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EXHIBIT 10.30
TRUST AGREEMENT
THIS TRUST AGREEMENT (this "Agreement") is entered into effective as of
July 18, 2001, by and among (i) J. Xxxxxxx Xxxxxxxx ("Xxxxxxxx"), J. Xxxxxxx
Xxxxx ("Xxxxx"), Xxxx X. X'Xxxxx ("X'Xxxxx"), and Xxxx X. Xxxxxxxx (each an
"Administrator" and collectively, the "Administrators"), and (ii) Xxxx X. Salt,
an individual (the "Trustee"). The parties listed on Exhibit A (the
"Indemnitees") to this Agreement join this Agreement, for purposes of providing
the indemnity discussed in Section 5(c) below and for the other benefits and
obligations specified herein, by affixing their signatures on Exhibit A.
International Total Services, Inc., an Ohio corporation (the "Company") joins
this Agreement solely for purposes of providing the indemnity discussed in
Section 5(c) below by affixing its signature on Exhibit B.
R E C I T A L S:
A. The Company and the Administrators are among the parties to a
Retention and Indemnification Agreement (the "Retention and
Indemnification Agreement") entered into and effective as of even date,
pursuant to which, among other things, the Company has agreed to deposit
certain funds into a trust account to be used in the event that one or
more appropriate claims are brought against one or more of the
Indemnitees, including, without limitation, any claims that are brought
against Schwartz, Eakin, or O'Brien in their capacities as trustees under
that certain Voting Trust Agreement (the "Xxxxxxx Voting Trust Agreement")
made and entered into as of the 1st day of November, 1999, by and among
the Company, Xxxxxx X. Weitzel, Schwartz, Xxxxx and X'Xxxxx; and
B. It is contemplated and intended by the parties to the Retention
and Indemnification Agreement, including, without limitation, the
Administrators, that the funds deposited by the Company pursuant to the
terms of the Retention and Indemnification Agreement are to be used (in
accordance with the provisions of this Agreement) for the benefit of an
Indemnitee in the event that either the payment of or reimbursement of
Expenses (as defined below) of such Indemnitee that is sought from Trustee
under this Agreement has not already (i) been provided by the Company, or
(ii) been satisfied out of any insurance proceeds available (as referred
to in Section 2 of the Retention and Indemnification Agreement or
otherwise); and
C. The Administrators desire to appoint Trustee to serve as trustee
to hold the funds deposited by the Company pursuant to the terms of the
Retention and Indemnification Agreement, and Trustee is willing to accept
such appointment, pursuant to the terms and conditions of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, the parties to this Agreement hereby agree as
follows:
1. Appointment of Trustee. The Administrators, jointly and severally,
hereby appoint Xxxx X. Salt as trustee, to act in accordance with the terms and
conditions set forth in this Agreement, and Trustee hereby accepts such
appointment and shall act in accordance with such terms and conditions.
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EXHIBIT 10.30
2. Establishment of Trust.
(a) The Company has deposited with Trustee, contemporaneously with the
execution and delivery of this Agreement and of the Retention and
Indemnification Agreement, Five Hundred Thousand Dollars ($500,000.00) in
immediately available funds (the "Initial Deposit"). The Initial Deposit,
together with all Interest (as hereinafter defined) shall be referred to as the
"Trust Fund".
(b) Trustee shall segregate the Trust Fund from the assets of Trustee and
shall hold the Trust Fund in trust for the benefit of the Indemnitees under this
Agreement. Trustee shall disburse the Trust Fund only in accordance with the
terms of this Agreement.
3. Receipt and Investment of Funds. Trustee hereby acknowledges receipt of
the Initial Deposit from the Company on the date of this Agreement and shall
invest the Trust Fund, from and after the date of this Agreement, unless
otherwise directed in a joint writing by all of the Administrators, in (a)
obligations issued or guaranteed by the United States of America or by any
agency or instrumentality thereof, (b) obligations (including certificates of
deposit and bankers' acceptances) of banks which at the date of their last
public reporting had total assets in excess of U.S. $500,000,000.00, (c)
commercial paper rated at least AA or Aa, and (d) money market fund shares of
regulated investment companies invested exclusively in the securities described
in the foregoing clauses. Trustee shall hold all interest and other
distributions or gains derived from such investments and reinvestments, if any
(collectively, "Interest"), in trust under this Agreement.
4. Term; Distribution of the Trust Fund. For the purposes of this
Agreement, the term of the Agreement (the "Term") shall begin on the date of
this Agreement and end on the date a total depletion of the Trust Fund occurs
due to a distribution or distributions of the Trust Fund by Trustee pursuant to
the terms of this Agreement. Trustee shall disburse the Trust Fund as follows:
(a) upon receipt of a written notice from an Indemnitee, including, without
limitation, an Administrator, to an Administrator seeking payment under this
Agreement (i) informing such Administrator of a threatened, pending or completed
action, suit or proceeding, whether civil, criminal, administrative or
investigative (a "Proceeding"), to which the Indemnitee was, is or is threatened
to be made a party by reason of facts which include the Indemnitee's being or
having been a director, officer, employee or agent of the Company and/or is or
was serving at the request of the Company as a director, trustee, officer,
employee, member or agent of another corporation, limited liability company,
partnership, joint venture, trust or other enterprise, including, without
limitation, the voting trust established pursuant to the Xxxxxxx Voting Trust
Agreement; together with (ii) reasonable documentation of the amount and nature
of any expenses (including attorneys' fees), judgments, fines and/or amounts
paid in settlement, or other costs actually incurred by the Indemnitee (the
"Expenses") defending any Proceeding; and also (iii) written confirmation that
either the payment of or reimbursement of Expenses that the Indemnitee is
seeking under this Agreement has not already (A) been provided to the Indemnitee
by the Company, or (B) been satisfied out of any insurance proceeds available
(as referred to in Section 2 of the Retention and Indemnification Agreement or
otherwise); then (iv) said Administrator
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EXHIBIT 10.30
shall promptly deliver to the Trustee notice of the amount and the identity of
the Indemnitee claiming Expenses and Trustee shall pay (or reimburse the
Indemnitee for, as the case may be), without any input or action required on the
Company's part and irrespective of any input or action on the Company's part,
said Expenses out of the Trust Fund within thirty (30) days of Trustee's receipt
of such request; or, alternatively, (b) upon receipt of written instructions
signed by two (2) or more of the Administrators to disburse a portion or the
balance of the Trust Fund to the Company, then Trustee shall deliver such
portion or the balance of the Trust Fund, as the case may be, to the Company
within five (5) working days after receipt of such notice. Trustee, the
Administrators and the Indemnitees agree to provide a copy of any notice under
this Section 4 to each of the Administrators.
5. Exculpation and Indemnification of Trustee.
(a) Trustee shall have no duties or responsibilities other than those
expressly set forth in this Agreement. Trustee shall not be liable to any party
to this Agreement by reason of any failure on the part of any party to this
Agreement (other than Trustee), to perform such party's obligations under this
Agreement or under any other document. Except for this Agreement and
instructions to Trustee pursuant to the terms of this Agreement, Trustee is not
obligated to recognize any agreement or agreements among either the
Administrators or among the Administrators and the Company, notwithstanding
Trustee's knowledge of any such agreement or agreements. In the event Trustee is
uncertain as to any duties or responsibilities under this Agreement or receives
instructions from any of the parties to this Agreement with respect to the Trust
Fund which in its belief are in conflict with any of the provisions of this
Agreement, Trustee shall be entitled to refrain from taking any action until it
is directed to do so in writing by order of a court of competent jurisdiction
(the time for all appeals therefrom having expired) in proceedings which Trustee
or any other party to this Agreement shall be entitled to commence.
(b) Trustee shall not be liable for any action taken or omitted by it, or
any action suffered by it to be taken or omitted, in good faith and in the
exercise of its own best judgment, and may rely conclusively on, and shall be
protected in acting upon, any order, notice, demand, certificate, or opinion or
advice of counsel (including counsel chosen by Trustee), statement, instrument,
report or other paper or document (not only as to its due execution and the
validity and effectiveness of its provisions, but also as to the truth and
acceptability of any information therein contained) which is reasonably believed
by Trustee to be genuine and to be signed or presented by the proper party or
parties.
(c) Trustee shall be indemnified and held harmless jointly and severally
by the Indemnitees and by the Company from and against any expenses, including
reasonable counsel fees and disbursements, damages or losses suffered by Trustee
in connection with any claim or demand which in any way, directly or indirectly,
arises out of or relates to this Agreement or the services of Trustee under this
Agreement; provided, however, that if Trustee is guilty of willful misconduct or
gross negligence under this Agreement, then Trustee shall bear all losses,
damages and expenses arising as a result of such willful misconduct or gross
negligence. Promptly after the receipt by Trustee of notice of any such demand
or claim or the commencement of any action, suit or proceeding related to such
demand or claim, Trustee shall notify the other parties to this Agreement in
writing. For the purposes of this Agreement, the terms "expense" and
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EXHIBIT 10.30
"loss" shall include all amounts paid or payable to satisfy any such claim or
demand, or in settlement of any such claim, demand, action, suit or proceeding
related to this Agreement, and all costs and expenses, including, but not
limited to, reasonable counsel fees and disbursements, paid or incurred in
investigating or defending against any such claim, demand, action, suit or
proceeding.
6. Compensation of Trustee. Trustee shall serve without compensation.
Trustee shall have the right to incur and pay such reasonable expenses and
charges as he may deem necessary and proper for carrying this Agreement into
effect and for discharge of the Administrators' rights and duties under this
Agreement. Any such expenses or charges incurred by and due to Trustee shall
promptly be communicated to all of the Administrators in writing and, after
receiving written approval from two (2) of the Administrators, Trustee shall pay
such expenses or charges out of the Trust Fund.
7. Resignation of Trustee. At any time, upon thirty (30) days' prior
written notice to all of the Administrators, Trustee may resign and be
discharged from his duties as Trustee under this Agreement. As soon as
practicable after his resignation Trustee shall promptly turn over to a
successor trustee mutually appointed by the Administrators all monies and
property held under this Agreement upon presentation of a document appointing
the new trustee and evidencing its acceptance thereof.
8. Resignation of Administrators. At any time upon thirty (30) days' prior
written notice to all of the other Administrators, an Administrator may resign
and be discharged from his duties as an Administrator under this Agreement. To
the extent any Administrator resigns or is otherwise unable to serve as an
Administrator, his successor shall be appointed from among the remaining
Indemnitees by a majority of the remaining Administrators. There shall be, at
all times, four (4) Administrators; provided, however, that in the event there
are, at any time, less than four (4) Indemnitees, the number of Administrators
shall equal the number of indemnitees. Any writing required to be signed by two
(2) or more Administrators may be signed by one (1) Administrator should there
only be one (1) Administrator.
9. Records. Trustee shall maintain accurate records of all transactions
under this Agreement. Promptly after the termination of this Agreement pursuant
to Paragraph 4 above, or Trustee's resignation pursuant to Paragraph 7 above, or
as may reasonably be requested by one or more of the Administrators from time to
time before such termination, Trustee shall provide each of the Administrators
with a complete copy of such records, certified by Trustee to be a complete and
accurate account of all such transactions. Each of the Administrators shall also
have access to such books and records at all reasonable times during normal
business hours upon reasonable notice to Trustee.
10. Notice. All notices and other communications under this Agreement
shall be in writing and shall be deemed to have been duly delivered (i) if
delivered personally, including by reputable overnight courier service, upon
delivery against a signed receipt therefor, or (ii) upon transmission by
facsimile or telecopier, which transmission is confirmed, in either case
addressed to the party to be notified at the address set forth
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EXHIBIT 10.30
below, or at such other address as such party shall have previously notified the
other parties hereto by notice duly given in conformity with this Paragraph 10
(and the Indemnitees, at the address for notice pursuant to the Retention and
Indemnification Agreement). Notwithstanding any provision of this Agreement to
the contrary, if any notice or other communication under this Agreement is
delivered or transmitted after 5:00 P.M. Eastern Standard Time on a business day
or at any time on a non-business day, then such delivery or transmission shall
be deemed to be effective on the next following business day.
If to Trustee to: Xx. Xxxx X. Salt
____________________
____________________
____________________
Phone:______________
Fax:________________
If to the Administrators to:
H. Xxxxxxx Xxxxxxxx
c/o Benesch, Friedlander, Xxxxxx & Aronoff
0000 XX Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000-0000
Phone: 000.000.0000
Fax: 000.000.0000
Xxxx X. X'Xxxxx
c/o Inglewood Associates, Inc.
00 Xxxxx Xxxxxx
Xxxxxxx Xxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
J. Xxxxxxx Xxxxx
c/o Preferred Capital, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
Phone: 000.000.0000
Fax: 000.000.0000
Xxxx X. Xxxxxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
Phone: 000.000.0000
Fax:________________
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