EXHIBIT 99.2
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TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST, effective as of 5:00 PM,
New York City time, May 27, 2005, by and among Fab Industries, Inc., a Delaware
corporation (the "Company") and Xxxxxx Xxxxxxxx, as trustee.
WHEREAS, the Company's Board of Directors (the "Board") and
the Company's stockholders have approved the dissolution of the Company pursuant
to a Plan of Liquidation (the "Plan");
WHEREAS, the Plan provides, among other things, that the Board
will cause the Company to sell or otherwise dispose of all of the assets of the
Company, wind up its affairs, pay or adequately provide for the payment of all
of its liabilities and distribute to or for the benefit of its stockholders all
of the Company's assets;
WHEREAS, the Plan provides that if it is not feasible for the
Company to make the final distribution to its stockholders of all of its assets
and properties by May 30, 2005, the Company shall be required to transfer all of
its assets and properties to a liquidating trust for the benefit of the
Company's stockholders;
WHEREAS, it is not feasible to make the final distribution of
all the Company's assets and properties to the Company's stockholders by May 30,
2005;
WHEREAS, the Board believes it to be in the best interest of
the Company to complete the liquidation of the Company by transferring all
remaining assets of the Company to a liquidating trust (the "Trust") with Xxxxxx
Xxxxxxxx serving as its initial trustee (the "Trustee"); and
WHEREAS, the Trustee shall administer the Trust pursuant to
the terms of this Agreement and, upon satisfaction of all liabilities and
obligations of the Company and the Trust, the Trustee shall distribute the
residue of the proceeds of the liquidation of the assets of the Company in
accordance with the terms hereof.
WHEREAS, pursuant to that certain Asset Purchase Agreement, by
and between the Company and SSJJJ Manufacturing, LLC, a Delaware limited
liability company (the "Buyer"), dated as of May 27, 2005 (the "Purchase
Agreement"), the Company will sell all of its assets (except Excluded Assets (as
defined in the Purchase Agreement)) and the Buyer will assume all of the
Company's obligations and liabilities on the closing of such transaction, which
closing will occur after May 27, 2005. Effective as of 5:00 PM, New York City
time, May 27, 2005, the Company will file a Certificate of Dissolution with the
State of Delaware and transfer and assign its interests and liabilities and
obligations (including any and all of the Company's rights and obligations under
the Purchase Agreement) to the Trustee and fulfill its obligations required in
order for the Trustee to execute this instrument (collectively, the "Company
Obligations");
NOW, THEREFORE, in consideration of the premises and other
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
ARTICLE I
NAMES AND DEFINITIONS
1.1 NAME. The Trust shall be known as the Fab Industries Trust.
1.2 DEFINED TERMS. For all purposes of this instrument, unless the
context otherwise requires:
(a) "Affiliate" of any Person means any entity that
controls, is controlled by, or is under common control with such Person. As used
herein, "control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of such entity,
whether through ownership of voting securities or other interests, by contract
or otherwise.
(b) "Agreement" shall mean this instrument as originally
executed or as it may from time to time be amended pursuant to the terms hereof.
(c) "Beneficial Interest" shall mean each Beneficiary's
proportionate share of the Trust Assets determined by the ratio of the number of
Units held by such Beneficiary to the total number of Units held by all
Beneficiaries.
(d) "Beneficiary" shall mean each holder of Units.
(e) "Liabilities" shall mean all of the Company's
unsatisfied debts, claims, liabilities, commitments, suits, indemnification
obligations in respect of its directors and officers (including those contained
in the Company's Certificate of Incorporation and its by-laws), other
obligations, whether contingent or fixed or otherwise (including, without
limitation, any costs and expenses incurred or to be incurred in connection with
the liquidation of the Company) and the Company Obligations.
(f) "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a limited liability company,
a trust, a joint venture, any unincorporated organization, or a government or
political subdivision thereof.
(g) "Record Date" shall mean May 27, 2005.
(h) "Retained Assets" shall mean all of the Company's right,
title and interest in, to and under, all of the Company's assets, including,
without limitation, its unsold properties, accounts receivable, cash,
securities, claims, causes of action, contingent claims and the Purchase
Agreement.
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(i) "Shares" shall mean the shares of common stock, $0.20
par value per share, of the Company.
(j) "Stockholders" shall mean the holders of record of the
outstanding Shares of the Company at the close of business on the Record Date.
(k) "Transfer Date" shall mean May 27, 2005.
(l) "Trust" shall mean the Trust created by this Agreement.
(m) "Trust Assets" shall mean all the property held from
time to time by the Trustee under this Agreement, which initially shall consist
of the Retained Assets (excluding any liquidating distributions declared, but
unpaid, having a record date prior to the Transfer Date), and in addition, shall
thereafter include all dividends, distributions, rents, royalties, income,
payments and recoveries of claims, proceeds and other receipts of, from, or
attributable to any assets held by the Trust, less any of the foregoing utilized
by the Trustee to pay expenses of the Trust, satisfy Liabilities or to make
distributions to the Beneficiaries pursuant to the terms and conditions hereof.
(n) "Trustee" shall mean the original Trustee under this
Agreement and any successors thereto, pursuant to and in accordance with the
terms of this Agreement.
(o) "Units" shall have the meaning given to such term in
Section 3.1(a).
ARTICLE II
GRANT TO AND NATURE OF TRANSFER
2.1 GRANT. The Company hereby grants, delivers, releases, assigns
and conveys to the Trustee, to be held in trust for the benefit of the
Beneficiaries of the Trust, all of the Company's right, title, interest in, to
and under, the Retained Assets, for the uses and purposes stated herein, subject
to the terms and provisions set out below, and the Trustee hereby accepts such
Retained Assets, subject to the following terms and provisions.
2.2 PURPOSE OF TRUST.
(a) The Trust is organized for the sole purpose of winding
up the Company's affairs and the liquidation of the Retained Assets with no
objective to continue or engage in the conduct of a trade or business, except as
necessary for the orderly liquidation of the Trust Assets and to effect the
transactions contemplated by the Purchase Agreement.
(b) The Retained Assets granted, assigned and conveyed to
the Trustee shall be held in the Trust, and the Trustee will (i) further
liquidate the Trust Assets as it deems necessary to carry out the purpose of the
Trust and facilitate distribution of the
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Trust Assets, (ii) allocate, protect, conserve and manage the Trust Assets in
accordance with the terms and conditions hereof, (iii) complete the winding up
of the Company's affairs, (iv) act on behalf of the Beneficiaries, and (v)
distribute the Trust Assets in accordance with the terms and conditions hereof.
(c) It is intended that for Federal, state and local income
tax purposes, the Trust shall be treated as a liquidating trust under Treasury
Regulation Section 301.7701-4(d) and any analogous provision of state or local
law, and the Beneficiaries shall be treated as the owners of their respective
share of the Trust pursuant to Sections 671 through 679 of the Internal Revenue
Code of 1986, as amended (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 Section 1.671-4(a) of the Income Tax
Regulations.
2.3 NO REVERSION TO THE COMPANY. In no event shall any part of the
Trust Assets revert to or be distributed to the Company.
2.4 INSTRUMENTS OF FURTHER ASSURANCE. The Company will, upon
reasonable request of the Trustee, execute, acknowledge, and deliver such
further instruments and do such further acts as may be necessary or proper to
carry out effectively the purposes of this Agreement, to confirm or effectuate
the transfer to the Trustee of any property intended to be covered hereby, and
to vest in the Trustee and its successors and assigns, the estate, powers,
instruments or funds in trust hereunder.
2.5 PAYMENT OF LIABILITIES. The Trustee, in its capacity as
Trustee hereunder and not in its individual capacity, hereby assumes all
Liabilities and agrees hereafter to cause the Trust to pay, discharge and
perform when due all of the Liabilities. Should any Liability be asserted
against the Trustee as the transferee of the Trust Assets or as a result of the
assumption made in this Section 2.5, the Trustee may use such part of the Trust
Assets as may be necessary in contesting any such Liability or in payment
thereof, but in no event shall the Trustee, Beneficiaries or agents of the Trust
be personally liable, nor shall resort be had to the private property of such
Persons, in the event that the Trust Assets are not sufficient to satisfy the
Liabilities.
ARTICLE III
BENEFICIARIES
3.1 BENEFICIAL INTERESTS.
(a) The Beneficial Interest of each Stockholder shall be
determined in accordance with a certified copy of the Company's stockholder list
as of the Record Date. The Company's transfer agent will deliver such a
certified copy of the Company's stockholder list to the Trustee within a
reasonable time after such date. The Trustee shall be entitled to rely and shall
be fully protected in relying upon the certified copy of the
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Company's stockholder list. For ease of administration, the Trustee shall
express the Beneficial Interest of each Beneficiary in terms of units ("Units").
Each record owner of Shares as of the close of business on the Record Date shall
receive one Unit for each Share then held of record. Each Beneficiary shall have
a pro rata interest in the Trust Assets equal to the number of Units held by
such owner divided by the total number of Units held by all Beneficiaries.
(b) On and after the Transfer Date, all outstanding Shares
shall automatically be deemed cancelled.
(c) The rights of Beneficiaries in, to and under the Trust
Assets and the Trust shall not be represented by any form of certificate or
other instrument, and no Beneficiary shall be entitled to such a certificate.
The Trustee shall maintain at its place of business a record of the name and
address of each Beneficiary and such Beneficiary's aggregate Units in the Trust.
(d) If any conflicting claims or demands are made or
asserted with respect to the ownership of any Units, or if there is 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 or to take any other action with respect thereto, nor shall the
Trustee be liable for interest on any funds which it may so withhold.
Notwithstanding anything to the contrary set forth in this Section 3.1(d), 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 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.
3.2 RIGHTS OF BENEFICIARIES. Each Beneficiary shall be entitled to
participate in the rights and benefits due to a Beneficiary hereunder according
to the Beneficiary's Beneficial Interest. Each Beneficiary shall take and hold
the same subject to all the terms and provisions of this Agreement. The interest
of each Beneficiary hereunder is declared, and shall be in all respects,
personal property and upon the death of an individual Beneficiary, the
Beneficiary's Beneficial Interest shall pass as personal property to the
Beneficiary's 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 Assets except
as expressly provided herein. 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
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or otherwise, in any property forming a part of the Trust Assets but the whole
title to all the Trust Assets shall be vested in the Trustee and the sole
interest of the Beneficiaries shall be the rights and benefits given to such
Persons under this Agreement.
3.3 LIMITATIONS ON TRANSFER OF INTERESTS OF BENEFICIARIES.
(a) THE BENEFICIAL INTEREST OF A BENEFICIARY MAY NOT BE
TRANSFERRED; PROVIDED THAT THE BENEFICIAL INTERESTS SHALL BE ASSIGNABLE OR
TRANSFERABLE BY WILL, INTESTATE SUCCESSION OR OPERATION OF LAW.
(b) Except as may be otherwise required by law, the
Beneficial Interests of the Beneficiaries hereunder shall not be subject to
attachment, execution, sequestration or any order of a court, nor shall such
interests be subject to the contracts, debts, obligations, engagements or
liabilities of any Beneficiary, but the interest of a Beneficiary shall be paid
by the Trustee to the Beneficiary free and clear of all assignments,
attachments, anticipations, levies, executions, decrees and sequestrations and
shall become the property of the Beneficiary only when actually received by such
Beneficiary.
3.4 TRUSTEE AS BENEFICIARY. The Trustee, either individually or
in a representative or fiduciary capacity, may be a Beneficiary to the same
extent as if it were not a Trustee hereunder and shall have all rights of a
Beneficiary, including, without imitation, to receive distributions, to the
same extent as if it was not the Trustee hereunder.
ARTICLE IV
DURATION AND TERMINATION OF THE TRUST
4.1 DURATION. The existence of the Trust shall terminate upon the
earliest of (i) the distribution of all the Trust Assets as provided in Section
5.7, or (ii) the expiration of a period of three years from the Transfer Date.
The Trust shall not in any event terminate pursuant to subparagraph (ii) of this
Section 4.1 prior to the date on which the Trustee is permitted to make a final
distribution in accordance with Section 5.7.
4.2 OTHER OBLIGATIONS OF TRUSTEE UPON TERMINATION. Upon
termination of the Trust, the Trustee shall provide for the retention of the
books, records, lists of holders of Units, certificates for Shares and files
which shall have been delivered to or created by the Trustee. At the Trustee's
discretion, all of such records and documents may be destroyed at any time after
seven years from the distribution of all the Trust Assets. Except as otherwise
specifically provided herein, upon the distribution of all the Trust Assets, the
Trustee shall have no further duties or obligations hereunder.
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ARTICLE V
ADMINISTRATION OF TRUST ASSETS
5.1 SALE OF TRUST ASSETS. Subject to the terms and conditions of
this Agreement, the Trust shall be subject to the terms and conditions of the
Purchase Agreement, and if the closing of such transaction is not consummated,
the Trustee may, at such times as the Trustee deems appropriate, collect,
liquidate, reduce to cash, transfer, assign, or otherwise dispose of all or any
part of the Trust Assets as it deems appropriate at public auction or at private
sale for cash, securities or other property, or upon credit (either secured or
unsecured as the Trustee shall determine). The Trustee shall make continuing
efforts to dispose of the Trust's assets, make timely distributions and not
unduly prolong the duration of the Trust.
5.2 EFFORTS TO RESOLVE CLAIMS AND LIABILITIES. Subject to the
terms and conditions of this Agreement, the Trustee shall make appropriate
efforts to resolve any contingent or unliquidated claims and outstanding
contingent Liabilities for which the Trust may be responsible, dispose of the
Trust Assets, make timely distributions and not unduly prolong the duration of
the Trust.
5.3 CONTINUED COLLECTION OF PROPERTY OF TRUST ASSETS. All property
that is determined to be a part of the Trust Assets shall continue to be
collected by the Trustee and held as a part of the Trust. The Trustee shall hold
the Trust Assets without being obligated to provide for or pay any interest
thereon to any Beneficiary, except to the extent of such Beneficiary's share of
interest actually earned by the Trust after payment of the Trust's liabilities
and expenses as provided in Section 5.5.
5.4 RESTRICTION ON TRUST ASSETS. The Trustee shall cause to be
distributed any assets prohibited by Revenue Procedure 82-58 (as amplified by
Revenue Procedure 91-15 and Revenue Procedure 94-45), as the same may be further
amended, supplemented, or modified, including, but not limited to, any listed
stocks or securities, any readily-marketable assets, any operating assets of a
going business, any partnership interest in a partnership that holds operating
assets, 50% or more of the stock of a corporation with operating assets, or any
unlisted stock of a single issuer that represents 80% or more of the stock of
such issuer; PROVIDED, HOWEVER, that the Trustee shall not permit any assets
subject to the Purchase Agreement to be distributed except in accordance with
the Purchase Agreement. The Trustee shall not retain cash in excess of a
reasonable amount to meet expenses, charges and obligations of the Trust, the
Trust Assets and all Liabilities but in no event shall any cash be distributed
prior to the Closing of the transactions contemplated by the Purchase Agreement.
5.5 PAYMENT OF EXPENSES AND LIABILITIES. The Trustee shall pay
from the Trust Assets all expenses, charges, and obligations of the Trust and of
the Trust Assets and all Liabilities and obligations which the Trust
specifically assumes and agrees to pay pursuant to this Agreement and such
transferee liabilities which the Trustee may be obligated to pay on behalf of
the Trust as transferees of the Trust Assets, including, but not limited to,
interest, penalties, taxes, assessments, and public charges of any kind or
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nature and the costs, charges, and expenses connected with or growing out of the
execution or administration of the Trust and such other payments and
disbursements as are provided in this Agreement or which may be determined to be
a proper charge against the Trust Assets by the Trustee.
5.6 INTERIM DISTRIBUTIONS. At such times as may be determined in
its sole discretion, the Trustee shall distribute, or cause to be distributed to
the Beneficiaries, in proportion to the number of Units held by each Beneficiary
on the record date for such distribution as determined by the Trustee in its
sole discretion, such cash or other property comprising a portion of the Trust
Assets as the Trustee may in its sole discretion determine may be distributed;
PROVIDED, HOWEVER, that the Trustee shall distribute, or cause to be
distributed, at least annually to the Beneficiaries all cash proceeds received
or resulting from the sale of the Trust Assets in excess of a reasonable amount
(as determined by the Trustee) to satisfy the Liabilities and expenses described
in Section 5.5, but in no event prior to the closing of the transaction
contemplated by the Purchase Agreement.
5.7 FINAL DISTRIBUTION. If the Trustee determines that the
Liabilities and all other claims, expenses, charges, and obligations of the
Trust have been paid or discharged, the Trustee shall, as expeditiously as is
consistent with the conservation and protection of the Trust Assets, distribute
the remaining Trust Assets, if any, to the Beneficiaries in proportion to the
number of Units held by each Beneficiary.
5.8 REPORTS TO BENEFICIARIES AND OTHERS.
(a) As soon as reasonably practicable after the Transfer
Date, the Trustee will mail to each Beneficiary a notice indicating how many
Units such person beneficially owns and the Trustee's address and other contact
information. If the trust is to hold assets for unlocated stockholders, due
notice has been given to such stockholders in accordance with local law. As soon
as practicable after the end of each tax year and after 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 taxable year or upon termination
and the receipts and disbursements of the Trustee for such taxable year or
period, prepared in accordance with generally accepted accounting principles,
(ii) any changes in the Trust Assets and Liabilities that have not been
previously reported, (iii) statements of cash flow for such taxable year, and
(iv) any action taken by the Trustee in the performance of its duties under this
Agreement that it had not previously reported, and which, in its opinion,
materially affects the Trust Assets or Liabilities.
(b) The tax year of the Trust shall end on December 31 of
each year.
(c) During the course of a tax year, whenever a material
event relating to the Trust's Assets occurs, the Trustee shall, within a
reasonable period of time after such occurrence, prepare and mail to the
Beneficiaries an interim report describing such event. The occurrence of a
material event need not be reported in an interim report if an annual report
pursuant to Section 5.8(a) will be issued at approximately the same time
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that such interim report would be issued and such annual report describes the
material event as it would be discussed in an interim report. 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.
(d) Title 12, Section 3585 of the Delaware Code shall apply
to the Trustee's reports pursuant to this Section.
5.9 FEDERAL INCOME TAX INFORMATION. As soon as practicable after
the close of each tax year, the Trustee shall mail to each Person who was a
Beneficiary during such year, a statement showing, on a per Unit basis, the
information necessary to enable a Beneficiary to determine its taxable income
(if any) from the Trust as determined for Federal income tax purposes. In
addition, after receipt of a request in good faith, the Trustee shall furnish to
any Person who has been a Beneficiary at any time during the preceding year, at
the expense of such Person and at no cost to the Trust, a statement containing
such further tax information as is reasonably requested by such Person.
5.10 BOOKS AND RECORDS. The Trustee shall maintain in respect of
the Trust and the holders of Units books and records relating to the Trust
Assets, income and liabilities of the 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 in accordance with this Article V and to comply with applicable
law. Such books and records shall be maintained on a basis or bases of
accounting necessary to facilitate compliance with the tax reporting
requirements of the Trust and the reporting obligations of the Trustee under
Section 5.8. Except as provided in Section 5.8, nothing in this Agreement
requires the Trustee to file any accounting or seek approval of any court with
respect to the administration of the Trust or as a condition for managing any
payment or distribution out of the Trust Assets. Beneficiaries, together holding
more than seventy-five percent of the Units shall, upon reasonable written
notice to the Company, have the right upon 30 days' prior written notice
delivered to the Trustee to inspect during normal business hours such books and
records (including financial statements); PROVIDED, that if so requested, such
Beneficiaries shall have entered into a confidentiality agreement satisfactory
in form and substance to the Trustee.
5.11 APPOINTMENT OF AGENTS, ETC.
(a) The Trustee shall be responsible for the general
policies of the Trust and for the general supervision of the activities of the
Trust conducted by all agents, advisors or managers of the Trust. The Trustee
shall have the power to appoint or contract with any Person or Persons as the
Trustee may deem necessary or proper for the transaction of all or any portion
of the activities of the Trust.
(b) The Trustee shall have the power to determine the terms
and compensation of any Person with whom it may contract pursuant to Section
5.11(a), subject to the provisions of Section 5.12.
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(c) The Trustee shall not be required to administer the
Trust as its sole and exclusive function and the Trustee may have other business
interests and may engage in other activities similar or in addition to those
relating to the Trust, including the rendering of advice or services of any kind
to investors or any other Persons and the management of other investments,
subject to the Trustee's obligations under this Agreement and applicable law.
5.12 FIDUCIARY DUTY.
(a) To the extent that, at law or in equity, the Trustee has
duties (including fiduciary duties) and liabilities relating thereto to the
Trust, the Beneficiaries or to any other Person, a Trustee acting under this
Agreement shall not be liable to the Trust, the Beneficiaries or to any other
Person for its good faith reliance on the provisions of this Agreement. The
provisions of this Agreement, to the extent that they restrict the duties and
liabilities of the Trustee otherwise existing at law or in equity are agreed by
the parties hereto to replace such other duties and liabilities of the Trustee.
(b) Unless otherwise expressly provided herein:
(i) whenever a conflict of interest exists or arises
between the Trustee or any of its Affiliates, on the one hand,
and the Trust or any Beneficiaries or any other Person, on the
other hand; or
(ii) whenever this Agreement or any other agreement
contemplated herein or therein provides that the Trustee shall
act in a manner that is, or provides terms that are, fair and
reasonable to the Trust, any Beneficiaries or any other
Person.
The Trustee shall resolve such conflict of interest, take such
action or provide such terms, considering in each case the relative interest of
each party (including its own interest) to such conflict, agreement, transaction
or situation and the benefits and burdens relating to such interests, any
customary or accepted industry practices, and any applicable generally accepted
accounting practices or principles. In the absence of bad faith by the Trustee,
the resolution, action or terms so made, taken or provided by the Trustee shall
not constitute a breach of this Agreement or any other agreement contemplated
herein or of any duty or obligation of the Trustee at law or in equity or
otherwise.
(c) Notwithstanding any other provision of this Agreement or
otherwise applicable law, whenever in this Agreement the Trustee is permitted or
required to make a decision:
(i) in its "discretion" or under a grant of similar
authority, the Trustee shall be entitled to consider such
interests and factors as it desires, including its own
interests, and, to the fullest extent permitted by applicable
law, shall have no duty or obligation to give any
consideration
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to any interest of or factors affecting the Trust, the
Beneficiaries or any other Person; or
(ii) in its "good faith" or under another express
standard, the Trustee shall act under such express standard
and shall not be subject to any other or different standard.
(d) The Trustee and any Affiliate of the Trustee may engage
in or possess an interest in other profit-seeking or business ventures of any
nature or description, independently or with others, whether or not such
ventures are competitive with the Trust and the doctrine of corporate
opportunity, or any analogous doctrine, shall not apply to the Trustee. No
Trustee who acquires knowledge of a potential transaction, agreement,
arrangement or other matter that may be an opportunity for the Trust shall have
any duty to communicate or offer such opportunity to the Trust, and such Trustee
shall not be liable to the Trust or to the Beneficiaries for breach of any
fiduciary or other duty by reason of the fact that such Trustee pursues or
acquires for, or directs such opportunity to another Person or does not
communicate such opportunity or information to the Trust. Neither the Trust nor
any Beneficiary shall have any rights or obligations by virtue of this Agreement
or the trust relationship created hereby in or to such independent ventures or
the income or profits or losses derived therefrom, and the pursuit of such
ventures, even if competitive with the activities of the Trust, shall not be
deemed wrongful or improper. Any Trustee may engage or be interested in any
financial or other transaction with the Beneficiaries or any Affiliate of the
Trust or the Beneficiaries, or may act as depositary for, trustee or agent for,
or act on any committee or body of holders of, securities or other obligations
of the Trust or the Beneficiaries or their Affiliates.
ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEE
6.1 LIMITATIONS ON TRUSTEE. The Trustee shall not at any time, on
behalf of the Trust or Beneficiaries, enter into or engage in any trade or
business except as necessary for the orderly liquidation of the Trust Assets and
to consummate the transactions contemplated by the Purchase Agreement. The
Trustee shall be restricted to the holding, collection and sale of the Trust
Assets and the payment and distribution thereof for the purposes set forth in
this Agreement and to the conservation and protection of the Trust Assets and
the administration thereof in accordance with the provisions of this Agreement.
In no event shall the Trustee take any action which would jeopardize the status
of the Trust as a "liquidating trust" for Federal income tax purposes within the
meaning of Treasury Regulation Section 301.7701-4(d). The Trustee shall not
invest any of the cash held as Trust Assets, except that the Trustee may invest
in (i) direct obligations of the United States of America or obligations of any
agency or instrumentality thereof which mature not later than one year from the
date of acquisition thereof, (ii) money market deposit accounts, checking
accounts, savings accounts, or certificates of deposit, or other time deposit
accounts which mature not later than one year from the date of acquisition
thereof which are issued by a commercial bank or savings institution organized
under the laws of the United States of America or any state
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thereof, or (iii) other temporary investments not inconsistent with the Trust's
status as a liquidating trust for tax purposes.
6.2 SPECIFIC POWERS OF TRUSTEE. Subject to the provisions of the
terms and conditions of this Agreement, the Trustee shall have the following
specific powers in addition to any powers conferred upon it by any other Section
or provision of this Agreement or any laws of the State of Delaware; PROVIDED,
that the enumeration of the following powers shall not be considered in any way
to limit or control the power of the Trustee to act as specifically authorized
by any other Section or provision of this Agreement and to act in such a manner
as the Trustee may deem necessary or appropriate to conserve and protect the
Trust Assets or to confer on the Beneficiaries the benefits intended to be
conferred upon them by this Agreement:
(a) to determine the nature and amount of the consideration
to be received with respect to the sale or other disposition of, or the grant of
interest in, the Trust Assets;
(b) to collect, liquidate or otherwise convert into cash, or
such other property as it deems appropriate, all property, assets and rights in
the Trust Assets, and to pay, discharge, and satisfy all other claims, expenses,
charges, Liabilities and obligations existing with respect to the Trust Assets,
the Trust or the Trustee;
(c) to elect, appoint, engage or retain any Persons as
agents, representatives or independent contractors (including without limitation
real estate advisors, investment advisors, accountants, transfer agents,
attorneys-at-law, managers, appraisers, brokers, or otherwise) in one or more
capacities, and to pay reasonable compensation from the Trust Assets for
services in as many capacities as such Person may be so elected, appointed,
engaged or retained (provided that any such agreements or arrangements with a
person or entity affiliated with the Trustee shall be on terms no less favorable
to the Trust than those available to the Trust in similar agreements or
arrangements with unaffiliated third parties, to prescribe the titles, powers
and duties, terms of service and other terms and conditions of the election,
appointment, engagement or retention of such Persons and, except as prohibited
by law, to delegate any of the powers and duties of the Trustee to agents,
representatives, independent contractors or other Persons;
(d) to retain and set aside such funds out of the Trust
Assets as the Trustee shall deem necessary or expedient to pay, or provide for
the payment of (i) unpaid claims, expenses, charges, Liabilities and obligations
of the Trust, the Company or any Subsidiary; and (ii) the expenses of
administering the Trust Assets;
(e) to do and perform any and all acts necessary or
appropriate for the conservation and protection of the Trust Assets, including
acts or things necessary or appropriate to maintain the Trust Assets held by the
Trustee pending sale or disposition thereof or distribution thereof to the
Beneficiaries;
12
(f) to institute or defend actions or judgments for
declaratory relief or other actions or judgments and to take such other action,
in the name of the Trust or the Company or as otherwise required, as the Trustee
may deem necessary or desirable to enforce any instruments, contracts,
agreements, causes of action, or rights relating to or forming a part of the
Trust Assets;
(g) to determine conclusively from time to time the value of
and to revalue the securities and other property of the Trust, in accordance
with independent appraisals or other information as it deems necessary or
appropriate;
(h) to cancel, terminate, or amend any instruments,
contracts, agreements, obligations, or causes of action relating to or forming a
part of the Trust Assets, and to execute new instruments, contracts, agreements,
obligations or causes of action notwithstanding that the terms of any such
instruments, contracts, agreements, obligations, or causes of action may extend
beyond the terms of the Trust;
(i) in the event any of the property which is or may become
a part of the Trust Assets is situated in any state or other jurisdiction in
which the Trustee is not qualified to act as Trustee, to nominate and appoint an
individual or corporate trustee qualified to act in such state or other
jurisdiction in connection with the property situated in that state or other
jurisdiction as a trustee of such property and require from such trustee such
security, if any, as may be designated by the Trustee, which, in the sole
discretion of the Trustee may be paid out of the Trust Assets. The trustee so
appointed shall have all the rights, powers, privileges and duties and shall be
subject to the conditions and limitations of the Trust, except as limited by the
Trustee and except where the same may be modified by the laws of such state or
other jurisdiction (in which case, the laws of the state or other jurisdiction
in which such trustee is acting shall prevail to the extent necessary). Such
trustee shall be answerable to the Trustee herein appointed for all monies,
assets and other property which may be received by it in connection with the
administration of such property. The Trustee hereunder may remove such trustee,
with or without cause, and appoint a successor trustee at any time by the
execution by the Trustee of a written instrument declaring such trustee removed
from office, and specifying the effective date of removal;
(j) to cause any investments of any part of the Trust Assets
to be registered and held in its name or in the names of a nominee or nominees
without increase or decrease of liability with respect thereto;
(k) to terminate and dissolve any entities owned by the
Trust; and
(l) to perform any act authorized, permitted, or required
under any instrument, contract, agreement, right, obligation, or cause of action
relating to or forming a part of the Trust Assets whether in the nature of an
approval, consent, demand, or notice thereunder or otherwise, unless such act
would require the consent of the Beneficiaries in accordance with the express
provisions of this Agreement.
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ARTICLE VII
CONCERNING THE TRUSTEE, BENEFICIARIES AND AGENTS
7.1 GENERALLY. The Trustee accepts and undertakes to discharge the
Trust, upon the terms and conditions hereof, on behalf of the Beneficiaries. The
Trustee shall exercise such of the rights and powers vested in it by this
Agreement in good faith and in the best interests of the Beneficiaries. The
Trustee shall not be personally liable to any Person for any act or omission
hereunder except as determined by a final order of a court of competent
jurisdiction for its own its own fraud or willful misconduct knowingly and
intentionally committed in bad faith by the Trustee, in each case, as determined
by a final order of a court of competent jurisdiction from which no appeal can
or is taken, except that:
(a) no successor Trustee shall be responsible for the acts
or omissions of a Trustee in office prior to the date on which it becomes a
Trustee;
(b) the Trustee shall not be liable to the Beneficiaries for
the acts or omissions of an agent, advisor or manager of the Trust appointed by
the Trustee hereunder, except where the Trustee intentionally and in bad faith
conceals the fraud or willful misconduct of such Person; or in bad faith fails
to take reasonable steps to redress the fraud or willful misconduct committed by
such Person when such Trustee is aware of such Person's fraud or willful
misconduct;
(c) the Trustee shall not be liable except for the
performance of such duties and obligations as are specifically set forth in this
Agreement, and no implied covenants or obligations shall be read into this
Agreement against the Trustee;
(d) in the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed herein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this Agreement;
but in the case of any such certificates or opinions which are specifically
required to be furnished to the Trustee by any provision hereof;
(e) the Trustee shall not be liable for any reasonable error
of judgment made in good faith; and
(f) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by the Trustee in good faith in accordance
with the terms and conditions of this agreement and at the direction of
Beneficiaries having aggregate Units of at least two-thirds of the total Units
held by all Beneficiaries relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or exercising any right
or power conferred upon the Trustee under this Agreement.
7.2 RELIANCE BY TRUSTEE. Except as otherwise provided in Section
7.1:
(a) The Trustee may consult with legal counsel, auditors or
other experts to be selected by it, and the advice or opinion of such counsel,
auditors, or other experts shall be full and complete personal protection to the
Trustee and agents of the
14
Trust in respect of any action taken or suffered by the Trustee in good faith
and in the reliance on, or in accordance with, such advice or opinion.
(b) Persons dealing with the Trustee shall look only to the
Trust to satisfy any liability incurred by the Trustee to such Person in
carrying out the terms of the Trust, and the Trustee shall have no personal or
individual obligation to satisfy any such liability.
(c) As far as reasonably practicable, the Trustee shall
cause any written instrument creating an obligation of the Trust to include a
reference to this Agreement and to provide that neither the Beneficiaries, the
Trustee nor their agents shall be liable thereunder, and that the other parties
to such instrument shall look solely to the Trust Assets for the payment of any
claim thereunder or the performance thereof; provided that the omission of such
provision from any such instrument shall not render the Beneficiaries, the
Trustee or their agents liable, nor shall the Trustee be liable to anyone for
such omission.
7.3 LIMITATION ON LIABILITY TO THIRD PERSONS. No Beneficiary shall
be subject to any personal liability whatsoever, in tort, contract, or
otherwise, to any Person in connection with the Trust Assets or the affairs of
the Trust, and, to the fullest extent permitted by law, no Trustee or agent of
the Trust shall be subject to any personal liability whatsoever in tort,
contract, or otherwise, to any Beneficiary or any other Person in connection
with the Trust Assets or the affairs of the Trust, except to the extent
determined by a court of competent jurisdiction from which no appeal can be or
is taken, to have resulted from the fraud or willful misconduct knowingly and
intentionally committed in bad faith by such Trustee or agent of the Trust. All
such other Persons shall look solely to the Trust Assets for satisfaction of
claims of any nature arising in connection with the affairs of the Trust. The
Trustee shall, at all times, at the expense of the Trust, maintain insurance for
the protection of the Trust Assets, its Beneficiaries, the Trustee and agents in
such amount as the Trustee shall deem adequate to cover all foreseeable
liability to the extent available at reasonable rates.
7.4 RECITALS. Any written instrument creating an obligation of the
Trust shall be conclusively taken to have been executed or done by a Trustee or
agent of the Trust only in its capacity as Trustee under this Agreement, or in
its capacity as an agent of the Trust.
7.5 INDEMNIFICATION. The Trustee and each Person appointed by the
Trustee pursuant to Section 5.11, and the directors, officers, employees and
agents of each such Person (each an "Indemnified Person" and collectively the
"Indemnified Persons"), shall, to the fullest extent permitted by law, be
indemnified out of the Trust Assets against all liabilities and expenses,
including amounts paid in satisfaction of judgments, in compromise or as fines
and penalties, and counsel fees, reasonably incurred by the Indemnified Persons
in connection with the defense or disposition of any action, suit or other
proceeding by the Trust or any other Person, whether civil or criminal, in which
the Indemnified Person may be involved or with which the Indemnified Person may
be threatened: (i) in the case of the Trustee or a Person appointed by the
Trustee pursuant to
15
Section 5.11, while in office or thereafter, by reason of his being or having
been such a Trustee or agent including, without limitation, in connection with
or arising out of any action, suit or other proceeding based on any alleged
breach of duty, neglect, error, misstatement, misleading statement, omission or
act of the Trustee or any such Person in such capacity; and (ii) in the case of
any director, officer or agent of any such Person, by reason of any such Person
exercising or failing to exercise any right or power hereunder; PROVIDED, that
the Indemnified Person shall not be entitled to such indemnification with
respect to any matter as to which the Indemnified Person shall have been
adjudicated by a final order of a court of competent jurisdiction from which no
appeal can be or is taken, to have acted with fraud or willful misconduct
knowingly and intentionally committed in bad faith. The rights accruing to any
Indemnified Person under these provisions shall not exclude any other right to
which the Indemnified Person may be lawfully entitled; PROVIDED, that no
Indemnified Person may satisfy any right of indemnity or reimbursement granted
herein, or to which the Indemnified Person may be otherwise entitled, except out
of the Trust Assets, and no Beneficiary shall be personally liable to any person
with respect to any claim for indemnity or reimbursement or otherwise. The
Trustee may make advance payments in connection with indemnification under this
Section 7.5, provided that the Indemnified Person shall have given a written
undertaking to repay any amount advanced to the Indemnified Person and to
reimburse the Trust in the event that it is subsequently determined that the
Indemnified Person is not entitled to such indemnification. The Trustee may
purchase such insurance as it believes, in the exercise of its discretion,
adequately insures that each Indemnified Person shall be indemnified against any
such loss, liability, or damage pursuant to this Section 7.5. Nothing contained
herein shall restrict the right of the Trustee to indemnify or reimburse such
Indemnified Person in any proper case, even though not specifically provided for
herein, nor shall anything contained herein restrict the right of any such
Indemnified Person to contribution under applicable law.
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEE
8.1 ACTION BY TRUSTEE. At any time there is more than one Trustee,
all action with respect to the disposition and distribution of the Trust Assets
required or permitted to be taken by the Trustee, in its capacity as Trustee,
shall be taken by approval, consent, vote or resolution authorized by at least a
majority of the Trustees.
8.2 RELIANCE ON STATEMENTS BY TRUSTEE. Any Person dealing with the
Trustee shall be fully protected in relying upon a certificate signed by the
Trustee, stating that it has authority take any action under the Trust. Any
Person dealing with the Trustee shall be fully protected in relying upon the
Trustee's certificate setting forth the facts concerning the action taken by the
Trustee pursuant to this Agreement, including the aggregate number of Units held
by the Beneficiaries causing such action to be taken.
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ARTICLE IX
COMPENSATION OF TRUSTEE
9.1 AMOUNT OF COMPENSATION. In lieu of commissions or other
compensation fixed by law for the Trustee, the Trustee shall receive as
compensation for services as Trustee hereunder the amounts set forth in SCHEDULE
A attached hereto, or as may subsequently be approved by Beneficiaries having at
least seventy five percent of the total Units present in person or by proxy at
any meeting validly called for such purpose pursuant to Section 12 hereof.
9.2 EXPENSES. The Trustee shall be reimbursed from the Trust
Assets for all expenses reasonably incurred, and appropriately documented, by
the Trustee in the performance of the Trustee's duties in accordance with this
Agreement.
ARTICLE X
TRUSTEE AND SUCCESSOR TRUSTEE
10.1 NUMBER AND QUALIFICATION OF TRUSTEE.
(a) Subject to the provisions of Section 10.3 relating to
the period pending the appointment of a successor Trustee, there shall be one
Trustee of this Trust, which shall be a citizen and resident of or a corporation
or other entity which is incorporated or formed under the laws of a state of the
United States and, if a corporation, it shall be authorized to act as a
corporate fiduciary under the laws of the State of Delaware or such other
jurisdiction as shall be determined by the Trustee in its sole discretion. The
number of Trustees may be increased or decreased from time to time as determined
by the Trustee, in his, her or its sole discretion.
(b) If a corporate Trustee shall ever change its name, or
shall reorganize or reincorporate, or shall merge with or into or consolidate
with any other bank or trust company, such corporate trustee shall be deemed to
be a continuing entity and shall continue to act as a trustee hereunder with the
same liabilities, duties, powers, titles, discretions, and privileges as are
herein specified for a Trustee.
10.2 RESIGNATION AND REMOVAL. Any Trustee may resign and be
discharged from the Trust hereby created by giving written notice to the
Beneficiaries at their respective addresses as they appear on the records of the
Trustee. Such resignation shall become effective upon the appointment of such
Trustee's successor, and such successor's acceptance of such appointment,
whichever is earlier. Any Trustee may be removed at any time, with cause, by
Beneficiaries having aggregate Units of at least two-thirds of the total Units
held by all Beneficiaries. Any Trustee may be removed at any time, without
cause, by Beneficiaries having aggregate Units of at least three-quarters of the
total Units held by all Beneficiaries.
10.3 APPOINTMENT OF SUCCESSOR. At any time while he is Trustee,
should Xxxxxx Xxxxxxxx die, become mentally incompetent or incapable of action
(as reasonably determined by the Alternate Trustees (as defined below), each of
Xxxxx X. Xxxxxx and Xxxxx Xxxxx (the "Alternate Trustees") shall automatically
without any action by the Beneficiaries or any other Person succeed Xx. Xxxxxxxx
as Trustee; provided that if only one of the Alternate Trustees is able to serve
as Trustee, such Alternate Trustee shall
17
serve as the sole Trustee of the Trust. Should at any time, either of the
Alternate Trustees resign or be removed, die, become mentally incompetent or
incapable of action (as determined by the Beneficiaries holding Trust Units
representing an aggregate of at least a two-thirds of the total Beneficial
Interests in the Trust, which costs and expenses for such determination shall be
borne by the Beneficiaries seeking such determination and not by the Trust), or
be adjudged bankrupt or insolvent, unless any remaining Trustees shall decrease
the number of Trustees of the Trust pursuant to Section 10.1 hereof, or shall
the number of Trustees be increased in accordance with Section 10.3 hereof, a
vacancy shall be deemed to exist and a successor shall be appointed by any
remaining Trustees and if (i) such a vacancy is not filled by any remaining
Trustees within ninety (90) days, and the remaining Trustees, if any, have
notified the Beneficiaries of their inability to fill such vacancy or (ii) there
is no remaining Trustee then, the Beneficiaries may, pursuant to Article 12
hereof, call a meeting to appoint a successor Trustee by Beneficiaries holding
Units representing an aggregate of at least two-thirds of the total Beneficial
Interests in the Trust present at the meeting, whether in person or by proxy.
Pending the appointment of a successor Trustee, the remaining Trustee or
Trustees then serving may take any action in the manner set forth in Section
8.1.
10.4 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE. Any successor
Trustee (including the Alternate Trustees) appointed hereunder shall execute an
instrument accepting such appointment hereunder and shall deliver one
counterpart, in case of a resignation, to the retiring Trustee. 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 Trust hereunder with like effect as if originally named therein; but the
retiring 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 upon the trust herein expressed, all the
estates, properties, rights, powers, and trusts of such retiring Trustee, and it
shall duly assign, transfer, and deliver to such successor Trustee all property
and money held by such Trustee hereunder.
10.5 BONDS. Unless a bond is required by law, no bond shall be
required of any original Trustee hereunder. Unless a bond is required by law and
such requirement cannot be waived by or with approval of the Beneficiaries
holding aggregate Units of at least a majority of the total Units held by all
Beneficiaries, no bond shall be required of any successor Trustee hereunder. If
a bond is required by law, no surety or security with respect to such bond shall
be required unless required by law and such requirement cannot be waived by or
with approval of the Beneficiaries or unless required by the Board. If a bond is
required by the Board or by law, the Board or the Trustee, as the case may be,
shall determine whether, and to what extent, a surety or security with respect
to such bond shall be required. The cost of any such bond shall be borne by the
Trust out of the Trust Assets.
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ARTICLE XI
CONCERNING THE BENEFICIARIES
11.1 EVIDENCE OF ACTION BY BENEFICIARIES. Whenever in this
Agreement it is provided that the Beneficiaries may take any action (including
the making of any demand or request, the giving of any notice, consent, or
waiver, the removal of a Trustee, the appointment of a successor Trustee, or the
taking of any other action), the fact that at the time of taking any such action
such Beneficiaries have joined therein may be evidenced: (i) by any instrument
or any number of instruments of similar tenor executed by the Beneficiaries in
person or by agent or attorney appointed in writing; or (ii) by the record of
the Beneficiaries voting in favor thereof at any meeting of Beneficiaries duly
called and held in accordance with the provisions of Article XII.
11.2 LIMITATION ON SUITS BY BENEFICIARIES. No Beneficiary shall
have any right by virtue of any provision of this Agreement to institute any
action or proceeding at law or in equity against any party other than the
Trustee with respect to the Trust Assets and then only to the extent permitted
herein, and the Beneficiaries (by their acceptance of any distribution made to
them pursuant to this Agreement) waive any such right.
11.3 REQUIREMENT OF UNDERTAKING. The Trustee may request any court
to require, and any court may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement, or in any suit against
the Trustee for any action taken or omitted to be taken by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit, and such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees, against any party litigant in such suit,
having due regard to the merits and good faith of the claims or defenses made by
such party litigant; provided that the provisions of this Section 11.3 shall not
apply to any suit initiated by the Trustee (other than a counterclaim).
ARTICLE XII
MEETING OF BENEFICIARIES
12.1 PURPOSE OF MEETINGS. A meeting of the Beneficiaries may be
called at any time and from time to time pursuant to the provisions of this
Article for the purposes of taking any action which the terms of this Agreement
permit Beneficiaries to take either acting alone or with the Trustee.
12.2 MEETING CALLED BY TRUSTEE. The Trustee may at any time call a
meeting of the Beneficiaries to be held at such time and at such place as the
Trustee shall determine. Written notice of every meeting of the Beneficiaries
shall be given by the Trustee (except as provided in Section 12.3), which
written notice shall set forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, and shall be mailed not
more than 60 nor less than 10 days before such meeting is to be held to all of
the Beneficiaries of record not more than 60 days before the date of such
meeting. The notice shall be directed to the Beneficiaries at their respective
addresses as they appear in the records of the Trust.
19
12.3 MEETING CALLED ON REQUEST OF BENEFICIARIES. Within 30 days
after written request to the Trustee by Beneficiaries holding an aggregate of
more than two-thirds of the total Units held by all Beneficiaries to call a
meeting of all Beneficiaries, which written request shall specify in reasonable
detail the action proposed to be taken, the Trustee shall proceed under the
provisions of Section 12.2 to call a meeting of the Beneficiaries, and if the
Trustee fails to call such meeting within such 30 day period then such meeting
may be called by such Beneficiaries, or their designated representatives,
requesting such meeting.
12.4 PERSONS ENTITLED TO VOTE AT MEETING OF BENEFICIARIES. Each
Beneficiary shall be entitled to vote at a meeting of the Beneficiaries either
in person or by his proxy duly authorized in writing. The signature of the
Beneficiary on such written authorization need not be witnessed or notarized.
Each Beneficiary shall be entitled to a number of votes equal to the number of
Units held by such Beneficiary as of the applicable record date. Notwithstanding
anything to the contrary herein, if the Trustee is also a Beneficiary, he, she
or it shall continue to have the right to vote in his, her or its capacity as a
Beneficiary.
12.5 QUORUM. Except as otherwise required by this Agreement or law,
Beneficiaries holding more than one-half of the total Units held by all
Beneficiaries shall be necessary to constitute a quorum at any meeting of
Beneficiaries for the transaction of business. If less than a quorum be present,
Beneficiaries having aggregate Units of at least a majority of the total Units
held by all Beneficiaries represented at the meeting may adjourn such meeting
with the same effect and for all intents and purposes as though a quorum had
been present. Except to the extent a different percentage is specified in this
Agreement for a particular matter or is required by law, when a quorum is
present, the approval of Beneficiaries having aggregate Units of at least
two-thirds of the total Units present or represented by proxy at such meeting
shall be required for taking action on any matter voted on by the Beneficiaries.
12.6 ADJOURNMENT OF MEETING. Subject to Section 12.5, any meeting
of Beneficiaries may be adjourned from time to time and a meeting may be held at
such adjourned time and place without further notice.
12.7 CONDUCT OF MEETINGS. The Trustee shall appoint the Chairman
and the Secretary of the meeting. The vote upon any resolution submitted to any
meeting of Beneficiaries shall be by written ballot. An Inspector of Votes,
appointed by the Chairman of the meeting, shall count all votes cast at the
meeting for or against any resolution and shall make and file with the Secretary
of the meeting their verified written report.
12.8 RECORD OF MEETING. A record of the proceedings of each meeting
of Beneficiaries shall be prepared by the Secretary of the meeting. The record
shall be signed and verified by the Secretary of the meeting and shall be
delivered to the Trustee to be preserved by them. Any record so signed and
verified shall be conclusive evidence of all of the matters therein stated.
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ARTICLE XIII
AMENDMENTS
13.1 CONSENT OF BENEFICIARIES. At the written direction or with the
written consent of Beneficiaries holding at least two-thirds of the total Units
present, in person or by proxy, at any meeting validly called for such purpose
pursuant to Section 12 hereof, or such greater or lesser percentage as shall be
specified in this Agreement for the taking of an action by the Beneficiaries
under the affected provision of this Agreement, the Trustee shall promptly make
and execute a declaration amending this Agreement for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or amendments thereto; PROVIDED, that no such amendment shall
increase the potential liability of the Trustee hereunder without the written
consent of the Trustee; PROVIDED, FURTHER, that no such amendment shall permit
the Trustee to engage in any activity prohibited by Section 6.1 hereof or affect
the Beneficiaries' rights to receive their pro rata shares of the Trust Assets
at the time of any distribution, and no such amendment shall cause the Trust to
be treated for Federal, state or local income tax purposes as other than a
liquidating trust under Treasury Regulation Section 301.7701-4(d), or cause the
Beneficiaries to be treated as other than the owners of their respective shares
of the Trust's taxable income pursuant to Section 671 through 679 of the Code
and any analogous provision of state or local law.
13.2 NOTICE AND EFFECT OF AMENDMENT. Promptly after the execution
by the Trustee of any such declaration of amendment, the Trustee shall give
notice of the substance of such amendment to the Beneficiaries or, in lieu
thereof, the Trustee may send a copy of the amendment to each Beneficiary. Upon
the execution of any such declaration of amendment by the Trustee, this
Agreement shall be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties, and
immunities of the Trustee and the Beneficiaries under this Agreement shall
thereafter be determined, exercised and enforced hereunder subject in all
respects to such modification and amendments, and all the terms and conditions
of any such amendment shall thereby be deemed to be part of the terms and
conditions of this Agreement for any and all purposes.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1 FILING DOCUMENTS. This Agreement shall be filed or recorded in
such office or offices as the Trustee may determine to be necessary or
desirable. A copy of this Agreement and all amendments thereof shall be
maintained in the office of the Trustee and shall be available at all times
during regular business hours for inspection by any Beneficiary or his duly
authorized representative. The Trustee shall file or record any amendment of
this Agreement in the same places where the original Agreement is filed or
recorded. The Trustee shall file or record any instrument which relates to any
change in the office of the Trustee in the same places where the original
Agreement is filed or recorded.
21
14.2 INTENTION OF PARTIES TO ESTABLISH TRUST. This Agreement is not
intended to create, and shall not be interpreted as creating, a corporation,
association, partnership, or joint venture of any kind for purposes of Federal
income taxation or for any other purpose.
14.3 BENEFICIARIES HAVE NO RIGHTS OR PRIVILEGES AS STOCKHOLDERS OF
THE COMPANY. Except as expressly provided in this Agreement or under applicable
law, the Beneficiaries (by their vote with respect to the Plan and/or their
acceptance of any distributions made to them pursuant to this Agreement) shall
have no rights or privileges attributable to their former status as stockholders
of the Company.
14.4 LAWS AS TO CONSTRUCTION. This Agreement and the trust created
hereby shall be governed by and construed in accordance with the laws of the
State of Delaware. The Trustee, the Company and the Beneficiaries (by their
acceptance of any distributions made to them pursuant to this Agreement) consent
and agree that this Agreement shall be governed by and construed in accordance
with such laws. The Trustee may amend this Agreement to provide for the creation
of a new trust governed by the laws of another jurisdiction to which the
Retained Assets and Liabilities shall be assigned. Sections 3540 and 3561 of
Title 12 of the Delaware Code shall not apply to the Trust.
14.5 SEVERABILITY. In the event any provision of this Agreement or
the application thereof to any Person or circumstances shall be finally
determined by a court of proper jurisdiction to be invalid or unenforceable to
any extent, the remainder of this 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 each provision of
this Agreement shall be valid and enforced to the fullest extent permitted by
law.
14.6 NOTICES. Any notice or other communication by the Trustee to
any Beneficiary shall be deemed to have been sufficiently given, for all
purposes, if deposited, postage prepaid, in the post office or letter box
addressed to such Person at his address as shown in the records of the Trust.
All notices and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered personally or
sent by cable, telegram, telecopier or telex to the parties at the following
addresses or at such other addresses as shall be specified by the parties by
like notice:
22
(a) If to the Trustee:
Fab Industries Trust
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Trustee
Facsimile: 000-000-0000
(b) If to the Company:
Fab Industries, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Executive Officer
Facsimile: 000-000-0000
14.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but such counterparts shall
together constitute one and the same instrument.
IN WITNESS WHEREOF, Fab Industries, Inc. has caused this
Agreement to be executed by an authorized officer, and the Trustee herein has
executed this Agreement, effective 5:00 PM, New York City time, May 27, 2005.
FAB INDUSTRIES, INC.
By: /s/ Xxxxxx Xxxxxx
---------------------------------
Name: Xxxxxx Xxxxx
Title: President and Chief
Operating Officer
By: /s/ Xxxxxx Xxxxxxxx
---------------------------------
Name: Xxxxxx Xxxxxxxx
Title: Trustee
23
SCHEDULE A
Xx. Xxxxxxxx shall receive an annual compensation for his services as
Trustee in an amount equal to the aggregate amount Xx. Xxxxxxxx received as
compensation for his services to the Company for the fiscal year ended November
27, 2004 (as such amount is set forth in the Company's form 10-K for the year
ended November 27, 2004) (the "Annual Trustee Compensation"). If more than one
Trustee is serving at any time, the Annual Trustee Compensation shall be divided
pro rata among the Trustees based on the number of Trustees then serving at such
time.
