EXHIBIT 10.3
TRUST AGREEMENT
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TRUST AGREEMENT
THIS TRUST AGREEMENT ("Agreement"), is
made as of the 30th day of July, 1999, by and among Unico, Inc., a New
Mexico corporation ("Unico"), Intermountain Refining Co. Inc., a New Mexico
corporation ("IRC"), and Xxxxxxx X. Xxxxxx ("Trustee").
RECITALS
A. On June 26, 1998, Unico, IRC, and others
executed a certain Novation Agreement (the "Novation Agreement").
B. Pursuant to the Novation Agreement it was
agreed that, at the option of IRC, all of the capital stock of IRC would
be distributed pro rata to the Eligible Unico Shareholders (as defined
below), as more particularly set forth in the Novation Agreement (the "Spin-Off
Transaction").
C. IRC elected to proceed with the Spin-Off
Transaction.
D. In furtherance of the Novation Agreement
and the Spin-Off Transaction, effective as of June 26, 1998, Unico delivered
the Current IRC Stock (as defined below) to XxXxxxx, who has held such
stock for the benefit of the Eligible Unico Shareholders.
E. By a letter agreement dated July 16, 1999
(together with all attachments thereto, the "Letter Agreement"), Unico
and IRC agreed to certain procedures and other matters to effect and finalize
the Spin-Off Transaction and consummate the other matters agreed to in
the Novation Agreement.
F. Pursuant to the further agreements reached
in the Letter Agreement, Unico and IRC wish to establish a trust, in accordance
with the terms and conditions set forth herein.
G. Trustee is willing to act as the trustee,
in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, for valuable consideration,
the receipt and sufficiency of which hereby are acknowledged, the parties
agree as follows:
AGREEMENT
1. Definitions. As used
in this Agreement, the following terms shall have the following meanings:
"Agreement" means this Trust Agreement.
"Current IRC Stock" means 50,000 shares
of common stock of IRC, held in trust by the Trustee pursuant to the terms
of this Agreement.
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"Eligible Unico Shareholders" means those
Unico shareholders eligible to receive IRC common stock in the Spin-Off
Transaction, which shareholders are listed in Exhibit A to this Agreement.
"IRC" means Intermountain Refining Co.,
Inc., a New Mexico corporation
"Letter Agreement" has the meaning set
forth in Recital E of this Agreement.
"XxXxxxx" means Xxxxxxx XxXxxxx, an attorney
residing in Denver, Colorado.
"Novation Agreement" has the meaning
set forth in Recital A of this Agreement.
"Spin-Off Transaction" has the meaning
set forth in Recital B of this Agreement.
"Trustee" means Xxxxxxx X. Xxxxxx.
"Unico" means Unico, Inc., a New Mexico
corporation.
2. Transfer of Current IRC Stock Into
Trust For Benefit of Eligible Unico Shareholders. Unico
and IRC, as their interests may appear, hereby establish a trust for the
benefit of the Eligible Unico Shareholders, pursuant to the terms and conditions
of this Agreement. The sole res of the Trust shall be the Current
IRC Stock. The Eligible Unico Shareholders shall be the beneficiaries
of the trust, pro rata in accordance with their stock ownership in Unico
as of July 6, 1999. Unico shall have no further interest in the Current
IRC Stock. To facilitate the foregoing, Unico has tendered a signed
blank stock power to the Trustee for the Current IRC Stock. To the
extent Unico has not transferred any interest in the Current IRC Stock
to the Trustee to effect the terms of this Agreement, it hereby does so.
Unico and IRC hereby direct XxXxxxx to tender the Current IRC Stock to
the Trustee.
3. Tax Considerations. The
Trustee shall hold the Current IRC Stock as trustee for benefit of the
Eligible Unico Shareholders. To the extent, if any, the transactions
set forth in paragraph 2 of this Agreement and/or the Spin-Off Transaction
are taxable events, the intent of the parties is that any tax liability
shall accrue to the Eligible Unico Shareholders rather than to Unico, IRC,
or the Trustee. It further is the intent of the parties that the
tax liability shall accrue upon receipt by the Eligible Unico Shareholders
of stock certificates to be distributed to them pursuant to paragraph 5
of this Agreement.
4. Voting of Current IRC Stock.
Until the Spin-Off Transaction is completed and IRC stock certificates
distributed to the Eligible Unico Shareholders, the Current IRC Stock shall
be voted by the Trustee. The Trustee may, but shall not be required
to, canvas the Eligible Unico Shareholders about upcoming votes to determine
how they wish him to vote.
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5. Completion of the Spin-Off Transaction.
IRC shall be responsible for insuring compliance with all federal and state
securities laws and regulations governing the Spin-Off Transaction.
When all such laws and regulations have been complied with and IRC is otherwise
prepared to complete the Spin-Off Transaction, IRC shall give written notice
to the Trustee about how to dispose of the Current IRC Stock. The
parties currently contemplate that the Trustee ultimately will either (i)
transfer the Current IRC Stock to IRC for cancellation, if IRC determines
to issue new shares of IRC common stock to the Eligible Unico Shareholders;
or (ii) distribute the Current IRC Stock to the Eligible Unico Shareholders,
if IRC determines not to issue new shares of IRC common stock to the Eligible
Unico Shareholders. IRC may take whatever steps it deems necessary
or desirable to complete the Spin-Off Transaction, including without limitation
declaring and delivering additional stock to the Trustee or canceling the
existing share certificate for Current IRC Stock. Unico shall have
no interest in or control over any aspect of the Spin-Off Transaction,
except to cooperate reasonably with IRC and/or the Trustee to accomplish
the Spin-Off Transaction. Regardless of how the distribution ultimately
is structured, the intent of the parties is that the Trustee shall play
only a ministerial role in the distribution, and shall not be or be deemed
an issuer, underwriter, broker, seller, or transferor, but only a trustee.
6. Duties of Trustee. The
Trustee's sole duties under this Trust Agreement shall be to (i) hold the
Current IRC Stock in trust for the benefit of the Eligible Unico Shareholders,
and to dispose of the Current IRC Stock as directed by IRC in furtherance
of the Spin-Off Transaction; (ii) to vote the Current IRC Stock if necessary;
and (iii) hold the Current IRC Stock to insure that it cannot be traded
until the Spin-Off Transaction can be accomplished in compliance with applicable
securities laws. Except for any losses suffered by reason of a breach
of fiduciary duty, Unico and IRC jointly and severally indemnify and hold
harmless the Trustee against any and all losses, claims, damages, liabilities,
and expenses, including reasonable costs and attorney fees incurred in
performance of his duties hereunder. In the event of any bona fide
dispute concerning the Current IRC Stock and its disposition, the Trustee
may at his option commence an action in the nature of interpleader and
seek to deposit the disputed documents in a court of competent jurisdiction,
with the expenses thereof to be borne by the non-prevailing party or parties.
If prior to the termination of this Trust the Trustee resigns, then IRC
shall designate a successor trustee.
7. Term of Trust. This trust
shall commence on the date hereof and shall terminate when the Trustee
disposes of the Current IRC Stock in accordance with the terms hereof.
8. Irrevocable Trust. This
trust is irrevocable. Neither Unico nor IRC shall have any right
or power, whether alone or by action jointly taken with others, to alter,
amend, revoke, or terminate the trust, or any of the terms of this Agreement,
in whole or in part, other than to designate who shall possess the trust
property. By this Agreement, Unico relinquishes all possession or
enjoyment of, or right to the income from, the Current IRC Stock, whether
directly, indirectly, or constructively, and every interest on any nature
in the Current IRC Stock.
9. Administrative Provisions.
The following administrative provisions shall govern this Agreement:
9.1 Waiver of Bond. To bond or
surety shall be required of the Trustee or any successor trustee.
9.2 Waiver of Accounting. The
Trustee is relieved from any duty to comply with the provisions of any
applicable accounting act or rule of law requiring a court or other accounting.
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9.3 Compensation of Trustee. Trustee
shall charge his normal hourly rate for services provided under this Agreement.
IRC shall be responsible for paying any amounts owed, so long as Unico
does not force the Trustee to spend unnecessary time performing his duties
under this Agreement, in which event Unico shall be responsible for paying
the Trustee for his time and expenses.
9.4 Resignation of Trustee. The
Trustee or any successor trustee may resign at any time by written notice
to IRC. In such an event, the Trustee shall deliver the Current IRC
Stock to the successor trustee and shall then be discharged as trustee
and have no further powers, rights, discretions, obligations, or duties
with the trust estate.
9.5 Appointment of Replacement Trustee.
IRC shall have the power to appoint a replacement Trustee at any time upon
written notice to the Trustee. In such an event, the Trustee shall
deliver the Current IRC Stock to the successor trustee and shall then be
discharged as trustee and have no further powers, rights, discretions,
obligations, or duties with the trust estate. The Trustee shall be
compensated for all of his duties performed prior to the replacement.
10. Notices. All notices,
demands, consents, approvals, and other communications that may or are
required to be given by any party to the others under this Agreement will
be deemed to have been fully given when made in writing and personally
delivered, delivered by telecopier, or deposited in the United States mail,
postage prepaid, certified or registered mail, and addressed to the parties
at their respective addresses as follows:
Unico at: Unico, Inc.
0000 X. Xxxxxxxxx Xxxx
Xxxxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxx Xxxx, Chief Executive Officer
Telecopier: (000) 000-0000
IRC at: Intermountain Refining
Co., Inc.
X.X. Xxx 00
Xxxxxxxxxx, Xxx Xxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx, President
Telecopier: (000) 000-0000
Trustee at: Xxxxxxx X. Xxxxxx
c/o Jacobvitz, Xxxxx & Xxxxxx
000 Xxxxxxxxx Xxx., X.X.
Xxxxx 000
Xxxxxxxxxxx, Xxx Xxxxxx 00000
(000) 000-0000
Each party may designate by notice in writing
to the other party any new address to which notices, demands, consents,
approvals, and other communications will be sent.
11. Miscellaneous Provisions.
11.1 Binding Effect. The
agreements, covenants, conditions, and provisions herein contained apply
to and bind the successors and assigns of the parties hereto.
11.2 Construction. This
Agreement is to be construed to effect the normal and reasonable expectations
of sophisticated business parties. No party will take actions that
would frustrate the other parties' reasonable expectations concerning the
benefits to be enjoyed hereunder. This Agreement has been prepared
by IRC and its professional advisors and reviewed by Unico and its professional
advisors. Unico and IRC believe this Agreement is the product of
both of their efforts, expresses their agreement, and should not be interpreted
in favor of or against either Unico or IRC.
11.3 Severability. If any
provision of this Agreement is determined to be illegal or unenforceable,
such determination will not affect any other provisions of this Agreement,
and all such other provisions will remain in full force and effect.
11.4 Execution of Documents.
Each party will execute all documents and perform all acts reasonably required
to effect the purposes of this Agreement.
11.5 Applicable Law. This
Agreement is to be governed by and construed in accordance with the laws
of the State of New Mexico.
11.6 Counterparts. This
Agreement may be executed simultaneously in two or more counterparts, each
of which shall be deemed an original, but all of which together shall constitute
one and the same instrument. The headings of the sections of this
Agreement are inserted for convenience only and shall not constitute a
part hereof.
11.7 Captions. Section headings
in this Agreement are for convenience of reference only and shall not otherwise
affect the meaning hereof.
11.8 Entire Agreement. This
Agreement constitutes the entire agreement among the parties with respect
to the subject matter hereof and supersedes all other prior agreements
and understandings, both written and oral, among the parties with respect
to the subject matter hereof.
11.9 Expenses. Unless otherwise
specified herein, all costs and expenses incurred in connection with this
Agreement and the transactions contemplated hereunder shall be paid by
the party incurring such expenses.
IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be executed as of the date first above written.
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UNICO: UNICO, INC.,
a New Mexico corporation
By:
Xxx Xxxx
Xxx Xxxx, President
IRC: INTERMOUNTAIN
REFINING CO., INC.,
a New Mexico corporation
By:
Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx, President
TRUSTEE: Xxxxxxx
X. Xxxxxx
Xxxxxxx X. Xxxxxx
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