CLASS 7B LIQUIDATING TRUST AGREEMENT
This Class 7B Liquidating Trust Agreement (this "AGREEMENT") is between
Mercury Finance Company (the "DEBTOR" and the "REORGANIZED DEBTOR"), and the
Trustees, pursuant to the Debtor's Second Amended Plan of Reorganization dated
December 30, 1998 (the "PLAN").
RECITALS
FIRST: The Debtor is a debtor-in-possession in a chapter 11
reorganization case, Case No. 98 B 20763 (the "REORGANIZATION
CASE"), currently pending before the United States Bankruptcy
Court for the Northern District of Illinois, Eastern Division
(the "COURT").
SECOND: The Debtor has filed the Plan which provides, among other
things, for the complete settlement, satisfaction, and
discharge of the Class 7B Claims, as that term is defined in
the Plan (collectively, the "CLASS 7B CLAIMS"). The Plan has
been confirmed by the Court.
THIRD: The Plan contemplates the creation of a trust, the principal
purpose of which is to implement the Plan's treatment of the
Class 7B Claims asserted against the Debtor.
NOW, THEREFORE, it is hereby agreed as follows:
ARTICLE I
DEFINITIONS
1.01 All capitalized terms used in this Agreement, and not otherwise
defined herein, shall have the meanings ascribed to them by the Plan or the
Bankruptcy Code, which meanings are incorporated herein by this express
reference.
ARTICLE II
DECLARATION OF TRUST
2.01 CREATION AND NAME. There is hereby created a trust, which shall be
known as the "Class 7B Liquidating Trust" (the "TRUST").
2.02 PURPOSE. The purpose for the Trust is to serve as the mechanism to
implement the Plan's treatment of the Class 7B Claims as fairly and
expeditiously as practicable. Accordingly, an attendant purpose of the Trust is
to qualify as a non-reversionary Designated Settlement Fund pursuant to Section
468 of the Internal Revenue Code.
In order to accomplish the foregoing, the Trustees hereby
agree:
(A) to conserve and protect the Trust estate so as to enable
the Trustees to satisfy as fully as possible all Allowed Class
7B Claims in accordance with the terms of the Plan and this
Agreement; and
(B) to administer the Trust and report on its status as set
forth herein or as otherwise required by the Court.
2.03 TRANSFER OF ASSETS; BENEFICIARIES. On the Effective Date, the
Reorganized Debtor hereby transfers and assigns to the Trust, to be held in
trust, for the holders of Allowed Class 7B Claims all of the Debtor's, the
Reorganized Debtor's, and the Estate's rights, title, and interest in and to all
of the following (collectively, the "INITIAL TRUST ASSETS"):
(A) The sum of Five Million Dollars ($5,000,000) in cash which
sum shall be transferred pursuant to the wire transfer
instructions provided by the Securities Claimants' Committee.
(B) All of the Debtor's, the Reorganized Debtor's, and the
Estate's rights, title, and interests in and to any and all of
their respective claims against KPMG Peat Marwick, including
without limitation those relating to, arising from, or on
account of: (i) the announcement on January 29, 1997, that the
Debtor would restate its earnings for certain periods as a
result of accounting irregularities, (b) such accounting
irregularities, and (c) the actions or non-action of KPMG Peat
Marwick with respect to the foregoing or with respect to its
role as auditor of and provider of other services, including
accounting, to the Debtor prior to and at the time of the
announcement of the accounting irregularities, together with
complete and exclusive control of the prosecution and/or
settlement of all such claims against KPMG Peat Marwick and
the sole right to prosecute the same on behalf of and in the
name of the Debtor, the Reorganized Debtor, the Trust, and the
Estate, subject, in each case, to any defenses, rights of
setoff, or counterclaims that KPMG Peat Marwick may have or be
entitled to assert against the Debtor in respect of such
claims (collectively, the "COMPANY KPMG CLAIMS"). The Company
KPMG Claims and attendant prosecution rights shall be deemed
to be assets of the Trust as of the Effective Date.
(C) The sum of Two Hundred Fifty Thousand Dollars
($250,000.00), in cash which sum shall be transferred pursuant
to the wire transfer instructions provided by the Securities
Claimants' Committee, for fees and costs to be incurred in
connection with the administration of the Trust.
In addition to the Initial Trust Assets, other assets may be transferred to the
Trust. These assets may and shall include any proceeds received by the Trust as
a result of the Company KPMG Claims as well as any proceeds or claims received
by the Trust pursuant to the settlement agreement dated as of December 23, 1998,
a copy of which is attached as Exhibit ___ to the Disclosure Statement (defined
in Section 8.15 of the Plan as the "CLASS SETTLEMENT AGREEMENT") or otherwise
pursuant to the Plan or agreements implementing the Plan. All assets transferred
to the Trust which are not included within the definition of the Initial Trust
Assets are referred to in this Agreement and in the Plan as the "SUBSEQUENT
TRUST ASSETS". The Initial Trust Assets and the Subsequent Trust Assets are
collectively referred to in this Agreement and in the Plan as the "TRUST
ASSETS".
2.04 FURTHER ASSURANCES; COOPERATION. The Debtor and the Reorganized
Debtor shall, and shall use their reasonable best efforts to cause their
respective current or former officers, directors, and employees to, (i)
cooperate fully in the prosecution of the Company KPMG Claims by or on behalf of
the Trust, and (ii) provide and transfer to the Trust all such documents and
information relating to the Company KPMG Claims as may be in their respective
possession, custody, or control, and (iii) provide and transfer to the Trust all
such information, claims files, and other documentation relating to the Class 7B
Claims as may be in their respective possession, custody, or control. The Debtor
and the Reorganized Debtor shall take such actions and deliver such
documentation as the Trustees may reasonably require to effectuate, perfect,
confirm, and evidence the transfer and assignment to the Trust of the Initial
Trust Assets and the validity of such transfer and assignment. All parties to
this Agreement shall take all actions as are reasonably required with respect to
any of the Trust Assets or otherwise in order to effectuate the purpose of this
Trust.
ARTICLE III
TRUSTEES
3.01 NUMBER. There shall be no less than three (3), but no more than
seven (7), Trustees of the Trust. The initial Trustees are the same Persons who
currently serve as members of the Securities Claimants' Committee approved by
the Court and who execute the signature page hereof (collectively, the "INITIAL
TRUSTEES").
3.02 TERMS OF SERVICE.
(A) Trustees shall serve for the duration of the Trust,
subject to his, her, or its earlier (i) death, (ii)
resignation, (iii) mandatory disqualification, or (iv) with
approval of the Court, removal for good cause by the
Co-Trustees.
(B) Any Trustee may resign at any time by written notice to
each of the remaining Trustees and the Court and such other
parties as may be required by applicable law. Such notice
shall specify a date when such resignation shall take effect
which, if possible, shall not be less than thirty (30) days
after the date such notice is given.
(C) For purposes of this Agreement, "MANDATORY
DISQUALIFICATION" of a Trustee will occur in the event that
the Class 7B Claim asserted by such Trustee is either (i)
disallowed in its entirety, or (ii) allocated a distribution
in an amount less than Fifteen Thousand Dollars ($15,000.00),
whether by virtue of a consensual allowance/allocation
approved by the Court or a decision by the Arbitrator.
3.03 APPOINTMENT OF SUCCESSOR TRUSTEE.
(A) If at any time after the Effective Date there are less
than three (3) Trustees, by virtue of the resignation,
removal, mandatory disqualification, or death of a Trustee or
Trustees, or otherwise, within ten (10) days thereof the
remaining Trustees shall elect a successor Trustee or Trustees
subject to the Court's approval.
(B) Upon the acceptance of office by any successor Trustee,
all rights, titles, duties, powers and authority of the
predecessor Trustee under this Agreement shall be vested in
and undertaken by the successor Trustee without any further
act being required. No successor Trustee shall be liable
personally for any act or omission of his, her, or its
predecessor.
3.04 LIABILITY OF TRUSTEES. Except as otherwise provided by applicable
law: (i) no Trustee shall be liable to the Trust or to any Person holding a
Class 7B Claim, except for his, her, or its own willful misconduct; and (ii)
except to the extent any act or failure to act on the part of a Trustee shall
constitute willful misconduct; (a) no Trustee shall be liable for any act or
omission of any Co-Trustee or any officer, agent, or employee of the Trust; (b)
the Trustees shall be entitled to rely upon the advice of counsel or other
advisors to the Trust or the Trustees, reports prepared by the Class 7B Claims
Administrator, and information provided by any other Person employed by the
Trust; and (c) all actions taken and determinations made the by the Trustees,
unless otherwise expressly provided in this Agreement, the Plan, or an order of
the Court, shall be final and binding upon all Persons having any interest in
the Trust.
3.05 REIMBURSEMENT OF TRUSTEES' EXPENSES. Each Trustee shall be
reimbursed from the Trust for his, her, or its reasonable expenses incurred in
the performance of his, her, or its duties as Trustee hereunder, provided that
any request for such reimbursement is approved by the Court after such notice
and hearing as the Court may require, and provided, further, that any legal fees
and costs incurred by such an individual Trustee, or any other Class 7B
claimant, on its own account and not on behalf of the Trust shall not be paid
from Trust Assets but shall be paid from the allocation such Trustee or Class 7B
claimant receives pursuant to the allowance/allocation procedures set forth in
this Agreement.
3.06 INDEMNIFICATION.
(A) Each Trustee or former Trustee shall be indemnified by the
Trust, to the fullest extent that a corporation organized
under ____________ law is entitled to indemnify its directors,
against any and all liabilities, expenses, claims, damages, or
losses incurred by him, her, or it in the performance of his,
her, or its duties hereunder.
(B) Any indemnification under Section 3.06 of this Agreement
shall be made by the Trust upon a determination made in
accordance with the provisions of the applicable ____________
statutes.
(C) Reasonable expenses, costs, and fees, including attorneys'
fees, incurred by or on behalf of a Trustee in connection with
any action, suit, or proceeding, whether civil,
administrative, or arbitrative, commenced against such Trustee
regarding his, her, or its performance hereunder, may be paid
by the Trust in advance of the final disposition thereof upon
receipt of any undertaking by or on behalf of such Trustee to
repay such amount if it shall be determined ultimately that
such Trustee is not entitled to be indemnified by the Trust.
(D) The Trustees shall have the power to cause the Trust to
indemnify the employees and agents of the Trust to the same
extent as provided in this Section 3.06 with respect to the
Trustees.
(E) The Trustees may purchase and maintain reasonable amounts
and types of insurance on behalf of a Person who is or was a
Trustee, employee, or agent of the Trust against liability
asserted against or incurred by such Person arising from his,
her, or its status as such Trustee, employee, or agent.
3.07 TRUSTEES' LIEN. The Trustees shall have a first priority lien upon
the Trust Assets to secure the payment of any amounts payable to them pursuant
to Section 3.05 or Section 3.06 of this Agreement.
3.08 ACTIONS BY TRUSTEES. Except as otherwise expressly set forth in
this Agreement, all decisions and determinations by the Trustees in the
performance of their duties or any other action under this Agreement shall be
made by the vote of a majority of the Trustees then in office (not simply a
majority of the Trustees who do vote) following prior written notice to all
Trustees.
3.09 BOND. The Trustees shall not be required to post any bond or other
form of surety unless otherwise ordered by the Court.
ARTICLE IV
POWERS, TRUST ADMINISTRATION
4.01 POWERS.
(A) Subject to the limitations set forth in this Agreement,
the Trustees shall have the power to take any and all such
actions as in the judgment of the Trustees are necessary to
effectuate the purposes of the Trust, including, without
limitation, each power expressly granted in Section 4.01(c) of
this Agreement, any power reasonably incidental thereto, and
any trust power now or hereafter permitted under the law of
the State of ____________ that is not inconsistent with the
provisions of this Trust.
(B) Except as expressly provided in the Plan or in this
Agreement, the Trustees may but need not obtain the order or
approval of the Court or any other court in the exercise of
any power or discretion conferred hereunder, or account to the
Court or any other court in the absence of a breach of trust.
(C) Without limiting the generality of Section 4.01(a) above,
the Trustees shall have the power to:
(I) Receive and hold the Trust Assets, and invest the
same, from time to time, in accordance with and,
subject to the limitations set forth in Section 5.02
of this Agreement;
(II) Take such actions on behalf of the Trust as may
be required in connection with the Class Settlement
Agreement;
(III) Devise, implement, supervise, modify, and
administer procedures for the allowance of Class 7B
Claims and the allocation of the assets of the Trust
among the holders of Allowed Class 7B Claims, subject
to the limitations imposed by this Agreement or the
Plan;
(IV) Utilize and distribute the Trust Assets to
satisfy Allowed Class 7B Claims in accordance with
procedures set forth in this Agreement and the Plan;
(V) Hire such employees, administrative personnel or
claims administrators, and engage such legal,
financial, accounting, investment, and other
advisors, custodians of assets, including without
limitation the Arbitrator and a Mediator, if any, as
those terms are defined below in this Agreement, and
agents as the business of the Trust requires, and to
delegate to such Persons such powers, authority, and
discretion as the Trustees, in their discretion deem
advisable or necessary to carry out the terms of the
Trust (this Section 4.01(c)(v) is not intended to,
and shall not, include the hiring of any legal,
financial, accounting, or any other type of advisors
or experts, by any Class 7B claimant or group of
Class 7B claimants for purposes of proving a Claim,
defending objections thereto, or asserting objections
thereto);
(VI) Compensate, utilizing the Trust Assets, such
employees, legal, financial, accounting, investment,
and other advisors, and agents, described in Section
4.01(c)(v) above, provided, however, that
accountants, lawyers, and investment advisors engaged
by the Trustees on behalf of the Trust to represent
the interests of the Trust shall be compensated only
with the approval of the Court after such notice and
hearing as the Court may require (this Section
4.01(c)(vi) is not intended to, and shall not,
include the utilization of any Trust Assets to
compensate any legal, financial, accounting, or any
other type of advisors or experts, retained by any
Class 7B claimant, any group of Class 7B claimants,
any individual members of the Securities' Claimants
Committee, or individual Trustees for the purpose(s)
of representing their own respective interests);
(VII) Reimburse, utilizing the Trust Assets, the
Trustees, subject to Section 3.05 above, and such,
employees, legal, financial accounting, investment
and other advisors, and agents, described in Section
4.01(c)(v) above, for all properly documented out of
pocket costs and expenses incurred by such Persons in
connection with the performance of their duties
hereunder;
(VIII) Make such decisions as they may deem
appropriate, and in accordance with the voting
procedures set forth in Section 4.03 below, in
connection with the prosecution, non-prosecution, or
resolution of the Company KPMG Claims or claims
constituting Trust Assets;
(IX) Apply to the Court for instructions to the
Trustees as they may deem proper or necessary in
connection with the administration of the Trust or
the performance of their duties;
(X) In accordance with Section 3.06, indemnify (and
purchase insurance indemnifying) Trustees and
employees, agents, and representatives of the Trust
to the fullest extent that a corporation organized
under ____________ law is entitled to indemnify its
directors, officers, employees, agents, and
representatives;
(XI) Delegate any or all of the discretionary powers
and authority herein conferred at any time with
respect to the investment of the Trust Assets to any
one or more recognized individual or institutional
advisors or investment managers acceptable to the
Trustees, and to compensate and reimburse, in
accordance with Section 4.01(c)(vi) and Section
4.01(c)(vii) above, such advisors and managers for
their services;
(XII) Establish such funds, reserves, and accounts
within the Trust Assets as may be deemed by the
Trustees to be useful in carrying out the purposes of
the Trust;
(XIII) Institute any action or proceeding at law or
in equity for the collection of any sums due the
Trust, or otherwise to advance the interests of the
Trust in a manner not inconsistent with the terms of
the Plan, prosecute any such action or proceeding to
judgment or final decree, enforce any such judgment
or final decree, and collect in any manner provided
by law the monies adjudged or decreed to be payable;
provided, however, that, so long as (A) the Debtor
has timely and fully transferred the Initial Trust
Assets into the Trust, and (B) all assets required to
be transferred to the Trust pursuant to the
Settlement Agreement have been timely and fully into
the Trust, regardless of any deficiency in the Trust
or any other reason, the Trust may not institute any
action or proceeding at law or in equity against the
Debtor, or against any other Person expressly
released pursuant to the terms of the Plan, for
collection of any sums in respect of Class 7B Claims;
(XIV) Draft and amend bylaws governing the operation
of the Trust, provided that any such bylaws are not
inconsistent with any of the provisions contained in
this Agreement;
(XV) Do all other acts and things not inconsistent
with the provisions of this Agreement and the Plan
which the Trustees may deem reasonably necessary or
desirable for the proper administration of the Trust,
in the same manner and to the same extent as a Person
might or could do with respect to his, her, or its
own property, subject to the limitations of
applicable law governing the conduct of fiduciaries.
4.02 ADMINISTRATION.
(A) The Trustees shall conduct the business of the Trust in
accordance with the provisions of this Agreement.
(B) The Trust shall use a calendar year accounting year.
(C) In the event that the duration of the Trust exceeds one
year, the Trustees shall cause to be prepared and filed with
the Court as soon as available and in any event within one
hundred twenty (120) days following the end of each fiscal
year, an annual report containing financial statements of the
Trust, including without limitation, a balance sheet of the
Trust as of the end of such fiscal year and a statement of
operations for such fiscal year audited by a recognized firm
of independent certified public accountants acceptable to and
selected by the Trustees and certified by such firm as to
fairness of presentation and consistency.
(D) Simultaneously with the earlier to occur of: (i) the
Trustees' application to the Court for an order terminating
the Trust, or (ii) the delivery of the financial statements
referred to in Section 4.02(c) above, the Trustees shall cause
to be prepared and filed with the Court a report containing a
summary in reasonable detail of the following information with
respect to the period covered by such application or such
financial statements, as the case may be:
(I) The number of Class 7B Claims liquidated and the
average amount per Allowed Class 7B Claim paid or
payable;
(II) The investment income earned by the Trust; and
(III) The amount of expenses incurred by the Trust.
All materials required to be filed with the Court by this
Section shall be available for inspection by the public in
accordance with procedures established by the Court.
(E) The Trustees shall cause to be filed timely such income
tax and other returns and statements as are required to comply
with applicable provisions of the Internal Revenue Code and of
any state law and the regulations promulgated thereunder. The
Trust shall be responsible for paying taxes and any other
obligations or liabilities of any and all kinds whatsoever
which at any time are lawfully levied, assessed upon, or
become payable in respect of the Trust or the Trust Assets.
The Trustees shall utilize Trust Assets to pay such taxes. The
Trustees shall make any election and provide any information
as may be necessary to comply with the requirement of a
Designated Settlement Fund under Section 468B(d)(2) of the
Internal Revenue Code.
4.03 COMPANY KPMG CLAIMS. The Debtor will use its best efforts to
obtain a tolling of the statute of limitations for the Company KPMG Claims until
sixty (60) days after the allowance and allocation process set forth below has
become final. Thereafter, control and all decisions regarding the Company KPMG
Claims or other claims constituting Subsequent Trust Assets, including without
limitation the filing (or non-filing), prosecution, and settlement thereof,
shall be made by the vote of the representative(s) of the holders of Allowed
Class 7B Claims holding at least a majority in dollar amount of all Allowed
Class 7B Claims (singly a "REPRESENTATIVE" or collectively "REPRESENTATIVES")
which Representative(s) may be, but is/are not required to be, a Trustee or
Trustees of the Trust, provided, however, that any decision (i) to release, or
(ii) to settle the Company KPMG Claims or claims constituting Subsequent Trust
Assets, in whole or in part, or (iii) to dismiss, if suit has been filed, shall
be submitted to the Court for approval after notice and hearing as the Court may
require, and provided, further, that all proceeds recovered, if any, as a result
of the resolution of the Company KPMG Claims or claims constituting Subsequent
Trust Assets shall remain Trust Assets and be distributed in accordance with
Section 6.04 of this Agreement. The Representative(s) shall provide status
reports to the Trustees no less frequently than semi-annually regarding actions
taken and decisions made with respect to the Company KPMG Claims and claims
constituting Subsequent Trust Assets.
ARTICLE V
ACCOUNT PAYMENTS AND INVESTMENTS
5.01 ACCOUNTS. The Trustees may, from time to time, create such
accounts and reserves within the Trust Assets as they may deem necessary,
prudent, or useful in order to provide for the payment of expenses and Class 7B
Claims and may, with respect to any such account or reserve, restrict the use of
monies therein.
5.02 INVESTMENTS. The Trustees shall cause the monies held in the Trust
to be invested and reinvested in (i) United States Treasury Bills, (ii) other
similar United States government obligations secured by the full faith and
credit of the United States including United States Treasury Notes and United
States Treasury Bonds, (iii) federally insured bank certificates of deposit, or
(iv) any combination of the foregoing.
ARTICLE VI
PROCEDURES FOR CLAIMS' ALLOWANCE,
ALLOCATION AND DISTRIBUTION
6.01 REQUESTS FOR ALLOWANCE/ALLOCATION. In connection with confirmation
of the Plan, the Debtor sought and obtained approval of the Court for the form
of notice to be sent to parties who may hold Claims in Class 7B (defined in
Section 8.15 of the Plan and referred to in this Agreement as "NOTICE"), as well
as the form, the timing, and the place for publication of such notice, and
caused such notice to be sent and published as ordered by the Court. Prior to
seeking such approval from the Court, the Debtor had obtained the review and
approval from the Securities Claimants' Committee of the forms of notice and the
place for publication thereof. The forms of notice, among other things, advise
Class 7B claimants that to be eligible to participate in the consensual
allowance process described below or obtain any distribution from the Trust,
they, or their representatives (if they are a member of a class described in a
class action pending against the Debtor on the Petition Date or are individual
holders of Class 7B claims whose claims arise from their purchase of Old Common
Stock before January 29, 1997, and who continue to hold such Old Common Stock as
of the Distribution Record Date (defined in Section 8.15 of the Plan and
referred to in this Agreement as the "OLD AND COLD HOLDERS"), must submit a
Request for Allowance/Allocation (defined in Section 8.15 of the Plan and
referred to in this Agreement as a "REQUEST FOR ALLOWANCE") prior to the date
set forth below and in accordance with procedures set forth below.
(A) DATE BEFORE WHICH REQUEST FOR ALLOWANCE MUST BE FILED. In
addition to the provisions which the Court may require, the
Notice shall notify such parties that in order to be eligible
for any distribution from the Trust, they (or their
representatives if they are either a member of a class
described in a class action pending against the Debtor on the
Petition Date or an Old and Cold Holder) must file a Request
for Allowance in the form approved by the Court with the
Claims Center on or before April 9, 1999. For purposes of the
filing of a Request for Allowance a representative of a class
may include the class representative, or if the class has not
been certified or no such representative has been appointed,
lead counsel for plaintiffs in such class action. For purposes
of the filing of a Request for Allowance, except to the extent
that the Court determines at the time of the confirmation of
the Plan that the interests of the Old and Cold Holders are
represented in pending class actions, a representative of the
Old and Cold Holders shall be approved by the Court at the
time of the confirmation of the Plan and may file a Request
for Allowance on behalf of the class of Old and Cold Holders.
(B) EVIDENCE TO ACCOMPANY REQUEST FOR ALLOWANCE. Any Request
for Allowance filed on behalf of a holder of a Class 7B Claim
shall be accompanied by true and correct copies of
confirmations, brokerage account statements, or other
sufficient evidence of: (i) the date(s) of purchase(s), (ii)
the purchase price(s), (iii) the date(s) of sale(s), (iv) the
sale price(s), and (v) the number of shares of stock purchased
or sold on such date(s) and at such price(s). Any Request for
Allowance filed on behalf of a class of holder of Class 7B
Claims or by the representative of the Old and Cold Holders
shall be accompanied by evidence sufficient to allow the
Arbitrator described below to determine the basis for an award
with respect to allowance and/or allocation of the Class 7B
Claims contained in such class.
(C) NO PRIORITY; NO AUTOMATIC ALLOWANCE. The filing of a
Request for Allowance will not automatically result in the
allowance of the Class 7B Claim described therein. No Allowed
Class 7B Claim shall be afforded any priority over any other
Allowed Class 7B Claim in distribution. All Claims for which a
Request for Allowance is filed shall be subject to objection
and the allowance and allocation process in accordance with
the procedures established by the Trustees.
(D) FORWARDING REQUESTS FOR ALLOWANCE. As soon as practicable
after April 9, 1999, the Reorganized Debtor shall cause the
Claims Center to forward copies of all Requests for Allowance
filed on behalf of claimants asserting a right to be included
in Class 7B to the Trustees, c/o the Class 7B claims
administrator selected by the Securities Claimants' Committee
(the "CLASS 7B CLAIMS ADMINISTRATOR"). Prior to or on the
Confirmation Date, the Securities Claimants' Committee
selected the Class 7B Claims Administrator and provided notice
of the selection to the Debtor, the United States trustee,
counsel for the Unsecured Creditors' Committee, and counsel
for the Equity Committee.
6.02 SELECTION OF ARBITRATOR. Prior to or on the Confirmation Date, the
Securities Claimants' Committee shall have (i) selected an arbitrator (the
"ARBITRATOR") to serve in connection with allowance of Class 7B Claims and the
allocation of the Trust Assets among the various classes of claimants
represented in class actions which were pending against the Debtor on the
Petition Date and other holders of Allowed Claims in Class 7B, and (ii) provided
notice of the selection to the Debtor, the United States trustee, counsel for
the Unsecured Creditors' Committee, and counsel for the Equity Committee. At
confirmation of the Plan, the selection of the Arbitrator was presented to and
approved by the Court. The reasonable expenses of the Arbitrator as well as such
fees as have been agreed upon between the Arbitrator and the Trustees in writing
shall be paid first from the $250,000.00 of funds provided by Section 5.05 of
the Plan for the fees and costs incurred in connection with the administration
of the Trust, and, if such funds have been exhausted, then from the Trust
Assets. The arrangements relating to compensation and reimbursement of the
Arbitrator were presented to and approved by the Court at the hearing on
confirmation of the Plan.
6.03 ALLOWANCE/ALLOCATION/ARBITRATION PROCEDURES. Within fifteen (15)
days of the Confirmation Date, the Trustees shall establish: (i) a procedure for
resolving, on a consensual basis, the allowance of Class 7B Claims and
allocation of Trust Assets among holders of the Allowed Class 7B Claims, and
(ii) a process for the arbitration of allowance of Class 7B Claims and
allocation of Trust Assets among holders of the Allowed Class 7B Claims in the
event that there is no resolution on a consensual basis. If the Trustees
determine that the services of a mediator (a "MEDIATOR") would be of assistance
in the efforts to attain a consensual allowance and allocation, they may engage
a Mediator for that purpose.
(A) CONSENSUAL ALLOWANCE AND ALLOCATION. If, as a result of
the efforts of the Trustees, a Mediator if any, and any
claimants who indicated on their Requests for Allowance a
desire to provide input regarding a consensual allowance, a
proposal with respect to a consensual allowance of Class 7B
Claims and allocation of Trust Assets on account of such
Claims is accepted by a unanimous vote of the Trustees then in
office, in accordance with procedures adopted by the Trustees,
then the agreement shall be submitted by the Trustees to the
Court for approval, upon such notice as the Court shall order.
(B) NO CONSENSUS; ARBITRATION. If, on or before May 14, 1999,
or such later date as the Trustees shall establish, no motion
is filed with the Court seeking approval of a consensual
allowance of Class 7B Claims and allocation of Trust Assets on
account of such Claims, then an arbitration of any unresolved
issues relating to the allowance of Claims in Class 7B and the
allocation of the assets of the Trust shall be conducted by
the Arbitrator as soon as practicable, in accordance with such
rules as the Trustees shall establish. The arbitration shall
be completed on or before July 31, 1999.
(I) BINDING ARBITRATION. The arbitration shall be
binding in nature, and the only grounds of any
application to vacate or modify any decision or award
of the Arbitrator shall be that the Arbitrator was
other than a neutral party, that the award was
obtained by fraud, or that the award constituted an
abuse of discretion or violated public policy.
(II) POST-AWARD PROCEEDINGS. Any application to
vacate or modify an award of the Arbitrator shall be
only to the Court, and any notice of appeal from an
such award must be filed within fourteen (14) days
after the Arbitrator shall have provided a copy of
his award to the Trustees and any party to the
arbitration, via facsimile to each of the Trustees
and via overnight delivery service in a method
requiring a receipt therefor or via certified mail
return receipt requested to any other party to the
arbitration. In the event such an application is
filed, with respect thereto the Arbitrator may,
utilizing Trust Assets, engage counsel to defend the
award in connection with any such application.
(III) EXPENSES OF POST-AWARD PROCEEDINGS. A party
filing an application to vacate or modify the award
of the Arbitrator shall be responsible for his, her,
or its own costs, expenses and attorneys' fees. In
addition, if an application is unsuccessful in that
the party appealing the award does not obtain a
modification or the vacation of the award of the
Arbitrator, the party making the application shall
bear all expenses of the application, including the
reasonable fees and expenses incurred in connection
therewith by the Arbitrator.
6.04 DISTRIBUTION. The Trustees shall distribute the assets of the
Trust then held in the Trust, net of costs and expenses properly chargeable to
the Trust Assets under the Plan or this Agreement, as soon as practicable after
either the award of the Arbitrator or order of the Court approving a consensual
allocation of assets has become final and not subject to modification, reversal
or appeal, and shall make such distribution in accordance with such arbitration
award or such order of the Court. If, subsequent to such distribution, the Trust
shall acquire additional Trust Assets, then as soon as practicable after receipt
by the Trust, the Trustees shall distribute those additional Trust Assets, net
of costs and expenses properly chargeable to the Trust Assets under the Plan or
this Agreement, (including net of attorneys' fees and costs incurred in
connection with obtaining such additional assets) according to the same
allocation determined previously by consensus or arbitration, as the case may
be. With respect to any distribution of the Trust Assets to Allowed Class 7B
Claims which are included within a class action against the Debtor which was
pending on the Petition Date, the Trustees shall make such distribution by
delivering it to an escrow account designated by lead counsel for that class in
such class action and such distribution shall remain in that escrow account
until such time as (i) such lead counsel has been able to apply to the court in
which the respective class action is pending as to the matter of a method of
final distribution and an award of attorneys' fees and costs, and (ii) any order
on such application has become final. Attorneys for the various Class 7B
claimants intend to apply, to the respective courts in which the respective
class actions are pending, for an award of attorneys' fees in an amount not to
exceed one-third of the amount allocated and distributed from the Trust to those
holders or the group of holders of Allowed Class 7B Claims who are actually
represented by the respective attorneys, provided that if a holder of an Allowed
Class 7B Claim is not a member of a class action or other group but is
represented individually on its separate claims, then attorneys' fees for such
individual representations will be pursuant to the respective retainer and fee
arrangements.
ARTICLE VII
GENERAL PROVISIONS
7.01 IRREVOCABILITY. The Trust is irrevocable. Neither the Debtor, nor
the Reorganized Debtor, nor its successors in interest, nor any Affiliates
thereof, hold or may hold any beneficial interest in the income or corpus of the
Trust.
7.02 TERMINATION.
(A) Following either (i) a final determination of the Company
KPMG Claims and other claims constituting Trust Assets,
whether by virtue of prosecution or settlement thereof, or
(ii) a decision by the Representatives not to take any action
with respect to the Company KPMG Claims and other claims
constituting Trust Assets, at such time as all Trust Assets,
including any and all sums resulting from prosecution or
settlement of the Company KPMG Claims or other claims
constituting Trust Assets, have been fully and finally
distributed, the Trustees shall apply to the Court for an
order of the Court terminating the Trust, upon such notice as
the Court shall order.
(B) Upon the Court's order terminating the Trust becoming
final, except to the extent otherwise provided in such order,
the Trust shall be terminated, and the Trustees shall be
discharged of all responsibilities with respect to the Trust.
7.03 SEVERABILITY. Should any provision of this Agreement be determined
to be unenforceable, such determination shall in no way limit or affect the
enforceability and operative effect of any and all other provisions of this
Agreement.
7.04 HEADINGS. The headings used in this Agreement are inserted for
convenience only and shall not affect the construction of any provision of this
Agreement.
7.05 AMENDMENT. When necessary to carry out the purposes of the Trust,
this Agreement may be amended only by an instrument signed by each of the
Trustees then in office; provided, however, that any such amendment must be
consistent with the Plan; and provided further, that such amendment shall become
effective only with the approval of the Court and after notice and a hearing as
the Court may direct.
7.06 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but which counterparts
together shall constitute but one and the same instrument.
7.07 SUCCESSORS AND ASSIGNS. The provisions of this Agreement shall be
binding upon and inure to the benefit of the Settlor, the Trust, and the
Trustees, and their respective successors and assigns, except that neither the
Settlor nor the Trust nor any Trustee may assign or otherwise transfer any of
his, her, or its rights or obligations under this Agreement.
7.08 GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of ____________.
7.09 NO ADVERSE ACTION. No Trustee shall take any action that will
adversely affect the qualification of the Trust as a "Designated Settlement
Fund" within the meaning of Section 468B(d)(2) of the Internal Revenue Code.
IN WITNESS WHEREOF, the Settlor and the Initial Trustees have caused
this Agreement to be duly executed by them or their respective authorized
officers.
SETTLOR:
DATED:____________ MERCURY FINANCE COMPANY,
INC.
BY:_________________________
TITLE:________________________
TRUSTEES:
DATED:____________ SHRINERS HOSPITALS FOR
CHILDREN
BY:__________________________
TITLE:_________________________
DATED:____________ MINNESOTA STATE BOARD OF INVESTMENT
BY:___________________________
TITLE:_________________________
DATED:____________
------------------------------
XXXXXX XXXXXXXX
BY:___________________________
TITLE:_________________________
DATED:____________ X. XXXX PRICE
BY:___________________________
TITLE:_________________________
DATED:____________
------------------------------
XXXXXXX XXXXXXXXX
BY:___________________________
TITLE:_________________________
DATED:____________ XXXXX XXXXXX
BY:___________________________
TITLE:_________________________
DATED:____________ XXXXX X. XXXXX
BY:___________________________
TITLE:_________________________
