers and documents of the Debtor or in the Debtor's possession or
control relating to the Collateral which are not already in the Collateral
Agent's possession, and for such purpose may enter upon any premises upon which
any of the Collateral or any security therefor or any of said books, records,
papers and documents are situated and remove the same therefrom without any
liability for trespass or damages thereby occasioned. The Debtor agrees that,
to the extent permitted by law, notice given in the manner provided in Paragraph
hereof at least thirty (30) days before the time of the sale or disposition
of any of the Collateral (or any agreement related thereto) shall be deemed
reasonable and shall fully satisfy any requirement for giving of said notice,
such notice being intended to permit the Debtor an opportunity for it or any of
its designees to bid on and purchase any such Collateral or to otherwise cure
the Event of Default hereunder precipitating such proposed sale or disposition.
The Collateral Agent shall not be obligated to make any sale of Collateral
regardless of notice of sale having been given. The Collateral Agent may
adjourn any public or private sale.
(b) The Collateral Agent or its nominee or nominees shall have the
sole and exclusive right (but not obligation) to exercise all voting and
consensual powers pertaining to the Collateral or any part thereof and may
exercise such powers in such manner as the Collateral Agent may elect.
(c) All dividends, payments of interest or principal and other
distributions of every character made upon or in respect of the Collateral or
any part thereof shall be deemed to be Collateral and shall be paid directly to
and shall be held by the Collateral Agent as additional Collateral pledged under
and subject to this Pledge and Security Agreement.
(d) All rights to marshaling assets of the Debtor, including any such
right with respect to the Collateral, are hereby waived by the Debtor.
(e) All recitals in any instrument of assignment or any other
instrument executed by the Collateral Agent incident to sale, transfer,
assignment or other disposition of the Collateral or any part thereof hereunder
shall be full proof of the matters stated therein and no other proof shall be
requisite to establish full legal propriety of the sale or other action taken by
the Collateral Agent or of any fact, condition or thing incident thereto and all
prerequisites of such sale or other action or of any fact, condition or thing
incident thereto shall be presumed conclusively to have been performed or to
have occurred.
So long as no Event of Default shall have occurred and be continuing:
(a) The Debtor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Pledged Securities or any part thereof
for any purpose not inconsistent with the terms of this Pledge and Security
Agreement; and
(b) The Collateral Agent shall execute and deliver (or cause to be
executed and delivered) to the Debtor all such proxies and other instruments as
the Debtor may reasonably request for the purpose of enabling the Debtor to
exercise the voting and other rights which it is entitled to exercise pursuant
to this Paragraph 9.
12. USURY, ETC.
Nothing in this Agreement or in any agreement governing or
applicable to the Indebtedness between any Secured Party and the Debtor shall
require the Debtor to pay, or the Collateral Agent to accept, interest in an
amount which would exceed the maximum rate permitted under applicable law or
which would subject the Collateral Agent to any penalty or forfeiture under
applicable law. In the event that the payment of any charges, fees or other
sums due hereunder or under any such other agreement, which are held to be in
the nature of interest would subject the Collateral Agent to any penalty or
forfeiture under applicable law, then, IPSO FACTO, the obligations of Debtor or
the Debtor to make such payment shall be reduced to the highest rate authorized
under applicable law. Should the Collateral Agent receive any payment which is
or would be in excess of the highest rate authorized under law, such payment
shall have been, and shall be deemed to have been, made in
error, and shall automatically be applied to reduce the outstanding principal
balance of the Indebtedness.
13. RIGHT TO ASSIGN.
The Collateral Agent has the right to assign this Agreement and the
Collateral Agent's security interest in the Collateral without consent of
Debtor.
14. NO RIGHT TO REDEEM.
Debtor shall have no right to redeem the Collateral after a sale, and
Debtor absolutely and irrevocably specifically waives and releases any such
right.
15. REPAYMENT OF EXPENSES.
The Collateral Agent has the right, upon a default hereunder, to make
payments on Debtor's behalf or to take any action needed to protect the
Collateral or to defend any of the Collateral Agent's rights under this
Agreement. If Collateral Agent makes any payments or incurs any expenses in
taking such action, which may include reasonable attorney's fees, the Debtor
shall repay the Collateral Agent with interest at the lesser of (i) the maximum
rate of interest which can lawfully be charged to Debtor and (ii) the rate of
15% per annum (the "Default Rate"). Debtor shall be obligated to repay to
Collateral Agent upon demand all such payments and expenses, and the obligation
to do so shall constitute additional obligations ("Obligations") hereunder,
repayable to Collateral Agent from the proceeds of any sale of the Collateral.
If the principal balance of the Indebtedness or any other Obligation is not paid
when due, whether at maturity or by acceleration after a default or otherwise
the outstanding balance shall bear interest from the due date to the date of
payment at the Default Rate.
16. APPLICATION OF PROCEEDS BY THE COLLATERAL AGENT.
In the event the Collateral Agent sells or otherwise disposes of the
Collateral in the course of exercising the remedies provided herein, any amounts
held, realized or received by the Collateral Agent pursuant to the provisions
hereof, including the proceeds of the sale of any of the Collateral or any part
thereof, shall be applied by the Collateral Agent, FIRST, toward the payment of
any costs and expenses incurred by the Collateral Agent in
enforcing this Pledge and Security Agreement, in realizing on or protecting any
Collateral and in enforcing or collecting the Obligations, including, without
limitation, the reasonable attorneys' fees and expenses incurred by the
Collateral Agent, all of which costs and expenses are secured by the Collateral
and all of which costs and expenses the Debtor agrees to pay; SECOND, to all
accrued and unpaid interest on the Indebtedness; THIRD, to the unpaid principal
of the Indebtedness; FOURTH, to any other unpaid Obligations; and, FIFTH, to the
Debtor or to whomsoever may be lawfully entitled to receive the same or as a
court of competent jurisdiction may direct. Any amounts and any Collateral
remaining after such application and after payment to the Collateral Agents of
all of the Obligations in full shall be paid or delivered to the Debtor, its
successor or assigns, or as a court of competent jurisdiction may direct.
The Collateral Agent shall be deemed to have exercised reasonable care in
the custody and preservation of the Collateral in its possession if the
Collateral is accorded treatment substantially equal to that which the
Collateral Agent accords its own property, it being understood, without
limitation that the Collateral Agent shall not have any responsibility for
taking any necessary steps to preserve rights against any parties with respect
to any Collateral.
17. ABSOLUTE INTEREST.
(a) All rights of the Collateral Agent hereunder, and all obligations
of the Debtor hereunder, shall be absolute and unconditional irrespective of (i)
any lack of validity or enforceability of any agreement with respect to the
Indebtedness; (ii) any change in the time, manner or place of payment of or in
any other term of, any payment required hereby or by any promissory note
evidencing the Indebtedness or any part thereof, or any other amendment or
waiver of or any consent to any departure from any agreement or instrument;
(iii) any exchange, release or non-perfection of any Collateral, or any release
or amendment or waiver of or any consent to or departure from, any guarantee for
all or part of the Obligation; (iv) any other circumstance which might
constitute a defense available to, or a discharge of, the Debtor or the Debtor
in respect of the Indebtedness or any part thereof or this Pledge and Security
Agreement.
(b) This Pledge and Security Agreement shall not be construed as
relieving the Debtor from full liability on the Obligations and for any
deficiency thereon.
(c) The Collateral Agent is hereby subrogated to all of the Debtor's
interests, rights and remedies in respect to the Collateral and all security now
or hereafter existing with respect thereto and all guaranties and endorsement
thereof and with respect thereto, but only to the extent necessary to satisfy
the Obligations in accordance with the terms of this Pledge and Security
Agreement.
18. ADDITIONAL INFORMATION.
The Debtor agrees to furnish the Collateral Agent from time to time with
such additional information and copies of such documents relating to this Pledge
and Security Agreement, the Collateral, the Obligations and their respective
financial condition as the Collateral Agent may reasonably request, and upon
request, to certify the amount of the Indebtedness at the time outstanding,
including both interest and principal.
19. NOTICES.
Any communication, notice or demand to be given hereunder shall be duly
given if delivered or mailed by certified or registered mail at the applicable
address set forth on the first page of this Pledge and Security Agreement, or
such other address as shall be designated by any party hereto to the other
parties hereto in a written notice delivered in accordance with the terms
hereof.
20. INDEMNITY AND EXPENSES.
The Debtor agrees to indemnify the Collateral Agent, the Secured Parties
and their officers, directors and employees from and against any and all claims,
losses and liabilities growing out of or resulting from this Pledge and Security
Agreement (including, without limitation, enforcement of this Pledge and
Security Agreement and all claims and demands of all persons at any time
claiming the Collateral or any interest therein), except claims, losses or
liabilities resulting from the Collateral Agent's or its officers', directors',
or employees' or agents gross negligence or willful misconduct. The Debtor
agrees to pay on demand all out-of-pocket expenses (including the reasonable
fees and expenses of the Collateral Agent or its officers, directors, employees,
counsel, or agents) relating to the enforcement or protection of the rights of
the Collateral Agent or the Secured Parties hereunder, and further agrees that
the Collateral secures such payment.
21. NO WAIVER; CUMULATIVE RIGHTS.
No failure on the part of Collateral Agent to exercise, and no delay in
exercising any right, remedy or power hereunder shall operate as a waiver
thereof, nor shall any single or partial exercise by the Collateral Agent of any
right, remedy or power hereunder preclude any other or future exercise of any
other right, remedy or power. Each and every right, remedy and power hereby
granted to the Collateral Agent or allowed it by law or other agreement shall be
cumulative and not exclusive of any other, and may be exercised by the
Collateral Agent from time to time.
22. GOVERNING LAW.
This Pledge and Security Agreement and the rights and obligations of the
parties hereunder shall be governed by, and construed in accordance with, the
internal laws of the State of New York except as otherwise specifically provided
herein.
23. TERMINATION.
This Pledge and Security Agreement shall terminate upon the repayment in
full of the Obligations (which term shall include, without limitation, the
Indebtedness) at which time the Collateral Agent shall reassign and deliver to
the Debtor such of the Collateral (if any) as shall not have been sold or
otherwise applies pursuant to the terms hereof and shall still be held by it
hereunder, together with appropriate instruments of reassignment and release.
24. EXECUTION IN COUNTERPARTS.
This Pledge and Security Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
25. DEFINITIONS.
All non-capitalized terms used herein which are defined in the Uniform
Commercial Code of the State of Indiana shall have the meanings ascribed thereto
herein.
26. SUCCESSORS AND ASSIGNS.
This Pledge and Security Agreement shall inure to the benefit of any
successors and assigns of the Secured Parties and the Collateral Agent.
27. RIGHTS OF THE COLLATERAL AGENT.
(a) The Collateral Agent shall have no duties or responsibilities except
those expressly set forth in this Pledge and Security Agreement. The Collateral
Agent shall not have by reason of this Agreement a fiduciary relationship in
respect of Debtor or and Secured Party and nothing in this Agreement, expressed
or implied, is intended to or shall be construed as to impose upon the
Collateral Agent any obligations in respect of this Pledge and Security
Agreement except as expressly set forth herein.
(b) The collateral Agent shall not be responsible to any Secured Party for
any recitals, statements, information, representations or warranties herein or
in any agreement, document, certificate or a statement delivered in connection
herewith or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this Pledge and Security
Agreement, or be required to make any inquiry concerning either the performance
or observance of any of the terms, provisions or conditions of this Pledge and
Security Agreement, or the existence of any Event of Default or any condition,
event or act which, with notice or lapse of time or both, would constitute such
and Event of Default. The Collateral Agent may resign on thirty days' written
notice to each of the Secured Parties (a copy of which notice shall be provided
to Debtor but shall not be a condition to resignation) and upon such resignation
Secured Parties holding a majority of the outstanding principal amount of the
Indebtedness (the "Required Secured Parties") will designate a successor
Collateral Agent.
(c) If the Collateral Agent shall request instructions from the Secured
Parties with respect to any act or action (including failure to act) in
connection with this Agreement, the Collateral Agent shall be entitled to
refrain from such act or taking such action unless and until the Collateral
Agent shall have received instructions from the Required Secured Parties; and
the Collateral Agent shall not incur liability to any person by reason of so
refraining. Without limiting the foregoing, no Secured Party shall have any
right of action whatsoever against the Collateral Agent as a result of its
acting or refraining from acting hereunder in accordance with the instructions
of the Required Secured Parties.
(d) The Collateral Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, order or other
document or telephone message believed by it to be genuine and correct and to
have been signed, sent or made by the proper person or entity, and, with
respect to all legal matters pertaining to this Pledge and Security Agreement
and its duties hereunder, upon advice of counsel selected by it (including,
without limitation, special counsel to the Collateral Agent).
(e) To the extent the Collateral Agent is not reimbursed and indemnified
by the Debtor, the Secured Parties will reimburse and indemnify the Collateral
Agent in proportion to the outstanding amounts of the Notes held by them, for
and against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder, or in any way relating to
or arising out of this Pledge and Security Agreement; provided that no Secured
Party shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Collateral Agent's gross negligence or willful misconduct.
(f) With respect to the rights of the Collateral Agent as a holder of
Indebtedness and of any note issued to Debtor by the Collateral Agent, the
Collateral Agent shall have the same rights and powers hereunder as any other
Secured Party and as if it were not performing the duties as Collateral
Agent specified herein; and the terms "Secured Party" or "holders of
Indebtedness" or any similar terms shall, unless the context clearly otherwise
indicates, include the Collateral Agent in its individual capacity.
IN WITNESS WHEREOF, the parties have caused this Pledge and Security
Agreement to be duly executed as of the date first above written.
METAL RECOVERY TECHNOLOGIES, INC.
BY: /S/
-----------------------------
TITLE:
ADDRESS:
PLENBRICK, LTD., as
Collateral Agent and in its
individual capacity
BY: /S/
-----------------------------
TITLE:
ADDRESS:
METAL RECOVERY INDUSTRIES
(U.S.), INC.
BY: /S/
-----------------------------
TITLE:
ADDRESS:
ALCARIA, LTD.
BY: /S/
----------------------------
TITLE:
ADDRESS:
ANTHEMIS, LTD.
BY: /S/
----------------------------
TITLE:
ADDRESS:
XXXXXXXXX LTD.
BY: /S/
----------------------------
TITLE:
ADDRESS:
SUNDORNE HOLDINGS S.A.
BY: /S/
----------------------------
TITLE:
ADDRESS:
SOVEREIGN TRUST SERVICES, LTD.
BY: /S/
----------------------------
TITLE:
ADDRESS:
OSBOURNE LTD.
BY: /S/
----------------------------
TITLE:
ADDRESS:
EXHIBIT A
To be Present Interest Conversion
Lender Loaned Loaned Maturity Rate Price
------ ------ ------ -------- -------- ----------
Alcaria, Ltd. $250,000 2/28/97 10% $0.25
Anthemis, Ltd. $250,000 12/31/96 10% $0.25
Xxxxxxxxx Ltd. $250,000 2/28/97 10% $0.25
Sundorne
Holdings S.A. $650,000 6/30/96
Sovereign Trust
Services, Ltd. $116,523 9/30/96
Osbourne Ltd. $200,000 10/31/96
Plenbrick,
Ltd. $550,000 11/30/96
All loans have been extended so as to mature March 31, 1997
