Exhibit 10.1
LIQUIDATING TRUST AGREEMENT
This Liquidating Trust Agreement (the "Trust Agreement"), dated as of
December 31, 2003 by and among HIGH SPEED ACCESS CORP., a Delaware corporation
(the "Company"), and XXXX X. XXXXXXX, an individual resident of the Commonwealth
of Kentucky (the "Trustee" or "Liquidating Trustee"), executed in connection
with the Company's Plan of Dissolution and Liquidation dated November 25, 2002
(as amended, modified and supplemented from time to time, the "Plan").
Capitalized terms used in this Trust Agreement and not otherwise defined herein
shall have the meanings ascribed to them in the Plan.
W I T N E S S E T H
WHEREAS, the Company has elected to wind up its affairs and
liquidate in accordance with the Plan recommended by its Board of Directors and
approved by the stockholders of the Company on November 25, 2002;
WHEREAS, the Plan provides for the sale of substantially all of the
Company's assets, other than, among other things, the Liquidating Trust Assets
(defined below);
WHEREAS, the Liquidating Trust is created pursuant to, and to
effectuate certain provisions of, the Plan and to hold the Liquidating Trust
Assets;
WHEREAS, the Liquidating Trust is intended to qualify as a
liquidating trust within the meaning of Treasury Regulations Section
301.7701-4(d); and
WHEREAS, the Liquidating Trust is established for the sole purpose
of liquidating its assets for the benefit of the stockholders of the Company as
of December 31, 2003 (collectively, the "Beneficiaries"), in accordance with
Treasury Regulations Section 301.7701-4(d), with no objective or authority to
continue or engage in the conduct of a trade or business except to the extent
reasonably necessary to, and consistent with, the liquidating purpose of this
Liquidation Trust and the Plan;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Plan, the Company and the
Liquidating Trustee agree as follows:
ARTICLE 1
ESTABLISHMENT OF THE LIQUIDATING TRUST
1.1 Establishment of Liquidated Trust. Pursuant to the Plan, the Company
and the Liquidating Trustee hereby establish the Liquidating Trust on behalf of
the Beneficiaries. The
Liquidating Trustee agrees to accept and hold the Liquidating Trust Assets in
trust for the Beneficiaries subject to the terms of this Trust Agreement.
1.2 Purpose of the Liquidating Trust. The Liquidating Trust shall be
established for the sole purpose of liquidating the Liquidating Trust Assets in
accordance with Treasury Regulations Section 301.7701-4(d), with no objective to
continue or engage in the conduct of a trade or business. Accordingly, the
Liquidating Trustee shall, in an expeditious but orderly manner, liquidate and
convert to Cash the Liquidating Trust Assets, settle or otherwise pay any
liabilities of or claims against the Liquidating Trust Assets, make a Final
Liquidation Payment to Beneficiaries upon completion of the statutory period for
the dissolution on the Company under Delaware law, and otherwise settle the
affairs of the Company and distribute any remaining Liquidating Trust Assets in
accordance with the Plan.
1.3 Transfer of Assets and Rights to the Liquidating Trustee.
(a) As of 11:59:59 A.M., Eastern Standard Time, December 31, 2003
(the "Effective Time and Date"), the Company hereby transfers, assigns, and
delivers to the Liquidating Trustee, (i) all of its right, title, and interest
in the Liquidating Trust Assets free and clear of any lien or Claim in such
property of any other Person or entity except as otherwise provided in the Plan,
(ii) all of their rights with respect to the Liquidating Trust Assets including
attorney-client privilege and work product and hereby waive their right and the
right of any legal, financial or other advisors to assert such rights as a
defense or otherwise, and the Liquidating Trustee hereby assumes and agrees that
all such Liquidating Trust Assets will be transferred to the Liquidating Trust
free and clear of any and all liabilities except to the extent otherwise
provided in the Plan.
(b) On or prior to the Effective Time and Date, the Company shall
deliver or cause to be delivered to the Liquidating Trustee any and all
documents required in connection with the administration of any known or
existing Claims (including those maintained in electronic format and original
documents) whether held by the Company, their agents, advisors, attorneys,
accountants or any other professional hired by the Company and provide access to
such employees of the Company, their agents, advisors, attorneys, accountants or
any other professional hired by the Company with knowledge of matters relevant
to the Claims.
(c) At any time and from time to time on and after the Effective
Time and Date, the Company agrees (i) at the reasonable request of the
Liquidating Trustee to execute and deliver any instruments, documents, books,
and records (including those maintained in electronic format and original
documents as may be needed), and (ii) take, or cause to be taken, all such
further action as the Liquidating Trustee may reasonably request in order to
evidence or effectuate the transfer of the Liquidating Trust Assets to the
Liquidating Trust and consummation of the transactions contemplated hereby and
by the Plan and to otherwise carry out the intent of the parties hereunder and
under the Plan.
1.4 Title to Liquidating Trust Assets.
(a) The transfer of the Liquidating Trust Assets to the Liquidating
Trust shall be made by the Company for the benefit and on behalf of the
Beneficiaries. In this regard, the
Liquidating Trust Assets will be treated for tax purposes as being transferred
by the Company to the Beneficiaries, and then by such holders to the Liquidating
Trust in exchange for interests in the Liquidating Trust (the "Liquidating Trust
Interests") for the benefit of such Beneficiaries in accordance with the Plan.
Upon the transfer of the Liquidating Trust Assets, the Liquidating Trustee shall
succeed to all of the Company' right, title and interest in the Liquidating
Trust Assets and the Company will have no further interest in or with respect to
the Liquidating Trust Assets or this Liquidating Trust.
(b) For all federal income tax purposes, all parties (including,
without limitation, the Company, the Liquidating Trustee, and the Beneficiaries)
shall treat the transfer of Liquidating Trust Assets to the Liquidating Trust,
as set forth in this Section 1.4 and in accordance with the Plan, as a transfer
to the Beneficiaries, followed by a transfer by such Beneficiaries to the
Liquidating Trust, and the Beneficiaries of this Liquidating Trust shall be
treated as the grantors and owners hereof.
1.5 Reliance. The Liquidating Trustee may rely upon the Company's filed
schedules and statements of financial affairs and all other information provided
by the Company or its representatives to the Liquidating Trustee concerning
Claims filed against the Company, and its reconciliation and documents
supporting such reconciliation.
1.6 Governance of the Liquidating Trust. The Liquidating Trust shall be
governed by the Liquidating Trustee. The Liquidating Trustee's powers are
exercisable solely in a fiduciary capacity consistent with, and in furtherance
of, the purposes of this Liquidating Trust and not otherwise.
1.7 Funding of the Liquidating Trust. The Liquidating Trustee may from
time to time make withdrawals from the Liquidating Trust Assets in amounts and
at times that the Liquidating Trustee, in its sole discretion, deems necessary
or appropriate to fund any and all costs and expenses that the Liquidating
Trustee and the Liquidating Trust incur subsequent to the Effective Time and
Date in accordance with this Trust Agreement and the Plan.
ARTICLE 2
LIQUIDATING TRUST BENEFICIARIES
2.1 Identification of Beneficiaries of Liquidating Trust. The
Beneficiaries of the Liquidating Trust are the holders of the Liquidating Trust
Interests and shall be recorded and set forth in a register maintained by the
Liquidating Trustee expressly for such purpose. All references in this Trust
Agreement to the Beneficiaries or the holders of Liquidating Trust Interests
shall be read to mean holders of record as set forth in the official register
maintained by the Liquidating Trustee and shall not mean any beneficial owner
not recorded on such official registry. Unless expressly provided herein, the
Liquidating Trustee may establish a record date that it deems practicable for
determining the Beneficiaries for a particular purpose. The distribution of
Liquidating Trust Interests to the Beneficiaries shall be accomplished as set
forth in the Plan.
2.2 Allocation of Beneficial Interests. Each holder of the common capital
stock of the Company on the record date established by the Liquidating Trustee
(which shall be the close of business on December 31, 2003) is hereby allocated
a proportional beneficial share and interest in the Liquidating Trust, subject
to any liabilities of and claims against their ratable portion thereof.
2.3 Transferability of Liquidating Trust Interests. The Liquidating Trust
Interests shall not be transferable, provided that the Liquidating Trust
Interests shall be assignable or transferable by will, intestate succession, or
operation of law and that the executor or administrator of the estate of a
holder of a Liquidating Trust Interest may mortgage, pledge, grant a security
interest in, hypothecate or otherwise encumber, the Liquidating Trust Interests
held by the estate of such holder if necessary in order to borrow money to pay
estate, succession or inheritance taxes or the expenses of administering the
estate of the holder, upon written notice to, and written consent of, the
Liquidating Trustee, which consent may not be unreasonably withheld.
2.4 Distribution; Withholding. In the discretion of the Liquidating
Trustee and subject to the withholding of property on account of Claims pursuant
to the provisions of Article 5 hereof, the Liquidating Trustee shall distribute
from the Liquidating Trust to each holder of a Liquidating Trust Interest Cash
on hand (including, without limitation, all net Cash income plus all net Cash
proceeds from the liquidation of Liquidating Trust Assets, including, without
limitation, as Cash for this purpose, all permissible investments described in
Section 3.12 below) pro rata in proportion to such holders' respective
Liquidating Trust Interests; provided, however, that the Liquidating Trustee
shall not be required to make any distributions prior the Final Liquidating
Payment on or before December 31, 2005 upon expiration of the Company's
statutory period for dissolution under Delaware law. Notwithstanding anything to
the contrary herein, prior to making any distribution to holders of Liquidating
Trust Interests, the Liquidating Trustee may retain such amounts (i) as are
reasonably necessary to meet contingent liabilities and to maintain the value of
the Liquidating Trust Assets during liquidation, (ii) to pay reasonable
estimated expenses (including, without limitation, any taxes imposed on the
Liquidating Trust or in respect of the Liquidating Trust Assets), and (iii) to
satisfy other liabilities incurred or assumed by the Liquidating Trust (or to
which the Liquidating Trust Assets are otherwise subject), all for the term of
the Liquidating Trust and in accordance with this Trust Agreement and the Plan.
The Liquidating Trustee may withhold from amounts distributable to any Person
any and all amounts, determined in the Liquidating Trustee's reasonable sole
discretion, required by any law, regulation, rule, ruling, directive or other
governmental requirement.
2.5 Manner of Payment or Distribution. All Distributions made by the
Liquidating Trustee to holders of Liquidating Trust Interests shall be payable
to the holders of Liquidating Trust Interests of record as of the 10th day prior
to the date scheduled for the distribution, unless such day is not a Business
Day, then such day shall be the following Business Day (the "Record Date"). If
the Distribution shall be in Cash, the Liquidating Trustee shall distribute such
Cash by wire, check, or such other method as the Liquidating Trustee deems
appropriate under the circumstances.
ARTICLE 3
THE LIQUIDATING TRUSTEE
3.1 Role of the Liquidating Trustee. In furtherance of and consistent with
the purpose of the Liquidating Trust and the Plan the Liquidating Trustee shall,
for the benefit of the Beneficiaries, (i) have the power and authority to hold,
manage, and distribute the liquidating Trust Assets, and (ii) have the power and
authority to hold, manage, and distribute the Cash or non - Cash Liquidating
Trust Assets obtained through the exercise of its power and authority. In all
circumstances, the Liquidating Trustee shall act in the best interests of all
Beneficiaries of the Liquidating Trust and in furtherance of the purpose of the
Liquidating Trust.
3.2 Authority of Liquidation Trustee. In connection with the
administration of the Liquidating Trust, except as set forth in this Trust
Agreement, the Liquidating Trustee is authorized to perform any and all acts
necessary or desirable to accomplish the purposes of the Liquidating Trust.
Without limiting, but subject to, the express purpose of the Liquidating Trustee
and to Section 3.3 hereof, the Liquidating Trustee shall be expressly
authorized, but shall not be required, to:
(a) hold legal title to any and all rights of the holders of the
Liquidating Trust Interests in or arising from the Liquidating Trust Assets,
including, without limitation, collecting, receiving any and all money and other
property belonging to the Liquidating Trust;
(b) protect and enforce the rights to the Liquidating Trust Assets
by any method deemed appropriate including, without limitation, by judicial
proceedings or pursuant to any applicable bankruptcy, insolvency, moratorium or
similar law and general principles of equity;
(c) borrow funds, incur or assume liabilities, and pledge
Liquidating Trust Assets on behalf of the Liquidating Trust in furtherance of or
in connection with the Liquidating Trustee's or the Liquidating Trust's duties,
powers, authority, and obligations under this Trust Agreement, and determine and
satisfy any and all liabilities created, incurred or assumed by the Liquidating
Trust;
(d) file, if necessary, any and all tax and information returns with
respect to the Liquidating Trust and pay taxes, if any, properly payable by the
Liquidating Trust;
(e) pay all expenses and make all other payments relating to the
Liquidating Trust Assets;
(f) obtain reasonable insurance coverage with respect to its
liabilities and obligations as Liquidating Trustee under this Trust Agreement
(in the form of an errors and omissions policy or otherwise);
(g) obtain insurance coverage with respect to real and personal
property that may become Liquidating Trust Assets, if any;
(h) retain and pay such counsel and other professionals as the
Liquidating Trustee in its sole discretion may select to assist the Liquidating
Trustee in its duties, on such terms as the Liquidating Trustee deems
appropriate. The Liquidating Trustee may commit the Liquidating Trust to and
shall pay such counsel and other professionals reasonable compensation for
services rendered and expenses incurred. A law firm or professional shall not be
disqualified from serving the Liquidating Trustee solely because of its current
or prior retention as counsel or professional to the Company;
(i) retain and pay an independent public accounting firm to perform
such reviews and/or audits of the financial books and records of the Liquidating
Trust and the Contingency Reserve as may be appropriate in the Liquidating
Trustee's sole discretion and to prepare and file any tax returns or
informational returns for the Liquidating Trust and the Liquidating Trust
Disputed Claims Reserve as may be required. The Liquidating Trustee may commit
the Liquidating Trust to and shall pay such independent public accounting firm
reasonable compensation for services rendered and expenses incurred;
(j) retain and pay such third parties as the Liquidating Trustee, in
its sole discretion, may deem necessary or appropriate to assist the Liquidating
Trustee in carrying out its powers and duties under this Trust Agreement. The
Liquidating Trustee may commit the Liquidating Trust to and shall pay all such
persons or entities reasonable compensation for services rendered and expenses
incurred, as well as commit the Liquidating Trust to indemnify any such parties
in connection with the performance of services;
(k) employ such employees as the Liquidating Trustee, in his sole
discretion and as consistent with the purposes of the Liquidating Trust, may
deem necessary or appropriate to assist the Liquidating Trustee in carrying out
its powers and duties under this Trust Agreement. The Liquidating Trustee may
commit the Liquidating Trust to and shall pay all such employees reasonable
salary in the amounts it shall determine to be appropriate and any employee
benefits it may establish pursuant to Section 3.2(l) below. If the Liquidating
Trustee employs employees pursuant to this Section 3.2(k), the Liquidating
Trustee shall establish payroll procedures and pay any and all federal, state or
local tax withholding required under applicable law with respect to any such
employees, and it will take all other actions it deems necessary to effectuate
the provisions of this Section 3.2(k);
(l) establish and adopt or cease to provide such employee benefits
for the benefit of any employees described in Section 3.2(k) above as the
Liquidating Trustee, in its sole discretion and as consistent with the purposes
of the Liquidating Trust, may deem necessary or appropriate, including, without
limitation, the adoption of any group health plan;
(m) assert or waive any privilege or defense on behalf of the
Liquidating Trust or, with respect to the Liquidating Trust Assets, the Company;
(n) compromise, adjust, arbitrate, xxx on or defend, pursue,
prosecute abandon, exercise rights, powers, and privileges with respect to, or
otherwise deal with and
settle, in accordance with the terms set forth herein, Claims and all causes of
action in favor of or against the Liquidating Trust as the Liquidating Trustee
shall deem advisable;
(o) execute offsets and assert counterclaims against Claims in
connection with the Liquidating Trust Assets;
(p) in his sole discretion (subject to Section 2.4 hereof and this
Section 3.2), take all appropriate action with respect to the Liquidating Trust
Assets consistent with the purpose of the Liquidating Trust, including without
limitation the avoidance of any transfer or obligation, and the filing,
prosecution, settlement or other resolution of claims and causes of action,
including without limitation those based upon Sections 510, 542-550, or 553(b)
of the Bankruptcy Code;
(q) invest any moneys held as part of the Liquidating Trust in
accordance with the terms of Section 3.12 hereof, limited, however, to such
investments that are consistent with the Liquidating Trust's status as a
liquidating trust within the meaning of Treasury Regulations Section
301.7701-4(d);
(r) request any appropriate tax determination with respect to the
Liquidating Trust;
(s) establish and maintain a website for the purpose of providing
notice of Liquidating Trust activities in lieu of sending written notice to
holders of Liquidating Trust Interests, subject to providing notice of such
website to such holders; and
(t) take or refrain from taking any and all actions the Liquidating
Trustee reasonably deems necessary or convenient for the continuation,
protection and maximization of the Liquidating Trust Assets or to carry out the
purposes hereof.
3.3 Limitation of Liquidating Trustee's Authority.
(a) Notwithstanding anything herein to the contrary, the Liquidating
Trustee shall not be authorized to engage in any trade or business, and shall
not take such actions inconsistent with the orderly liquidation of the
Liquidating Trust Assets as are required or contemplated by applicable law, the
Plan and this Trust Agreement.
(b) The Liquidating Trust shall not hold 50% or more of the stock
(in either vote or value) of any entity that is treated as a corporation for
federal income tax purposes, nor be the sole member of a limited liability
company, nor have any interest in an entity that is treated as a partnership for
federal income tax purposes, unless such stock, membership interest, or
partnership interest was obtained involuntarily or as a matter of practical
economic necessity in order to preserve the value of the Liquidating Trust
Assets.
3.4 Books and Records. The Liquidating Trustee shall maintain in respect
of the Liquidating Trust and the holders of Liquidating Trust Interests books
and records relating to the Liquidating Trust Assets and income of the
Liquidating Trust and the payment of expenses of,
and liabilities of claims against or assumed by, the Liquidating Trust in such
detail and for such period of time as may be necessary to enable it to make full
and proper accounting in respect thereof. Such books and records shall be
maintained on a modified cash or other comprehensive basis of accounting
necessary to facilitate compliance with the tax reporting requirements of the
Liquidating Trust. Except as otherwise may be expressly provided in this Trust
Agreement, nothing in this Trust Agreement requires the Liquidating Trustee to
file any accounting or seek approval of any court with respect to the
administration of the Liquidating Trust, or as a condition for managing any
payment or distribution out of the Liquidating Trust Assets.
3.5 Additional Powers. Except as otherwise set forth in this Trust
Agreement or in the Plan, and subject to the Treasury Regulations governing
liquidating trusts and the retained jurisdiction of the Delaware Chancery Court
as provided for in the Plan, but without prior or further authorization, the
Liquidating Trustee may control and exercise authority over the Liquidating
Trust Assets and over the protection, conservation and disposition thereof. No
Person dealing with the Liquidating Trust shall be obligated to inquire into the
authority of the Liquidating Trustee in connection with the protection,
conservation or disposition of the Liquidating Trust Assets.
3.6 Tax and Reporting Duties of the Liquidating Trustee. The Liquidating
Trustee shall be responsible for all tax and other matters as set forth in
Article 4.
3.7 Compliance with Laws. Any and all distributions of Liquidating Trust
Assets and proceeds of borrowings, if any, shall be in compliance with
applicable laws, including, without limitation, applicable federal and state
securities laws.
3.8 Costs and Expenses of the Liquidating Trustee. The costs and expenses
of the Liquidating Trust, including the fees and expenses of the Liquidating
Trustee and its retained professionals, shall be paid first out of the
Liquidating Trust Assets. Fees and expenses incurred in connection with the
prosecution and settlement of any Claims shall be considered costs and expenses
of the Liquidating Trust.
3.9 Compensation of the Liquidating Trustee. The Liquidating Trustee shall
be entitled to reasonable compensation in an amount consistent with that of
similar functionaries in similar types of liquidations.
3.10 Retention of Professionals by the Liquidating Trustee. The
Liquidating Trustee may retain and compensate counsel and other professionals to
assist in its duties as Liquidating Trustee on such terms as the Liquidating
Trustee deems appropriate.
3.11 Reliance by Liquidating Trustee. Except as otherwise provided in
Article 8 hereof:
(a) the Liquidating Trustee may rely, and shall be protected in
acting upon, any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, or other paper or document believed by
him to be genuine and to have been signed or presented by the proper party or
parties; and
(b) Persons dealing with the Liquidating Trustee shall look only to
the Liquidating Trust Assets to satisfy any liability incurred by the
Liquidating Trustee to such person in carrying out the terms of this Trust
Agreement, and neither the Liquidating Trustee nor any Trustee shall have any
personal obligation to satisfy any such liability.
3.12 Investment and Safekeeping of Trust Assets. The right and power of
the Liquidating Trustee to invest Liquidating Trust Assets, the proceeds
thereof, or any income earned by the Liquidating Trust, shall be limited to the
right and power that a liquidating trust, within the meaning of Treasury
Regulations Section 301.7701-4(d), is permitted to hold, pursuant to the
Treasury Regulations, or any modification in the IRS guidelines, whether set
forth in IRS rulings, other IRS pronouncements or otherwise. The Liquidating
Trustee may expend the Cash of the Liquidating Trust (a) as reasonably necessary
to meet contingent liabilities and to maintain the value of the respective
assets of the Liquidating Trust during liquidation, (b) to pay the reasonable
costs and expenses (including, without limitation, any taxes imposed on the
Liquidating Trust) and (c) to satisfy other respective liabilities incurred by
the Liquidating Trust in accordance with this Trust Agreement or the Plan.
3.13 Authorization to Expend Liquidating Trust Assets. The Liquidating
Trustee may expend the Liquidating Trust Assets (a) as reasonably necessary to
maintain the value of the Liquidating Trust Assets during liquidation, (b) to
pay all costs and expenses of the Liquidating Trust (including, without
limitation, any taxes imposed on the Liquidating Trust), and (c) to satisfy all
other liabilities incurred or assumed by the Liquidating Trust (or to which the
Liquidating Trust Assets are otherwise subject) in accordance with this Trust
Agreement and the Plan.
ARTICLE 4
TAX MATTERS
4.1 Federal Income Tax Treatment of the Trust for the Liquidating Trust
Assets.
(i) Liquidating Trust Assets Treated as Owned by Creditors. For all
federal income tax purposes, all parties (including, without limitation, the
Company, the Liquidating Trustee, and the Beneficiaries) shall treat the
transfer of the Liquidating Trust Assets to the Liquidating Trust for the
benefit of the Beneficiaries as (A) a transfer of the Liquidating Trust Assets
directly to the Beneficiaries followed by (B) the transfer by such holders to
the Liquidating Trust of the Liquidating Trust Assets in exchange for beneficial
interests in the Liquidating Trust. Accordingly, the Beneficiaries shall be
treated for federal income tax purposes as the grantors and owners of their
respective share of the Liquidating Trust Assets.
(ii) Tax Reporting.
A. The Liquidating Trustee shall file returns for the
Liquidating Trust as a grantor trust pursuant to Treasury Regulation
section 1.671-4(a) and in accordance with this Article 4. The Liquidating
Trustee shall also annually send to
each holder of a beneficial interest a separate statement setting forth
the holder's share of items of income, gain, loss, deduction or credit and
will instruct all such holders to report such items on their federal
income tax returns. The Liquidating Trust's taxable income, gain, loss,
deduction or credit will be allocated to the Beneficiaries in accordance
with their relative beneficial interests in the Liquidating Trust.
B. As soon as possible after the Effective Time and Date, the
Liquidating Trustee shall make a good faith valuation of the Liquidating
Trust Assets, and such valuation shall be used consistently by all parties
(including, without limitation, the Company, the Liquidating Trustee, and
the Beneficiaries) for all federal income tax purposes. The Liquidating
Trustee shall also file (or cause to be filed) any other statements,
returns or disclosures relating to the Liquidating Trust that are required
by any governmental unit.
C. The Liquidating Trustee shall be responsible for payments,
out of the Liquidating Trust Assets, of any taxes imposed on the trust or
its assets.
D. The Liquidating Trustee may request an expedited
determination of Taxes of the Liquidating Trust, for all returns filed
for, or on behalf of, the Liquidating Trust for all taxable periods
through the dissolution of the Liquidating Trust.
ARTICLE 5
LIQUIDATING TRUST CONTINGENCY RESERVE
5.1 Creation of Reserve. On the Effective Time and Date, the Liquidating
Trustee shall place an undivided interest in a portion of the Liquidating Trust
Assets in the Liquidating Trust Contingency Reserve for unknown or disputed
Claims. The amount of Liquidating Trust Assets so placed in the Liquidating
Trust Contingency Reserve shall equal One Million One Hundred Fifty Thousand
Dollars ($1,150,000.00) (the "Contingency Reserve Assets").
5.2 Withholding Pending Allowance of Claims. The Liquidating Trustee shall
withhold from any property to be distributed under this Trust Agreement the
Contingency Reserve Assets and shall hold such property in trust pending
resolution of any unknown or contingent Claims, together with all earnings
thereon (net of any expenses allocable thereto, including, without limitation,
any taxes imposed thereon or otherwise payable by the trust).
ARTICLE 6
DISTRIBUTIONS
6.1 Delivery of Liquidating Trust Distributions. All distributions under
this Trust Agreement to any Beneficiary shall be made at the address of such
holder as set forth on the books and records/ of the Liquidating Trust, the
Company or either or their agents, unless the Liquidating Trustee has been
notified in writing of a change of address, including, without
limitation, by the filing of a proof of claim or interest by such holder that
contains an address for such holder different from the address reflected on the
record for such holder. In the event that any distribution to any holder is
returned as undeliverable, the Liquidating Trustee shall use reasonable efforts
to determine the current address of such holder, but no distribution to such
holder shall be made unless and until the Liquidating Trustee has determined the
then current address of such holder, at which time such distribution shall be
made to such holder without interest; provided, however, that such undeliverable
or unclaimed distributions shall be deemed unclaimed property at the expiration
of one year from the date of distribution. The Liquidating Trustee shall
reallocate the undeliverable and unclaimed distributions for the benefit of the
holders of other Beneficiaries.
6.2 Manner of Payment. At the option of the Liquidating Trustee, any Cash
payment to be made under this Trust Agreement may be made by a check or wire
transfer or as otherwise required or provided in applicable agreements.
6.3 Cash Distributions. No Cash distributions shall be required to be made
in an amount less than $10,000. Any funds so withheld and not distributed shall
be held in reserve and distributed in subsequent distributions. Notwithstanding
the foregoing, all cash shall be distributed in the Final Liquidating
distribution of the Liquidating Trust.
ARTICLE 7
SUCCESSOR TRUSTEES
7.1 Resignation. The Liquidating Trustee may resign by giving not less
than ninety (90) days' prior written notice thereof to the holders of
Liquidating Trust Interests. Such resignation shall become effective on the
later to occur of: (i) the day specified in such notice; or (ii) the appointment
of a successor Trustee and the acceptance by such successor Trustee of such
appointment. If a successor Trustee is not appointed or does not accept its
appointment within ninety (90) days following delivery of notice of resignation,
the Liquidating Trustee may petition the Chancery Court for the appointment of a
successor Trustee.
7.2 Acceptance of Appointment by Successor Trustee. Any successor Trustee
appointed hereunder shall execute an instrument accepting such appointment
hereunder and shall file such acceptance with the Liquidating Trust records.
Thereupon, such successor Trustee shall, without any further act, become vested
with all the estates, properties, rights, powers, trusts and duties of its
predecessor in the Liquidating Trust with like effect as if originally named
herein; provided, however, that an incapacitated, or resigning Trustee shall,
nevertheless, when requested in writing by the successor Trustee, execute and
deliver an instrument or instruments conveying and transferring to such
successor Trustee under the Liquidating Trust all the estates, properties,
rights, powers, and trusts of such predecessor Trustee.
ARTICLE 8
INDEMNIFICATION
8.1 Indemnification of Liquidating Trustee. The Liquidating Trustee, and
the Liquidating Trustee's agents, representatives, designees, and professionals,
and their respective employees, shall not be liable for actions taken or omitted
by any individual Trustee, agent, representative, designee, professional, or
employee, and shall not be liable for any actions taken or omitted in its
capacity as, or on behalf of, the Liquidating Trustee, except those acts or
omissions arising out of its or their own willful misconduct, fraud, or gross
negligence, and each shall be entitled to indemnification and reimbursement for
fees and expenses in defending any and all of its actions or inactions in its
capacity as, or on behalf of, the Liquidating Trustee, except for any actions or
inactions involving willful misconduct, fraud, or gross negligence. Any
indemnification claim of the Liquidating Trustee (and the other parties entitled
to indemnification under this Section 8.1) shall be satisfied first from the
Contingency Reserve Assets and then from the Liquidating Trust Assets. The
Liquidating Trustee shall be entitled to rely, in good faith, on the advice of
its retained professionals. The Liquidating Trust shall indemnify and hold
harmless the Liquidating Trustee and its Trustees, designees, and professionals,
and all duly designated agents and representatives thereof, from and against and
in respect of all liabilities, losses, damages, claims, costs, and expenses,
including without limitation attorneys' fees and costs arising out of or due to
their actions or omissions, or consequences of such actions or omissions, with
respect to the Liquidating Trust or the implementation or administration of this
Trust Agreement and the Plan; provided, however, that no such indemnification
will be made for such actions or omissions as a result of willful misconduct,
fraud, or gross negligence.
ARTICLE 9
REPORTS TO HOLDERS OF LIQUIDATING TRUST INTERESTS
9.1 Securities Laws, Tax and Other Reports to Holders of Liquidating Trust
Interests.
(a) Securities Laws. The issuance of Liquidating Trust Interests
under the Plan shall be exempt from registration under the Securities Act of
1933 and applicable state and local laws requiring registration of securities.
If the Liquidating Trustee determines, with the advice of counsel, that the
Liquidating Trust is required to comply with the registration and reporting
requirements of the Securities Exchange Act of 1934, as amended, or the
Investment Company Act of 1940, as amended, then the Liquidating Trustee shall
take any and all actions to comply with such reporting requirements and file
periodic reports with the Securities and Exchange Commission.
(b) Other Reporting. If the Liquidating Trustee is not required to
file the periodic reports referred to in Section 9.1(a) above, as soon as
practicable after December 31 of each year, and as soon as practicable upon
termination of the Liquidating Trust, the Liquidating Trustee shall submit to
each holder of Liquidating Trust Interests appearing on its records as of such
date or the date of termination a written report by filing such report on
abbreviated Form 10-K with the Securities and Exchange Commission. Such report
shall include, without limitation, the following: (i) financial statements of
the Liquidating Trust for such period prepared on a modified cash basis or other
comprehensive basis of accounting, and, if the end of a calendar year, a report
of an independent certified public accountant employed by the
Liquidating Trustee, which report shall reflect the result of such procedures
relating to the financial accounting administration of the Liquidating Trust as
approved by the Liquidating Trustee; and (ii) a description of any action taken
by the Liquidating Trustee in the performance of its duties that materially
affects the Liquidating Trust and of which notice has not previously been given
to the holders of Liquidating Trust Interests. The Liquidating Trustee shall
promptly submit additional reports to the holders of Liquidating Trust Interests
whenever a material event or change occurs that affects either the Liquidating
Trust or the rights of the holders of Liquidating Trust Interests hereunder. The
annual reports furnished pursuant to this Section 9.1(b) shall include a
description of the progress of converting Liquidating Trust Assets to Cash and
making distributions to holders of Liquidating Trust Interests and any other
material information relating to the Liquidating Trust Assets and the
administration of the Liquidating Trust.
(c) Tax Reporting. By March 31 (if such day is not a Business Day,
the first Business Day thereafter) following the end of each calendar year, the
Liquidating Trustee shall submit to each holder of a Liquidating Trust Interest
appearing on its records during such year a separate statement setting forth the
holder's share of items of income, gain, loss, deduction or credit and will
instruct all such holders to report such items on their federal income tax
returns. The Liquidating Trust's taxable income, gain, loss, deduction, and
credit will be allocated pro rata to the holders of Liquidating Trust Interests
in accordance with such holders' respective beneficial interests in the Trust.
The Liquidating Trustee shall file (or cause to be filed) any other statements,
returns, or disclosures relating to the Liquidating Trust that are required by
any governmental authority.
(d) Any report required to be distributed by the Liquidating Trustee
under Section 9.1(b) hereof shall also be distributed to the Persons listed in
Section 12.6 hereof within ten Business Days of its distribution to holders of
Liquidating Trust Interests under Section 9.1 (b) hereof. The Liquidating
Trustee may post any report required to be provided under this Section 9.l on a
website maintained by the Liquidating Trustee in lieu of actual notice to
holders of Liquidating Trust Interests (unless otherwise required by law)
subject to providing notice to the Persons listed in Section 12.6 herein.
ARTICLE 10
TERMINATION OF LIQUIDATING TRUST
10.1 Termination of Liquidation Trust. The Liquidating Trust will
terminate on the earlier of (a) thirty (30) days after the final distribution of
all of the Liquidating Trust Assets in accordance with the terms of this Trust
Agreement and the Plan; or (b) the third (3rd) anniversary of the Effective Time
and Date. Notwithstanding the foregoing, multiple fixed-term extensions can be
obtained so long as Chancery Court approval upon motion and a showing that such
extension is necessary to facilitate or complete the recovery and liquidation of
the Liquidation Trust Assets is obtained within six (6) months before the
expiration of the original term and each extended term. The aggregate of all
such extensions shall not exceed three (3) years, unless the Liquidating Trustee
receives a favorable ruling from the IRS that any further extension would not
adversely affect the status of the Liquidating Trust as a liquidating trust
within the meaning of Treasury Regulations Section Section 301.7701-4(d) for
federal income tax
purposes. The Liquidating Trustee shall not unduly prolong the duration of the
Liquidating Trust and shall at all times endeavor to resolve, settle or
otherwise dispose of all claims that constitute Liquidating Trust Assets and to
effect the distribution of the Liquidating Trust Assets to the holders of the
Liquidating Trust Interests in accordance with the terms hereof and terminate
the Liquidating Trust as soon as practicable.
ARTICLE 11
AMENDMENT AND WAIVER
11.1 Amendment and Waiver. Any substantive provision of this Trust
Agreement may be amended or waived by the Liquidating Trustee with the approval
of the Chancery Court, or by the Liquidating Trustee, provided, however, that no
change may be made to this Trust Agreement that would (a) adversely affect the
Distributions to be made under this Trust Agreement to any Beneficiaries, or (b)
adversely affect the U.S. Federal income status of the Liquidating Trust as a
"liquidating trust" (in accordance with Section 1.2 hereof). Notwithstanding
this Section 11.1, any amendments to this Trust Agreement shall not be
inconsistent with the purpose and intention of the Liquidating Trust to
liquidate in an expeditious but orderly manner the Liquidating Trust Assets in
accordance with Treasury Regulations Section 301.7701-4(d) and Section 1.2
hereof.
ARTICLE 12
MISCELLANEOUS PROVISIONS
12.1 Intention of Parties to Establish Liquidating Trust. This Trust
Agreement is intended to create a liquidating trust for federal income tax
purposes and, to the extent provided by law, shall be governed and construed in
all respects as such a trust and any ambiguity herein shall be construed
consistent herewith and, if necessary, this Trust Agreement may be amended to
comply with such federal income tax laws, which amendments may apply
retroactively.
12.2 Preservation of Privilege and Defenses. In connection with the
rights, claims, and causes of action that constitute the Liquidating Trust
Assets, any attorney-client privilege, work-product privilege, or other
privilege or immunity attaching to any documents or communications (whether
written or oral) transferred to the Liquidating Trust shall vest in the
Liquidating Trustee and its representatives, and the Company are authorized to
take all necessary actions to effectuate the transfer of such privileges and
available defenses.
12.3 Prevailing Party. If the Liquidating Trustee or the Liquidating
Trust, as the case may be, is the prevailing party in a dispute regarding the
provisions of this Trust Agreement or the enforcement thereof, the Liquidating
Trustee or the Liquidating Trust, as the case may be, shall be entitled to
collect any and all costs, expenses and fees, including attorneys' fees, from
the nonprevailing party incurred in connection with such dispute or enforcement
action.
12.4 Laws as to Construction. This Trust Agreement shall be governed by
and construed in accordance with the laws of the State of Delaware, without
giving effect to rules
governing the conflict of laws. In the event of any conflict between the terms
of this Trust Agreement and the Plan, this Trust Agreement shall control.
12.5 Severability. If any provision of this Trust Agreement or the
application thereof to any Person or circumstance shall be finally determined by
a court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Trust Agreement, or the application of such provision to
Persons or circumstances other than those as to which it is held invalid or
unenforceable, shall not be affected thereby, and such provision of this Trust
Agreement shall be valid and enforced to the fullest extent permitted by law.
12.6 Notices. Any notice or other communication hereunder shall be in
writing (including by facsimile transmission or by e-mail) and shall be deemed
to have been sufficiently given, for all purposes, if deposited, postage
prepaid, in a post office or letter box addressed to the person for whom such
notice is intended (or, in the case of notice by facsimile transmission or
email, when received and telephonically or electronically confirmed), addressed
as follows (provided, however, that only one notice or other communication
hereunder need be sent to holders sharing the same address):
If to the Liquidating Trustee or Trustees, to:
Xxxx X. Xxxxxxx
High Speed Access Corp. Liquidating Trust
0000 Xxxxxxxxx Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Phone: 000-000-0000
Fax: 000-000-0000
Email: Xxxxxxxx@xxxxxxxx.xxx
With a copy to:
Xxxxx Xxxxx, Esq.
Xxxxx Xxxxxxx & Xxxxx, LLP
000 X. Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxxxxx, XX 00000
Facsimile: 000-000-0000
12.7 Headings. The section headings contained in this Trust Agreement are
solely for convenience of reference and shall not affect the meaning or
interpretation of this Trust Agreement or of any term or provision hereof.
12.8 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument, but
all together shall constitute one agreement.
12.9 Relationship to the Plan. The principal purpose of this Trust
Agreement is to aid in the implementation of the Plan and therefore this Trust
Agreement incorporates the provisions of the Plan. To that end, the Liquidating
Trustee shall have full power and authority to take any action consistent with
the purpose and provisions of the Plan, and to seek any orders from the
Bankruptcy Court in furtherance of implementation of this Trust Agreement, the
Plan. If any provisions of this Trust Agreement are found to be inconsistent
with the provisions of the Plan, the provisions of this Trust Agreement shall
control.
12.10 No Bond. The Liquidating Trustee and each Trustee may serve without
bond.
12.11 Confidentiality. The Liquidating Trustee and each Trustee shall,
during the period that they serve in such capacity under this Trust Agreement
and following either the termination of this Trust Agreement or such Liquidating
Trustee's removal, incapacity, or resignation hereunder, hold strictly
confidential and not use for personal gain any material, non-public information
of or pertaining to any entity to which any of the Liquidating Trust Assets
relates or of which it has become aware in its capacity as Liquidating Trustee
or Trustee.
IN WITNESS WHEREOF, the parties hereto have either executed and
acknowledged this Trust Agreement, or caused it to be executed and acknowledged
on their behalf by their duly authorized officers all as of the date first above
written.
HIGH SPEED ACCESS CORP.
By: __________________________________
Xxxxx X. Xxxxx, Xx.
Chairman of the Board of Directors
Liquidating Trustee
______________________________________
Name: Xxxx X. Xxxxxxx
