LIQUIDATING TRUST AGREEMENT relating to PRICE COMMUNICATIONS CORPORATION
relating
to
PRICE
COMMUNICATIONS CORPORATION
LIQUIDATING
TRUST AGREEMENT (this “Agreement”),
dated
as of August 6, 2007 (the “Effective
Date”),
between Price Communications Corporation, a New York corporation (“the
Company”),
and
PCC Liquidation LLC, a New York limited liability company, as Trustee (the
“Trustee”).
RECITALS
A. The
Company filed its certificate of dissolution with the Secretary of State of
the
State of New York on March 12, 2007.
B. The
Company currently has no operating assets, and its primary assets are cash,
marketable securities and the common stock of Verizon Communications Inc.
(“VCI
Stock”)
issued
in connection with the exchange of the Company’s limited partnership interest in
Verizon Wireless of the East LP.
C. On
or
about August 8, 2007 or such other date as determined by the board of directors
of the Company (the “Board”),
the
Company expects to distribute to its shareholders of record as of the Record
Date (as defined herein) (the “Shareholders”)
the
Company’s VCI Stock and remaining cash, less approximately $28,000,000 (as was
determined by the Board) that will be applied to or reserved for actual or
contingent liabilities of the Company, as a distribution pursuant to the
Company’s plan of reorganization within the meaning of Section 368(a)(2)(G) of
the Internal Revenue Code of 1986, as amended (the “Code”).
D. The
Company has established the close of business on August 7, 2007 as the record
date for such distribution to the Shareholders (the “Record
Date”),
at
which time the Company will close its share transfer books and discontinue
recording share transfers.
E. Immediately
following such distribution to the Shareholders, the Company will deposit into
a
liquidating trust (the “Trust”)
approximately $28,000,000 (as was determined by the Board) to provide for its
actual and contingent liabilities, subject to and in accordance with this
Agreement.
F. The
Shareholders will be the beneficiaries of the Trust (the “Beneficiaries”)
and,
if any assets deposited into the Trust are not actually required to pay the
Company’s liabilities, these assets will be distributed to the Beneficiaries at
one or more later dates in accordance with this Agreement. Beneficial Interest
(as defined herein) in the Trust will be transferable only by will, intestate
succession or operation of law.
AGREEMENT
1. Establishment
of Trust.
1.1 On
August
8, 2007, following the distribution to the Shareholders, the Company will assign
and transfer to the Trustee all of the Company’s assets and rights of every
kind, and the Trustee shall hold those assets and rights, together with any
income earned thereon, and all other property of the Company that may come
into
their possession (collectively, the “Trust
Property”),
in
trust for the benefit of the Beneficiaries, but subject to all of the Company’s
liabilities (“Claims”).
The
sole purpose of this Trust is to hold the Trust Property, pay all Claims that
the Trustee determines appropriate, defend against, litigate, settle or
otherwise dispose of any other Claims, and pay over and distribute to the
Beneficiaries any portion of the Trust Property remaining after the payment
of
all Claims, and the Trust shall not have any power to engage in any trade or
business or any other activity except as specifically provided in this
Agreement. The name of the Trust shall be “Price Communications Corporation
Liquidating Trust”.
1.2 It
is
intended that the granting, assignment and conveyance of the Trust Property
by
the Company to the Trustee pursuant hereto shall be treated for federal and
state income tax purposes as if the Trustee distributed the Trust Property
directly to the Shareholders and the Shareholders then transferred the Trust
Property to the Trust. It is further intended that, for federal, state and
local
income tax purposes, the Trust shall be treated as a liquidating trust under
Treasury Regulations Section 301.7701-4(d) and any analogous provision of state
or local law, and the Shareholders shall be treated as the owners of their
respective share of the Trust pursuant to Sections 671 through 679 of the Code
and any analogous provision of state or local law and shall be taxed on their
respective share of the Trust’s taxable income (including both ordinary income
and capital gains) pursuant to Section 671 of the Code and any analogous
provision of state or local law. The Trustee shall file all tax returns required
to be filed with any governmental agency consistent with this position,
including, but not limited to, any returns required of grantor trusts pursuant
to Treasury Regulations Section 1.671-4(a).
2. Powers
and Duties of the Trustee.
2.1 The
Trustee shall hold, manage, invest and reinvest the Trust Property, receive
the
income therefrom, and make such payments of the principal and income as it
may,
in its absolute discretion, determine proper to carry out the purpose of the
Trust.
2.2 The
Trustee shall have all such power and authority as it may determine appropriate
to carry out its obligations under this Agreement, including, but not limited
to, the power and authority:
(a) to
pay,
or defend, litigate, arbitrate, compromise, or settle, any Claim, and, in its
absolute discretion, to make all determinations necessary in connection with
any
Claim;
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(b) to
engage
professionals, including attorneys, accountants, investment advisors and others
(for the purpose of any litigation or otherwise) and to pay to those
professionals, out of the Trust Property, reasonable compensation and
reimbursement of expenses, it being agreed that the advice or opinion of such
professionals shall be full and complete personal protection to the Trustee
in
respect of any action taken or suffered by it in good faith and in reliance
on,
or in accordance with, such advice or opinion;
(c) to
hold
all or part of the Trust Property uninvested;
(d) to
deposit moneys in FDIC or FSLIC insured demand deposit accounts at any bank
or trust company and to invest the Trust Property in (and only in) (i) debt
securities issued by the United States of America or by any agency or
instrumentality of the United States of America with a maturity of twelve months
or less, (ii) certificates of deposit issued with a maturity of twelve
months or less by banks that are members of the Federal Reserve System having
a
capital stock and surplus aggregating at least $100,000,000, (iii) commercial
paper rated no less than A-1 or P-1, or (iv) money market funds investing in
securities described in the preceding clauses;
(e) to
exercise any right incident to any securities or other property held by the
Trust at any time;
(f) to
authorize any person or entity to act with respect to any specified transaction
or transactions, to sign a particular check or checks, and to execute any other
instruments in their name or on behalf of the Trust;
(g) to
prepare and file all tax returns required to be filed with any governmental
agency, including, but not limited to, any returns required of grantor trusts
pursuant to Treasury Regulations Section 1.671-4(a); and
(h) to
take
all such other action, and execute and deliver all such documents and
agreements, as it may determine necessary or appropriate to carry out its
responsibilities under this Agreement.
2.3 The
Trustee shall maintain records and books of account relating to the Trust
Property and shall provide the Beneficiaries with all necessary tax
information.
2.4 The
Trustee may rely upon, and shall be protected in acting or refraining from
acting in reliance upon, any certificate, opinion, statement, instrument or
report believed by them to be genuine and to have been signed or presented
by
the proper person or persons.
2.5 The
Trustee shall perform its obligations under this Agreement with the same degree
of care and skill as a prudent person would exercise under the circumstances
in
the conduct of his, her or its own affairs. The Trustee shall not commingle
any
of the Trust Property with its own property or the property of any other
person.
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2.6 The
Trustee shall not be liable for any damages for any error of business judgment
or with respect to any action taken or omitted to be taken by it in its capacity
as a Trustee, unless it shall be ultimately determined by a final,
non-appealable judgment of a court of competent jurisdiction that the Trustee
acted with willful misconduct, knowingly and intentionally committed in bad
faith, in ascertaining the pertinent facts or in performing any of its rights,
powers or duties.
2.7 The
Trustee shall be indemnified from the Trust Property, and held harmless, from
and against any loss, liability, cost, damage or expense (including, without
limitation, amounts paid in satisfaction of judgments, in compromise or as
fines
and penalties, and counsel fees and disbursements, reasonably incurred by the
Trustee in connection with the defense or disposition of any action, suit or
other proceeding by the Trust or any other person in which the Trustee may
be
involved or with which the Trustee may be threatened while in office or
thereafter) that it may incur or sustain in the performance of any of its powers
and duties under this Agreement or by reason of being or having been a Trustee,
except to the extent that it is ultimately determined by a final, non-appealable
judgment of a court of competent jurisdiction that the liabilities and expenses
were incurred or sustained as a result of the Trustee’s willful misconduct,
knowingly and intentionally committed in bad faith. Persons dealing with Trustee
shall look only to the Trust Property to satisfy any liability incurred by
the
Trustee to such person in carrying out the terms of this Trust, and the Trustee
shall have no personal or individual obligation to satisfy any such liability.
All of the Trustee’s rights of indemnification provided for in this Agreement
shall survive the resignation of the Trustee, its replacement by a successor
Trustee, the termination of this Agreement, and any other event that occurs
after the date hereof.
2.8 To
the
fullest extent permitted by law, the Trustee shall be advanced from out of
the
Trust Property, in advance of the final disposition of any action, suit or
other
proceeding, any expenses incurred by the Trustee in connection with such action,
suit or other proceeding; provided, however, that the Trustee will return any
amounts so advanced from the Trust Property to the extent that it is ultimately
determined by a final, non-appealable judgment of court of competent
jurisdiction that the Trustee was not entitled to receive such amounts advanced.
3. Concerning
the Trustee.
3.1 The
Trustee shall not be required to give bond or security in respect of their
execution or performance of this Agreement.
3.2 The
Trustee may resign as such at any time by giving written notice to the
Beneficiaries holding Units (as defined herein) representing an aggregate of
at
least a majority of the total Beneficial Interest in the Trust at their
respective addresses as they appear on the records of the Company on the Record
Date. Such resignation shall become effective on the earlier of the day
specified in such notice or upon the appointment of such Trustee’s successor and
such successor’s acceptance of such appointment. The Trustee may be removed at
any time, with or without cause, by Beneficiaries having an aggregate Beneficial
Interest of at least a majority. All obligations of the Trustee hereunder shall
cease and terminate on the effective date of its resignation and its sole
responsibility thereafter shall be to hold the Trust Property for a period
of
thirty (30) calendar days following the effective date of resignation, at which
time, if a successor Trustee shall have been appointed and have accepted such
appointment in a writing to the Beneficiaries, then, upon written notice thereof
given by a representative of the Beneficiaries to the resigning Trustee, the
resigning Trustee shall deliver the Trust Property to the successor Trustee.
If
a successor Trustee shall not have been appointed within a thirty (30) calendar
day period from the predecessor Trustee's resignation, for any reason
whatsoever, the resigning Trustee shall deliver the Trust Property to a court
of
competent jurisdiction in the county in which the Trust Property is there being
held and give written notice of the same to the parties hereto. The resigning
Trustee shall be entitled to payment of any unpaid fees (which shall be
pro-rated as of the effective date of the resignation) and expenses and to
reimbursement from the Trust Property for any expenses incurred in connection
with the transfer of the Trust Property pursuant to and in accordance with
the
provisions of this section.
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3.3 Should
at
any time the Trustee resign or be removed, die, become mentally incompetent
or
incapable of action (as determined by the Beneficiaries holding Units
representing an aggregate of at least a majority of the total Beneficial
Interests in the Trust), or be adjudged bankrupt or insolvent, a vacancy shall
be deemed to exist. The Beneficiaries holding an aggregate Beneficial Interest
of at least one-third may call a meeting to appoint a successor Trustee by
the
affirmative vote of Beneficiaries holding a majority of the Beneficial Interest
represented at the meeting.
3.4 Any
successor Trustee shall execute and deliver an instrument accepting the
appointment, the terms and conditions of which shall be the same as those
contained in this Agreement, and the successor, without further act, shall
have
rights, powers, duties and obligations of a Trustee under this
Agreement.
3.5 The
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 them to be genuine and to have
been signed or presented by the proper party or parties.
3.6 No
successor Trustee shall be in any way responsible for the acts or omissions
of
any Trustee in office prior to the date on which he, she or it becomes a
Trustee.
4. Trustee’s
Compensation.
The
Trustee shall be compensated at a rate of $700,000 per annum, payable monthly,
for serving as trustee under the Trust, of which $400,000 shall be paid to
Xxxxxx Xxxxx and $300,000 shall be paid to Xxx X. Xxxxxxxx, as members of the
Trustee. The Trustee shall be entitled to reimbursement from the Trust Property
for all such compensation and for all of its out-of-pocket expenses incurred
in
acting as Trustee under this Agreement. The compensation of any successor
Trustee shall be determined by Beneficiaries holding Units representing an
aggregate of at least two-thirds of the total Beneficial Interests in the
Trust.
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5. Beneficiaries.
5.1 Payments.
The
Trust Property, net of any amounts used to pay Claims or reserved with respect
to payment of Claims then pending, shall be paid by the Trustee to the
Beneficiaries from time to time based on the Trustee’s determination, in its
sole discretion, that the amount held by the Trustee exceeds the amount required
to discharge all
pending and future Claims. All distributions to the Beneficiaries shall be
made
in accordance with Section 5.2.
5.2 Beneficial
Interests.
(a) Each
Beneficiary’s proportionate share of the Trust Property (“Beneficial
Interest”)
shall
be initially determined by the ratio of the number of shares of common stock
of
the Company held by the Beneficiary on the close of business on the Record
Date
over the total number of Shares of the Company issued and outstanding on such
Record Date, as evidenced by a certified copy of the Company’s Shareholder list
as of the Record Date. The Company will deliver such a certified copy of its
Shareholder list to the Trustee within a reasonable time after such date. For
ease of administration, the Trustee shall express the Beneficial Interest of
each Beneficiary in terms of units (“Units”).
Each
record owner of the Shares of the Company at the Record Date shall be entitled
to receive one Unit in cancellation of each such Share.
(b) If
any
conflicting claims or demands are made or asserted with respect to the ownership
of any Units, or if there should be any disagreement between the transferees,
assignees, heirs, representatives or legatees succeeding to all or part of
the
interest of any Beneficiary resulting in adverse claims or demands being made
in
connection with such Units, then, in any of such events, the Trustee shall
be
entitled, at its sole election, to refuse to comply with any such conflicting
claims or demands. In so refusing, the Trustee may elect to make no payment
or
distribution with respect to such Units, or to make such payment to a court
of
competent jurisdiction or an escrow agent, and in so doing the Trustee shall
not
be or become liable to any of such parties for its failure or refusal to comply
with any of such conflicting claims or demands, nor shall the Trustee be liable
for interest on any funds which they may so withhold. The Trustee shall be
entitled to refrain and refuse to act until either (i) the rights of the adverse
claimants have been adjudicated by a final, non-appealable judgment of a court
of competent jurisdiction, (ii) all differences have been adjusted by valid
written agreement between all of such parties, and the Trustee shall have been
furnished with an executed counterpart of such agreement, or (iii) there is
furnished to the Trustee a surety bond or other security satisfactory to the
Trustee, as it shall deem appropriate, to fully indemnify it as between
all
conflicting claims or demands.
5.3 Rights
of Beneficiaries.
Each
Beneficiary shall be entitled to participate in the rights and benefits due
to a
Beneficiary hereunder according to his, her or its Beneficial Interest. Each
Beneficiary shall take and hold the same subject to all the terms and provisions
of this Agreement. The interest of the Beneficiary hereby is declared and shall
be in all respects personal property and, upon the death of an individual
Beneficiary, his, her or its Beneficial Interest shall pass as personal property
to his, her or its legal representative and such death shall in no way terminate
or affect the validity of this Agreement. A Beneficiary shall have no title
to,
right to, possession of, management of, or control of, the Trust Property,
except as herein expressly provided. No
widower, widow, heir, or devisee of any person who may be a Beneficiary shall
have any right of dower, homestead, or inheritance, or of partition, or of
any
other right, statutory or otherwise, in any property forming a part of the
Trust
Property, but the whole title to all the Trust Property shall be vested in
the
Trustee and the sole interest of the Beneficiaries shall be the rights and
benefits given to such Persons under the Agreement.
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5.4 Trustee
as Beneficiary.
The
Trustee, either individually or in a representative or fiduciary capacity,
may
be a Beneficiary to the same extent as if he, she or it were not a Trustee
hereunder and have all the rights of a Beneficiary, including, without
limitation, the right to receive distributions, to the same extent as if he,
she
or it were not a Trustee hereunder.
5.5 Reports
to Beneficiaries.
(a) As
soon
as practicable after the end of each fiscal year of the Trust and upon
termination of the Trust, but in any event within 90 days after each such
event, the Trustee shall submit a written report and account to the
Beneficiaries showing (i) the assets and liabilities of the Trust at the
end of such fiscal year or upon such termination and the receipts and
disbursements of the Trustee for such period, prepared in accordance with
generally accepted accounting principles, (ii) any changes in the Trust
Property not previously reported, (iii) statements of cash flow for such
fiscal year and (iv) any action taken by the Trustee in the performance of
its duties that it has not previously reported and which, in the opinion of
the
Trustee, materially affects the Trust Property.
(b) If
a
material event relating to the Trust’s assets has occurred, the Trustee shall
submit a written report to the Beneficiaries describing such event promptly
following the occurrence thereof. The occurrence of a material event will be
determined solely by the Trustee or as may be required by the rules and
regulations promulgated by the Securities and Exchange Commission.
(c) As
soon
as practicable after the close of each fiscal year, the Trustee shall supply
the
Beneficiaries a statement setting forth the amount of Trust taxable income
that
the Beneficiaries should include in their federal income tax returns.
6. Assignment
of Right to Distributions.
No
Beneficiary may assign or otherwise transfer any right to distributions under
this Agreement or any other rights under this Agreement, other than by will,
intestate succession or operation of law. The Trustee will not take any action
to facilitate or encourage any trading in the Beneficial Interests or in any
instrument tied to the value of the Beneficial Interests. No transfer, by
operation of law, of the right to distributions or other rights shall operate
to
terminate the Trust under this Agreement or entitle any successor or transferee
of the Beneficiary to an accounting or to the transfer to it of legal title
to
any part of the Trust Property.
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7. Term;
Termination.
7.1 The
Trust
shall commence, and this Agreement shall become effective, at such time as
any
asset of the Company is first deposited into the Trust in accordance with the
terms hereof.
7.2 The
Agreement and the Trust created hereby shall terminate upon the earlier of
September 15, 2010 or when all expenses and/or contingent liabilities relating
to the dissolution and winding up of the Company are finally determined and
paid, and all of the property constituting the Trust Property has either expired
or been sold, exchanged or otherwise disposed of by the Trustee. The life of
the
Trust may, however, be extended, in the Trustee’s discretion, to beyond
September 15, 2010 if either the Trustee is then currently engaged in the
determination, defense or settlement of a claim by or against the Company or
the
Trust, or an audit of the Company’s tax returns is commenced and the statute of
limitations for making any claims for taxes against the Company or the Trust
is
extended by either a voluntary agreement or a deficiency
determination.
7.3 Upon
the
distribution of all the Trust Property, the Trustee shall have no further duties
or obligations hereunder other than as set forth in Section 2.2(g).
8. Miscellaneous.
8.1 This
Agreement is not intended to create and shall not be interpreted as creating
an
association, corporation, partnership or joint venture of any kind; it is
intended as a trust, to be governed and construed in all respects as a trust
without transferable shares.
8.2 The
Company shall not have or incur any obligation or liability to any other person
on account of any act or failure to act by the Trustee or any other
persons.
8.3 The
Trustee shall not incur any obligation or liability to any other person in
connection with the transfer by the Company to the Trustee of the Trust
Property, and no delegation of the duty of performance to the Trustee or
assumption of liabilities of the Company by the Trustee is intended by this
Agreement.
8.4 This
Agreement contains a complete statement of all of the arrangements between
the
parties with respect to its subject matter and no amendment, termination or
waiver of any provision of this Agreement shall be effective unless in writing
and signed by the parties to this Agreement.
8.5 Except
as
provided in this Agreement, the rights and obligations of the Trustee under
this
Agreement shall not be assignable, voluntarily, involuntarily or by operation
of
law, and any purported assignment shall be void.
8.6 Any
notice or other communication hereunder 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
at
his address last known to the person giving such notice.
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8.7 This
Agreement shall be governed by the law of the State of New York applicable
to
Agreements made and to be performed in New York.
[END
OF
TEXT]
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IN
WITNESS WHEREOF, the undersigned have executed or caused to be executed this
Agreement as of the date set forth below.
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Dated:
August 6, 2007
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PRICE
COMMUNICATIONS CORPORATION
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By:
/s/ Xxxxxx
Xxxxx
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Name:
Xxxxxx Xxxxx
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Title:
President, Chief Executive Officer and Treasurer
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Dated:
August 6, 2007
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PCC
LIQUIDATION LLC, as Trustee
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By:
/s/ Xxxxxx
Xxxxx
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Name:
Xxxxxx Xxxxx
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Title:
Member
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By:
/s/ Xxx X.
Xxxxxxxx
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Name:
Xxx X. Xxxxxxxx
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Title:
Member
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