Exhibit 10.11
EASTWIND STOCKHOLDER'S TRUST
This Eastwind Stockholder's Trust (the "Trust") is made the 7th day of
December 1998, by and between THE EASTWIND GROUP, INC., a Delaware corporation
(the "Company"), and XXXX X. XXXXXXXX, an individual, acting as Trustee (the
"Trustee") of the Trust.
BACKGROUND
Pursuant to the Share Exchange Agreement between the Company and ConMat
Technologies, Inc. ("ConMat") the Company has received 1,000,000 shares of
ConMat Common Stock ("ConMat Common Stock" or the "Stock"). The Board of
Directors of the Company has authorized and declared the distribution of the
ConMat Common Stock to its stockholders as a dividend ("Dividend") Pursuant to
the Share Exchange Agreement, ConMat has agreed to register the ConMat Common
Stock for resale under the Securities Act of 1933, as amended (the "Act").
Actual payment of the ConMat Common Stock is conditioned upon the effectiveness
of such registration statement under the Act ("Effective Date"), as well as the
Company having sufficient surplus as required under Section 170 of the Delaware
Corporation Law, and having obtained all required consents of any third parties
to the payment of the Dividend.
Pending payment of the Dividend, the ConMat Common Stock shall be
assigned and delivered by the Company to the Trust according to the terms and
conditions contained herein to be held for the benefit of the Company's
stockholders.
TRUST AGREEMENT
NOW THEREFORE, intending to be legally bound hereby, the parties hereto
agree as follows:
1. Assignment of ConMat Common Stock. At the time of execution and
delivery of this Trust, the Company has assigned and delivered to the Trustee
the stock certificate representing the ConMat Common stock.
2. Ownership Rights; Trustee's Powers.
2.1 The ConMat Common Stock shall be held in the Trust by the
Trustee for the sole and exclusive benefit of the Company's common stockholders
pursuant to all of the terms and conditions hereof. All of the ownership rights
of the Company in connection with the ConMat Common Stock shall be held by the
Trustee. The ownership rights shall include any voting rights and rights to any
distributions on account of and attributable to the Stock. The Company hereby
grants to Trustee an irrevocable proxy to vote the Stock.
2.2 The Trustee shall have power to do all such other things
and execute all such instruments as are necessary, proper or desirable in order
to carry out the above-referenced activities of the Trust, including, but not
limited to, delivery to the Trustee of a written proxy in favor of Trustee to
vote the Stock at any Company stockholder's meeting or action where the consent
of stockholders is required.
2.3 The Trustee shall be entitled, from time to time, to
collect and receive all dividends and all other distributions in respect of the
ConMat Common Stock, whenever paid or made ("Distributions"). Said Distributions
shall be received by, the Trustee in Trust for the benefit of the Company's
stockholders and be released as provided in Section 4 herein. If the Company
receives any Distributions, the Company will immediately assign, transfer and
deliver such Distributions to the Trustee.
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3. Prohibition on Transfer. Except as specifically provided herein, all
Trust assets, including the ConMat Common Stock and any Distributions shall not
be sold, pledged, hypothecated, or transferred, directly or indirectly, by the
Trustee, and shall be released by the Trustee only as prescribed in Sections 4
or 5 herein.
4. Release of Trust Assets. Upon receipt by the Trustee of an
appropriate instruction from the Company's Board of Directors, the Trustee shall
assign and deliver the ConMat Common Stock and all other Distributions to the
Company's transfer agent or to the Company's stockholders in payment of the
Dividend. Prior to releasing the Stock or the Distributions, the Trustee may
require appropriate certifications from the Company.
5. Termination. This Trust shall be terminated upon the earlier
occurrence of the following:
(a) the receipt of notice by the Trustee from the Company's
Board of Directors authorizing the release of the Stock and Distributions in
payment of the Dividend as prescribed in Section 4 herein; or
(b) the receipt of notice by the Trustee from the Company's
Board of Directors stating that the Effective Date has not Occurred by July 11
2000; or
(c) the receipt of a final Court order or upon the written
agreement by the Trustee and The Xxxx Company indicating that this Trust is a
Restricted Distribution as such term is defined under the Surety Agreement dated
March 10, 1995, from the Company in favor of The Xxxx Company.
If the Trustee receives notice pursuant to subparagraph (a), the Stock
and any Distributions shall be distributed as set forth in Section 4 hereof. If
the Trustee receives notice
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pursuant to subparagraphs (b) or (c) hereof, the Stock and any Distributions
shall be delivered to the Company by the Trustee.
6. Trustee's Duties and Obligations.
6.1 The duties and obligations of the Trustee shall be
determined solely by the express provisions of this Trust and the Trustee shall
not be liable for the performance of such duties and obligations, except as
specifically set forth in this Trust.
6.2 The Trustee shall not be responsible in any manner
whatsoever for any failure or inability of the Company, or any third party, to
perform or comply with any of the provisions of this Trust.
6.3 The Trustee shall not be liable for any error of judgment,
or any action taken or omitted to be taken hereunder, except in the case of his
gross negligence or willful misconduct, nor shall he be liable for the
misconduct of any employee or agent appointed by him who shall have been
selected with reasonable care.
7. Indemnification of Trustee. The Company agrees to indemnify the
Trustee and hold the Trustee harmless from any liability or expenses incurred
(including counsel fees) on the part of the Trustee arising out of or in
connection with the acceptance or administration by the Trustee of his duties
hereunder, including the fees, costs and expenses of defending himself against
any claims of liability hereunder.
8. Successor Trustee. In the event the Trustee is no longer able or
willing to serve, the Company shall have the exclusive right to appoint a
successor Trustee who shall be bound by the terms and conditions set forth
herein.
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9. UCC-1 Filing. The company hereby grants to the Trustee a security
interest in the Stock and Distributions to evidence this Trust. The parties
hereto shall file appropriate UCC-1 Financing Statements evidencing the Trust
arrangement created herein with the Secretary of the Commonwealth of
Pennsylvania and the County of Philadelphia, Pennsylvania.
10. Stockholders Benefit. The Trust is created to insure that the
ConMat Common Stock is available for distribution to the Company's stockholders
as a dividend following the Effective Date and is intended to presently and
immediately transfer a beneficial interest therein to such stockholders.
Creditors of the Company shall have no right or claim to any Trust assets
including the stock or any Distributions, and the Trustee shall take such action
as shall be necessary to protect the stockholders' interest in the Stock and any
Distributions. Any and all expenses incurred by the Trustee in communication
therewith, including attorneys' fees, may be charged against and satisfied from
the Stock or Distributions.
11. Notices. All notices required or permitted hereunder from either of
the parties hereto to the other must be in writing and sent by certified mail,
return receipt requested, postage prepaid or by overnight mail service with
receipt postage prepaid. Notice shall be addressed to the parties as follows:
To the Company:
The Eastwind Group, Inc.
000 Xxxxxx Xxxx
Xxxxxxxxxxxx, XX, 00000
Attn: Xx. Xxxxxxx X. Xxxxxx,
Senior Vice President
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To the Trustee:
Xx. Xxxx X. XxXxxxxx
0000 Xxxxxx Xxxxx Xxxxx
Xxxx Xxxxxxx, XX 00000
Either party may at any time, by notice given as aforesaid, change the address
to which notices shall be sent.
12. Binding Effect. This Trust shall inure to the benefit of and shall
be binding upon the respective heirs, personal representatives, successors and
legal assigns of the parties hereto.
13. Choice of Law. This Trust shall be construed in accordance with and
shall be governed by the laws of the state of Delaware without regard to its
conflict of law rules. Wherever possible, each provision of the Trust shall be
interpreted in such manner as to be effective and valid, but if any provision
shall be ineffective or invalid, such ineffectiveness or invalidity shall extend
only to the extent of such prohibition or invalidity, without invalidating the
remainder of such provision or the remaining provisions of this Trust.
14. Further Assurances. Each of the parties hereto shall hereafter
execute and deliver such further documents and instruments and do such further
acts and things as may be required or useful to carry out the intent and purpose
of this Trust and as are not inconsistent with the terms hereof.
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IN WITNESS WHEREOF, the parties hereto, have executed and delivered
this Trust the day and year above written.
THE EASTWIND GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx,
Senior Vice President
/s/ Xxxx X. XxXxxxxx
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XXXX X. XXXXXXXX,
Trustee
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