1
EXHIBIT 2.4
LIQUIDATING TRUST AGREEMENT
This LIQUIDATING TRUST AGREEMENT, dated as of July 10, 1997 (the
"Agreement"), is by and among WRT Energy Corporation ("the Debtor") and Xxxxxx
Associates L.L.C., as Trustee (the "Trustee").
RECITALS
WHEREAS, on or about May 2, 1997, the United States Bankruptcy Court
for the Western District of Louisiana, Lafayette-Opelousas Division (the
"Bankruptcy Court") entered an order confirming the Second Amended Joint Plan
of Reorganization Under Chapter 11 of the United States Bankruptcy Code, dated
March 11, 1997 and as amended on April 28, 1997 (as may thereafter be amended,
restated or otherwise modified, the "Plan"), filed by the Debtor, DLB Oil &
Gas, Inc. and Wexford Management LLC; and
WHEREAS, pursuant to the Plan, (i) the Debtor's Causes of Action
(other than the Marine Equipment Causes of Action and the Tri-Deck Causes of
Action) (collectively, the "Trust Actions"), (ii) the distribution of the net
proceeds realized from the prosecution of the Trust Actions (the "Proceeds")
and (iii) the net proceeds, if any, realized from the sale of any equipment,
title to which is obtained by New WRT as a result of the Marine Equipment
Causes of Action, sold within six months following such acquisition of title
(the "MEC Proceeds"), has been, on the date hereof, assigned to the WRT
Creditors Liquidation Trust created by this Agreement (the "Trust"), on behalf
of and for the benefit of the holders of Allowed Claims in Class D-3 under the
Plan and each of their respective successors, heirs and assigns (collectively,
the "Beneficiaries"), by the Debtor in accordance with sections 1123(b)(3)(B)
and 1145(a)(1) of the Bankruptcy Code; and
WHEREAS, the Trust is being created pursuant to this Agreement for
the sole purpose of coordinating the prosecution, direction, settlement or
expeditious compromise of the Trust Actions on behalf of and for the benefit of
the Beneficiaries and to distribute the Proceeds to the Beneficiaries in
accordance herewith; and
WHEREAS, pursuant to Article 33.15 of the Plan, the Debtor is deemed
to have granted, assigned, transferred, conveyed and delivered to the Trustee,
on behalf of and for the benefit of the Beneficiaries, control of, and all of
the Debtor's right, title and interest in, the Trust Actions and to the
Proceeds and, the MEC Proceeds; and
WHEREAS, pursuant to Article 33.16 of the Plan, the costs of the
Trust shall be funded by a one time capital contribution (the "Initial
Contribution") of $3 million to be made by New WRT; and
WHEREAS, Bankruptcy Court shall have jurisdiction over the Trust, the
Trustee, the Trust Actions and the remaining Trust Assets, as provided herein.
(page) 1
2
DECLARATION OF TRUST
NOW THEREFORE, in order to declare the terms and conditions hereof,
and in consideration of the Recitals, and of other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
and subject to the terms and conditions of the Plan and this Agreement, New WRT
has executed this Agreement and absolutely and irrevocably assigns to the
Trustee, and to its successors and assigns, on behalf of and for the benefit
of the Beneficiaries, the Initial Contribution and all right, title and
interest of New WRT in the Trust Actions, the Proceeds and the MEC Proceeds;
TO HAVE AND TO HOLD unto the Trustee and its successors in trust;
PROVIDED, HOWEVER, that upon termination of the Trust in accordance
with Section 4.01 hereof, this Agreement shall cease, terminate and be of no
further force and effect.
IT IS HEREBY FURTHER COVENANTED AND DECLARED, that the Trust Actions,
the Proceeds, the Initial Contribution, the MEC Proceeds and all other property
held from time to time by the Trustee under this Agreement and any earnings
thereon (collectively, the "Trust Assets") are to be held and applied by the
Trustee solely for the benefit of the Beneficiaries and for no other party,
subject to the further covenants, conditions and terms hereinafter set forth.
ARTICLE I
DEFINITIONS
1.01 Certain Terms Defined. Terms defined in the Plan, and not
otherwise defined herein, shall, when used herein (including in the Recitals
hereto), have the meanings ascribed to such terms in the Plan.
1.02 Meanings of Other Terms. Except where the context otherwise
requires, words importing the masculine gender include the feminine and the
neuter, if appropriate, words importing the singular number shall include the
plural number and vice versa and words importing persons shall include firms,
associations, corporations and other entities. All references herein to
Articles, Sections and other subdivisions, unless referring specifically to the
Plan or provisions of the Bankruptcy Code, Bankruptcy Rules or other law,
statute or regulation, refer to the corresponding Articles, Sections and other
subdivisions of this Agreement, and the words herein and words of similar
import refer to this Agreement as a whole and not to any particular Article,
Section or subdivisions of this Agreement.
ARTICLE II
TRUSTEE'S ACCEPTANCE
2.01 Acceptance. The Trustee accepts the Trust created by this
Agreement and the transfer and assignment to the Trust, on behalf of and for
(page) 2
3
the benefit of the holders of Allowed Class D-3 Claims and New WRT, of the
Initial Contribution, the Trust Actions, the Proceeds, and the MEC Proceeds as
set forth in the Plan, and agrees to observe and perform the Trust, upon and
subject to the terms and conditions set forth herein and in the Plan.
2.02 Purpose of Trust. The sole purpose of this Agreement is to
implement Articles 33.15 and 33.16 of the Plan by providing for the vesting in
the Trustee of the ownership of and the responsibility for the protection and
conservation of the Trust Assets on behalf of and for the benefit of the
Beneficiaries. Such responsibility shall be limited to the retention and
enforcement of the Trust Actions by the Trustee on behalf of and for the
benefit of the Beneficiaries, including the powers with respect thereto set
forth in Article VII hereof, the collection of the Proceeds, the temporary
investment thereof and other Trust moneys, including, but not limited to, the
Initial Contribution, as provided in Section 7.03 hereof, the payment of the
costs and expenses of Trust Actions, the making of any other payments provided
to be made from the Trust as set forth in the Plan and this Agreement and the
distribution of the Proceeds, any income earned thereon and other Trust moneys
to the Beneficiaries in accordance with the provisions of the Plan and this
Agreement.
2.03 Incidents of Ownership. The Beneficiaries shall be the sole
beneficiaries of the Trust and the Trustee shall retain only such incidents of
ownership as are necessary to undertake the actions and transactions authorized
herein on their behalf.
ARTICLE III
BENEFICIARIES
3.01 Beneficial Interests. The interest of each Beneficiary in
the Trust Assets (the "Beneficial Interest") shall be determined in the
following manner: (i) New WRT shall have a Beneficial Interest equal to 12% of
the Trust Assets; and (ii) each holder of an Allowed Claim in Class D-3 under
the Plan shall hold a share, as calculated pursuant to the provisions set forth
herein, of an aggregate Beneficial Interest equal to 88% of the Trust Assets.
3.02 Certificates. (a) Beneficial Interests shall be evidenced
by Certificates of Beneficial Interest, in form and substance as set forth in
Exhibit A annexed hereto (the "Certificate"). Certificates shall be issued by
the Trustee in units of Beneficial Interest totaling 15,681,818 in number (the
"Units"). The Trustee shall issue one Certificate to each Beneficiary in a
denomination equal to the aggregate number of Units held by such Beneficiary
or, alternatively, at the request of the Beneficiary or at the option of the
Trustee, the Trustee may issue multiple Certificates to any Beneficiary which
Certificates shall, in the aggregate, equal the total number of Units held by
such Beneficiary. Notwithstanding the foregoing, the Trustee shall also issue
Certificates in a like manner to the Disbursing Agent to be held by it in trust
on behalf of and for the benefit of holders of (i) Disputed Claims which would
be classified as Class D-3 Claims under the Plan if Allowed (collectively, the
"Disputed Claims"), and (ii) to the extent such Disputed Claims are disallowed,
Allowed Claims, as provided herein.
(page) 3
4
(b) As of the date hereof, New WRT has delivered to the
Trustee (i) a list of the names and addresses of each Person entitled to
receive Certificates as of the Effective Date in accordance with the Plan and
this Agreement and (ii) a list of the names and addresses of each Person
holding a Disputed Claim. The Trustee shall, as soon as practicable hereafter,
(x) issue and deliver Certificates to New WRT for 1,881,818 Units which is the
full Beneficial Interest held by New WRT, (y) issue and deliver Certificates to
each holder of Allowed Claims in Class D-3 of the Plan for a number of Units
evidencing each such holder's Beneficial Interest equal to the aggregate number
of shares of New WRT Common Stock received by such holder pursuant to Article
18.1 of the Plan and the number of shares of New WRT Subscription Common Stock
received by such holder as of the Effective Date pursuant to the exercise by
such holder of New WRT Subscription Rights (including Oversubscription Rights)
pursuant to the Rights Offering, and (z) issue and deliver Certificates to the
Disbursing Agent for a number of Units equal to the difference between
15,681,818 Units and the aggregate number of Units issued pursuant to clauses
(x) and (y) of this Section 3.02(b), to be held by the Disbursing Agent in
trust on behalf of and for the benefit of the holders of Disputed Claims which
become Allowed Claims and, to the extent that Disputed Claims are disallowed,
the holders of Allowed Claims, all as provided for in the Disbursing Agent
Agreement and the Plan (the Beneficiaries, their successors and assigns and the
Disbursing Agent, in its capacity as a holder of Units pursuant to clause (z)
of this sentence, are hereinafter collectively referred to as the "Unit
Holders").
(c) Certificates of each Unit Holder shall be recorded and
set forth in a register (the "Register") maintained by the Trustee or a duly
authorized agent of the Trustee expressly for such purpose.
(d) Beneficiaries may assign all or a portion of their Units
of Beneficial Interest as represented by their Certificates. The transfer of a
Certificate or any portion thereof shall be recorded in the Register using the
following procedure: (i) the holder of the Certificate shall present it to the
Trustee together with a written request to transfer all or a portion thereof to
the assignee; (ii) the Trustee shall issue a new Certificate to the assignee
for a number of Units equal to the number of Units being assigned; and (iii)
the Trustee shall, if necessary, issue a new Certificate to the original holder
for a number of Units equal to the number of Units being retained by such
holder. Notwithstanding any provision herein to the contrary, the Trustee may
refuse to record a transfer made pursuant to this Section 3.02(d) if it
reasonably believes that such a transfer may constitute a violation of
applicable laws or may subject the Beneficiaries or the Trust to adverse tax
consequences.
(e) If a Unit Holder claims that a Certificate has been
lost, destroyed or wrongfully taken, the Trustee shall issue and deliver to
such Unit Holder a replacement Certificate. The Trustee may require such Unit
Holder to provide an indemnity bond or other form of indemnity sufficient in
the Trustee's reasonable judgment to protect the Trustee from any loss which it
may suffer if the Certificate is replaced. The Trustee shall charge such Unit
Holder for its expenses in replacing a Certificate which has been mutilated,
lost, destroyed or wrongfully taken.
(page) 4
5
(f) Fractional Units shall not be issued or disbursed.
Whenever the issuance or distribution of a fractional Unit would otherwise be
called for, the actual distribution of Units shall reflect a rounding down to
the nearest whole Unit.
3.03 Conflicting Claims. If any conflicting claims or demands
are made or asserted with respect to the Beneficial Interest represented by a
Certificate, or if there is any disagreement between the assignees,
transferees, heirs, representatives or legatees succeeding to all or a part of
a Beneficial Interest resulting in adverse claims or demands being made in
connection with such Interest, 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 the Beneficial Interest represented
by the claims or demands involved, or any part thereof and to refer such
conflicting claims or demands to the Bankruptcy Court, which shall have
exclusive jurisdiction over resolution of such conflicting claims or demands.
In so doing, the Trustee shall not be or become liable to any of such parties
for its refusal to comply with any of such conflicting claims or demands, nor
shall the Trustee be liable for interest on any funds which it may so withhold.
The Trustee shall be entitled to refuse to act until either (i) the rights of
the adverse claimants have been adjudicated by a Final Order of the Bankruptcy
Court or (ii) all differences have been resolved by a valid written agreement
among all of such parties and the Trustee, which agreement shall include a
complete release of the Trustee.
3.04 Rights of Beneficiaries. Each Beneficiary shall be entitled
to participation in the rights and benefits due to a Beneficiary hereunder
according to its Beneficial Interest. Each Beneficiary shall take and hold the
same subject to all the terms and provisions of this Agreement. The interest
of a Beneficiary is hereby declared and shall be in all respects personal
property. Upon the death of an individual who is a Beneficiary, his interest
shall pass as personal property to his legal representative and such death
shall in no way terminate or affect the validity of this Agreement. Upon the
merger, consolidation or other similar transaction involving a Beneficiary that
is not an individual, such Beneficiary's interest shall be transferred by
operation of law and such transaction shall in no way terminate or affect the
validity of this Agreement. Except as expressly provided hereunder, a
Beneficiary shall have no title to, right to, possession of, management of or
control of the Trust. No widower, widow, heir or devisee of any individual who
may be a Beneficiary and no bankruptcy trustee, receiver or similar person of
any Beneficiary shall have any right, statutory or otherwise (including any
right of dower, homestead or inheritance, or of partition, as applicable), in
any property whatever forming a part of the Trust, but the whole title to all
the Trust's 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 and the Plan.
(page) 5
6
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.01 Duration. The existence of the Trust shall terminate on the
earlier of: (a) the date on which all of the Trust Assets have been liquidated
and the proceeds thereof distributed to the Beneficiaries, or (b) three years
after the Effective Date; provided, however, that the Trustee may extend the
term of the Trust, provided that he receives Bankruptcy Court approval for
cause within six months from the beginning of the extended term.
Notwithstanding anything to the contrary in this Agreement, in no event shall
the Trustee unduly prolong the duration of the Trust, and the Trustee shall at
all times endeavor to prosecute, direct, settle or compromise expeditiously the
Trust Actions, so as to distribute the Proceeds to the Beneficiaries and
terminate the Trust as soon as practicable in accordance with this Agreement.
4.02 Termination by Beneficiaries. The Trust may not be
terminated at any time by the Beneficiaries.
4.03 Continuance of Trust for Winding Up. After the termination
of the Trust and solely for the purpose of liquidating and winding up the
affairs of the Trust, the Trustee shall continue to act as such until its
duties have been fully performed. Upon distribution of all Proceeds, the MEC
Proceeds and any investment income earned on Trust Assets not used to pay
expenses associated with prosecution of the Trust Actions (collectively, the
"Distributable Proceeds") and any remaining moneys or other assets, the Trustee
shall retain the books, records 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 six years from the distribution of
all Distributable Proceeds (unless such records and documents are necessary to
fulfill the Trustee's obligations pursuant to Section 5.06 hereunder). Except
as otherwise specifically provided herein, upon the distribution of all
Distributable Proceeds, the Trustee shall be deemed discharged and have no
further duties or obligations hereunder except to account to the Beneficiaries
as provided in Section 5.03 hereof and as may be imposed on the Trustee by
virtue of Section 5.06 and Article VI hereof.
ARTICLE V
ADMINISTRATION OF TRUST ESTATE
5.01 Payment of Claims, Expenses and Liabilities. The Trustee
shall pay from the Trust Assets all claims, expenses, charges, liabilities and
obligations of the Trust as contemplated by this Agreement and as required by
law.
5.02 Distributions. (a) The Trustee shall make distributions to
the Unit Holders of the Distributable Proceeds in accordance with the
provisions of this Agreement at each such time as the Trustee has available at
least $500,000 in Distributable Proceeds for distribution to the Unit Holders;
provided, however, that, notwithstanding the foregoing, the Trustee must make
(page) 6
7
a distribution of all Distributable Proceeds to the Unit Holders at least once
per year after taking into account any payments that must be made in accordance
with Section 5.01 hereof and after retaining such moneys as it determines is
necessary to pay the on-going costs and expenses of prosecuting the Trust
Actions, provided, further, that, notwithstanding the preceding clause, the
Trustee must distribute at least 50% of the Distributable Proceeds on an annual
basis. The Trustee shall distribute or cause to be distributed to the Unit
Holders the Distributable Proceeds in an amount equal to each Unit Holder's pro
rata share of such Distributable Proceeds as based on the number of Units held
by each Unit Holder. Notwithstanding any provision herein to the contrary, the
Trustee shall make a final distribution of the Distributable Proceeds and any
remaining trust moneys and other Trust Assets in accordance with the terms of
this Agreement prior to the termination of the Trust in accordance with Section
4.01 hereof.
(b) No distribution shall be required to be made hereunder
to any Unit Holder unless such Unit Holder is to receive at least $50 or unless
such distribution is the final distribution to such holder pursuant to the Plan
and this Agreement. Any such distribution not made in accordance with the
provisions of this Section 5.02(b) shall be retained by the Trustee in an
interest bearing account and shall be held in trust for the relevant Unit
Holder until the earlier of (i) the date the next distribution is scheduled to
be made to such Unit Holder, provided, however, that such subsequent
distribution, taken together with amounts retained hereby, equals at least $50,
or (ii) the final distribution to such Unit Holder.
5.03 Reports. The Trustee shall file with the Court: (a)
unaudited quarterly financial reports and an audited annual financial report
regarding the financial condition and results of operation of the Trust, and
(b) a quarterly report concerning the status of all Trust Actions which have
been filed with a court of competent jurisdiction. The Trustee shall provide a
copy of such reports to any Unit Holder at such Unit Holder's request and cost.
If the Trust becomes subject to the registration requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trustee shall cause
the Trust to register pursuant to, and comply with the applicable reporting
requirements of, the Exchange Act and will issue reports to Unit Holders in
accordance therewith.
5.04 Notice of Change of Address. Each Unit Holder shall be
responsible for providing the Trustee with written notice of any change in
address. The Trustee is not obligated to make any effort to determine the
correct address of a Unit Holder.
5.05 Fiscal Year. The fiscal year of the Trust shall be the
calendar year.
5.06 Books and Records. The Trustee shall maintain, in respect
of the Trust and the Unit Holders, books and records relating to the assets and
the income of the Trust and the payment of expenses of the Trust, in such
detail and for such period of time as may be necessary to enable it to make
full and proper reports in respect thereof in accordance with the provisions of
Section 5.03 and Article VI hereof and to comply with applicable provisions of
law.
(page) 7
8
5.07 Undeliverable Property. (a) If any distribution to a
Beneficiary of Certificates or Distributable Proceeds is returned to the Trust
as undeliverable, no further distribution thereof shall be made unless and
until the Trust is notified in writing of such Beneficiary's then current
address within the time period specified in Section 5.07(b). For purposes of
this Agreement, undeliverable distributions shall include checks (as of the
date of their issuance) sent to a Beneficiary, respecting distributions to such
Beneficiary, which checks have not been cashed within six months following the
date of issuance of such checks. Undeliverable distributions shall remain in
the possession of the Trust until the earlier of (i) such time as the relevant
distribution becomes deliverable and (ii) the time period specified in Section
5.07(b).
(b) Any Beneficiary that does not assert a claim for an
undeliverable distribution of Certificates or Distributable Proceeds held by
the Trust within the later of (i) two years after the date hereof or (ii) one
year after the date such distribution was originally made (but in no event
longer than six months after all of the Distributable Proceeds have been
distributed except for undeliverable distributions), shall no longer have any
claim to or interest in such undeliverable distribution and shall forever be
barred from receiving any further distributions under this Agreement. In such
cases, title to and all Beneficial Interests in any such undeliverable
distributions shall revert to or remain in the trust and shall be redistributed
in accordance with Section 5.01(a) of this Agreement.
5.08 Cash Payments. All payments required to be made by the
Trustee to the Unit Holders shall be made in Cash denominated in U.S. dollars
and, if in check form, drawn on a domestic bank selected by the Trustee.
ARTICLE VI
TAX MATTERS
6.01 The Debtor, New WRT, the Beneficiaries and the Disbursing
Agent shall treat the transfer to the Trust the Initial Contribution, the Trust
Actions, and the right to receive any MEC Proceeds for the benefit of the
holders of Allowed Class D-3 Claims and New WRT, for all purposes of the
Internal Revenue Code of 1986, as amended (the "Code"), as a transfer of a pro
rata portion of the Initial Contribution, the Trust Actions and the right to
receive the MEC Proceeds to holders of Allowed Class D-3 Claims to the extent
that such creditors are Beneficiaries followed by a deemed transfer of such pro
rata portion by holders of Allowed Class D-3 Claims to the Trust and a transfer
of the remainder of the Initial Contribution, the Trust Actions and the right
to receive the MEC Proceeds by New WRT to the Trust.
6.02 For all federal income tax purposes, the Beneficiaries will
be treated as the grantors and deemed owners of the Trust. The Trustee will
file returns for the Trust as a grantor trust pursuant to Section 1.671-4(a) of
the Income Tax Regulations and will issue to the Unit Holders appropriate tax
forms and statements required under the Code and Treasury Regulations to permit
each Unit Holder to report and pay tax on its share of the Trust's taxable
income.
(page) 8
9
6.03 For all federal income tax purposes, the Trust Actions and
the right to receive MEC Proceeds will be treated by the Debtor, New WRT, the
Beneficiaries, the Disbursing Agent and the Trustee as having had no value at
the time of their transfer to the Trusts on behalf and for the benefit of the
Beneficiaries.
6.04 The Trustee will take such actions as are necessary to make
certain that all of the Trust's taxable income (including, but not limited to,
all Proceeds, MEC Proceeds and earnings, if any, on Trust Assets) will be
subject to federal income tax on a current basis. In accordance therewith, the
Trustee will provide the Disbursing Agent with the appropriate tax information
so that the Disbursing Agent can pay federal, state and local income tax in
accordance with the Disbursing Agent Agreement. A Beneficiary which receives
distributions with respect to which the Disbursing Agent has paid federal
income tax pursuant to this Section 6.04 shall be treated for all other
purposes of this Agreement and the Plan as having received a distribution equal
to the amount of tax paid on its behalf by the Disbursing Agent.
ARTICLE VII
POWERS OF AND LIMITATIONS ON THE TRUSTEE
7.01 Powers of the Trustee. Without limiting, but subject to the
remaining provisions herein, the Trustee shall be expressly authorized to:
(a) execute any documents and take any other actions related
to, or in connection with, the liquidation of the Trust Assets and the exercise
of the Trustee's powers granted herein;
(b) hold legal title to any and all rights of the
Beneficiaries in or arising from the Trust Assets;
(c) protect and enforce the rights to the Trust Assets
vested in the Trustee by this Agreement by any method deemed appropriate
including, without limitation, by judicial proceedings or pursuant to any
applicable bankruptcy, insolvency, moratorium or similar law and general
principles of equity;
(d) deliver the Certificates and distributions on account of
the Certificates to the Unit Holders in accordance with this Agreement;
(e) have exclusive power to prosecute the Trust Actions;
(f) have exclusive power to settle or otherwise compromise
the Trust Actions, subject, however, to Bankruptcy Court approval;
(g) file, if necessary, any and all tax information returns
with respect to the Trust and pay taxes properly payable by the Trust, if any,
and make distributions to the Beneficiaries net of such taxes;
(page) 9
10
(h) make all necessary filings in accordance with any
applicable law, statute or regulation, including, but not limited to, the
Exchange Act;
(i) determine and satisfy any and all ordinary course
liabilities created, incurred or assumed by the Trust;
(j) pay all ordinary course expenses and make all other
payment relating to the Trust;
(k) retain and pay professionals, including but not limited
to attorneys, necessary to carry out its obligations hereunder;
(l) invest moneys received by the Trust or otherwise held by
the Trust in accordance with Section 7.03 hereof; and
(m) in the event that the Trustee determines that the
Beneficiaries or the Trust may, will or have become subject to adverse tax
consequences, in its sole discretion, take such actions that will, or are
intended to, alleviate such adverse tax consequences.
7.02 Limitations on Trustee. (a) The Trustee shall not at
any time, on behalf of the Trust or the Beneficiaries, (i) enter into or engage
in any trade or business, (ii) take any steps to facilitate the development of
an active trading market for the Certificates, (iii) make a market for the
Certificates or encourage others to do so, (iv) list the Certificates on a
national securities exchange or the Nasdaq Stock Market or (v) collect or
publish information about prices at which the Certificates are transferred.
(b) No part of the Trust Assets shall be used or disposed of
by the Trustee in furtherance of any trade or business. The Trustee shall, on
behalf of the Trust, hold the Trust out as a trust in the process of
liquidation and not as an investment company. The Trustee shall be restricted
to the enforcement on behalf of and for the benefit of the Beneficiaries of the
Trust Actions, the payments and distribution of the Proceeds for the purpose
set forth in this Agreement and the conservation and protection of the Trust
Assets and the administration thereof in accordance with the provisions of this
Agreement.
7.03 Investment of Trust Moneys. The Trustee shall invest the
moneys received by the Trust or otherwise held in the Trust Estate in (i)
short-term certificates of deposit or money market accounts maintained by or
issued by domestic banks having in excess of $1 billion in capital and surplus
and one of the two highest ratings given by both Xxxxx'x and Standard & Poors,
(ii) insured demand deposit accounts or certificates of deposit maintained by
or issued by any savings institution or commercial bank insured by the United
States government or any agency thereof and (iii) short-term marketable direct
obligations of, or guaranteed as to principal and interest by, the United
States government or any agency thereof; provided, however, that the maturities
of any of the foregoing shall not exceed 30 days.
(page) 10
11
ARTICLE VIII
CONCERNING THE TRUSTEE
8.01 Generally. The Trustee accepts and undertakes to discharge
the Trust created by this Agreement upon the terms and conditions hereof. The
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent man would exercise or use under the circumstances in the conduct of its
own affairs. No provisions of this Agreement shall be construed to relieve the
Trustee from liability for its own recklessness or its own intentional or
willful and wanton misconduct resulting in personal gain, except that:
(a) the Trustee shall not be liable for any action taken in
good faith in reliance upon the advice of professionals;
(b) 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; and
(c) the Trustee shall not be liable for any error of
judgment made in good faith.
8.02 Reliance by Trustee. Except as otherwise provided in this
Agreement:
(a) the Trustee may rely and shall be protected in acting
upon any resolution, statement, instrument, opinion, report, notice, request,
consent, order or other paper or document reasonably believed by the Trustee to
be genuine and to have been signed or presented by the proper party or parties;
(b) the Trustee may consult with independent legal counsel
to be selected by it and the advice or opinion of such counsel shall be full
and complete personal protection to the Trustee and agents of the Trust 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; and
(c) persons dealing with the Trustee shall look only to the
Trust Assets to satisfy any liability incurred by the Trustee to such person in
carrying out the terms of this Agreement, and the Trustee shall have no
personal or individual obligation to satisfy any such liability.
8.03 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 no
Trustee or agent of the Trust 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 this Trust, except for its
(page) 11
12
own recklessness or its own intentional or willful and wanton misconduct
resulting in personal gain; and all such persons shall look solely to the Trust
Assets for satisfaction of claims of any nature arising in connection with
affairs of the Trust. Nothing in this Section 8.03 shall be deemed to release
any Beneficiary from any actions or omissions occurring prior to the
Confirmation Date.
8.04 Nonliability of Trustee for Acts of Others. Nothing
contained in this Trust Agreement shall be deemed to be an assumption by the
Trustee of any of the liabilities, obligations or duties of any of the other
parties hereto or of the Debtor or New WRT; and shall not be deemed to be or
contain a covenant or agreement by the Trustee to assume or accept any such
liability, obligation or duty. Any successor Trustee may accept and rely upon
any accounting made by or on behalf of any predecessor Trustee hereunder, and
any statement or representation made as to the assets comprising the Trust
Assets or as to any other fact bearing upon the prior administration of the
Trust. A Trustee shall not be liable for having accepted and relied upon such
accounting, statement or representation if it is later proved to be incomplete,
inaccurate or untrue. A Trustee or successor Trustee shall not be liable for
any act or omission of any predecessor Trustee, nor have a duty to enforce any
claims against any predecessor Trustee on account of any such act or omission.
8.05 Indemnity. The Trustee, its employees, officers, directors
and principals (collectively, the "Indemnified Parties") shall be indemnified
by the Trust from any losses, claims, damages, liabilities or expenses
(including, without limitation, reasonable attorneys' fees, disbursements and
related expenses) which the Indemnified Parties may incur or to which the
Indemnified Parties may become subject in connection with any action, suit,
proceeding or investigation brought by or threatened against the Indemnified
Parties on account of the acts or omissions of the Trustee in its capacity as
such, including, without limitation, the Trust Actions, provided, however, that
the Trust shall not be liable to indemnify the Indemnified Parties for any of
its acts or omissions constituting fraud, gross negligence or willful
misconduct, and, provided further, that nothing in this Section 8.05 shall be
deemed to restrict the Trustee's right to receive an indemnity based on acts or
omissions taken in accordance with the provisions of Sections 8.01 and 8.02
hereof. Notwithstanding any provision herein to the contrary, the Indemnified
Parties shall be entitled to obtain advances from the Trust to cover their
expenses of defending themselves in any action brought against them as a result
of the acts or omissions of the Trustee in its capacity as such, provided,
however, that the Indemnified Parties receiving such advances shall repay the
amounts so advanced to the Trust upon the entry of a Final Order finding that
such Indemnified Parties were not entitled to any indemnity under the
provisions of this Section 8.05.
8.06 Bond. The Trustee shall serve without bond.
(page) 12
13
ARTICLE IX
COMPENSATION OF TRUSTEE
9.01 Amount of Compensation. The Trustee shall receive
compensation for its services in accordance with the terms set forth in that
certain letter agreement dated as of July 10, 1997 between the Debtor and the
Trustee.
9.02 Expenses. The Trustee shall be entitled to reimburse itself
from the Trust for all reasonable out-of-pocket expenses actually incurred by
it in the performance of its duties in accordance with this Agreement.
ARTICLE X
TRUSTEE AND SUCCESSOR TRUSTEES
10.01 Generally. The Trustee shall initially be Xxxxxx
Associates, L.L.C. The Trustee represents that it is a limited liability
corporation organized under the laws of the State of New York. If the Trustee
shall ever change its name or reorganize, reincorporate or merge with or into
or consolidate with any other entity, such Trustee shall be deemed to be a
continuing entity and shall continue to act as a Trustee hereunder with the
same liabilities, duties, powers, rights, titles, discretions and privileges as
are herein specified for a Trustee.
10.02 Resignation or Removal. The Trustee may resign and be
discharged from the trusts hereby created by giving at least 30 days prior
written notice thereof to each of the Beneficiaries. Such resignation shall
become effective on the later to occur of (a) the date specified in such
written notice, or (b) the effective date of the appointment of a successor
Trustee in accordance with Section 10.04 hereof and such successor's acceptance
of such appointment.
10.03 Removal. The Trustee may be removed, with or without cause,
by vote of Beneficiaries holding a majority of the total outstanding Units held
by Beneficiaries. Such resignation shall become effective on the later to
occur of (a) the date such action is taken by the Beneficiaries, or (b) the
effective date of the appointment of a successor Trustee in accordance with
Section 10.04 hereof and such successor's acceptance of such appointment, but
in no event more than thirty days after action is taken by the Beneficiaries.
10.04 Appointment of Successor. In the event of the death,
resignation, removal, incompetency, bankruptcy or insolvency of the Trustee, a
vacancy shall be deemed to exist and a successor shall be appointed by a vote
of the Beneficiaries who hold in the aggregate in excess of 50% of the total
outstanding number of Units held by Beneficiaries present at a meeting of all
Beneficiaries held after at least thirty days' written notice to each
Beneficiary.
(page) 13
14
10.05 Meeting. A meeting to be held pursuant to Sections 10.03
or 10.04 may be called by Beneficiaries holding at least 10% of the Units or,
alternatively, by the Bankruptcy Court.
10.06 Acceptance of Appointment by Successor Trustee. The death,
resignation, removal, incompetency, bankruptcy or insolvency of the Trustee
shall not operate to terminate the Trust created by this Agreement or to revoke
any existing agency created pursuant to the terms of this Agreement or
invalidate any action theretofore taken by the Trustee. Any successor Trustee
appointed hereunder shall execute an instrument accepting its appointment and
shall deliver one counterpart thereof to the Bankruptcy Court for filing, and,
in case of the Trustees resignation, to the retiring Trustee. Thereupon, such
successor shall, without any further act, become vested with all the
liabilities, duties, powers, rights, title, discretion and privileges of its
predecessor in the Trust with like effect as if originally named Trustee and
shall be deemed appointed pursuant to Section 1123(b) (3) (B) of the Bankruptcy
Code to retain and enforce the Trust Actions for the benefit of the
Beneficiaries. The retiring Trustee shall duly assign, transfer and deliver to
such successor all property and money held by such retiring Trustee hereunder
and shall, as directed by the Bankruptcy Court or reasonably requested by such
successor, execute and deliver an instrument or instruments conveying and
transferring to such successor upon the trust herein expressed, all the
liabilities, duties, powers, rights, title, discretion and privileges of such
retiring Trustee.
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.01 No 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 upon or
under or with respect to the Trust Assets.
11.02 Requirement of Undertaking. The Trustee may request the
Bankruptcy Court to 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 by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, including reasonable
attorneys' fees, against any party litigant in such suit; provided. however,
that the provisions of this Section 11.02 shall not apply to any suit by the
Trustee.
ARTICLE XII
JURISDICTION
The parties agree that the Bankruptcy Court shall have jurisdiction
over the Trust, the Trustee, the Trust Actions and the remaining Trust Assets,
including, without limitation, jurisdiction to determine all controversies and
disputes arising under or in connection with this Agreement. Nevertheless,
the Trustee shall have power and authority to bring any action in any court of
competent jurisdiction to prosecute the Trust Actions. (page) 14
15
ARTICLE XIII
MISCELLANEOUS PROVISIONS
13.01 Construction. This Agreement shall be governed by and
construed in accordance with the laws of the State of New York and the United
States of America; provided that the Trust and any interpretation or
enforcement of the provisions of this Agreement shall be subject to the
jurisdiction of the Bankruptcy Court as contemplated by Article XII hereof.
The Trustee's interpretation of the provisions of this Agreement and the
provisions of the Plan as they relate to the prosecution of the Trust Actions
shall be deemed conclusive in the absence of a contrary interpretation of the
Bankruptcy Court.
13.02 Severability. In the event any provision of this Agreement
or the application thereof to any person or circumstances shall be determined
by Final Order of 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 or in jurisdictions other than those as
to or in 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.
13.03 Cooperation. New WRT shall provide the Trustee, at no cost
to the Trustee, the Trust or the Beneficiaries, with such access to its books,
records and employees as the Trustee may reasonably request for the purpose of
performing its duties and exercising its duties hereunder, including, without
limitation, to assist the Trustee in prosecuting the Trust Actions.
13.04 Notices. Any notice or other communication required or
permitted to be made in accordance with this Agreement shall be in writing and
shall be deemed to have been sufficiently given, for all purposes, if delivered
personally or by telex or other telegraphic means or mailed by first class
mail:
(i) if to the Trustee, at 000 Xxxxx Xxxxxx, 00xx xxxxx, Xxx
Xxxx, Xxx Xxxx 00000, attention: Xx. Xxxxxxxx X. Xxxxxx.
(ii) if to any Beneficiary, to the last known business or
residential address of such Beneficiary, as the case may be, reflected in the
Trustee's records.
(iii) if to New WRT, at: 0000 XX 0000 Xxxx, Xxxxxxx, Xxxxx
00000, Attn: Xx. Xxxx X. Xxxxx.
13.05 Headings. The headings contained in this Agreement are
solely for convenience of reference and shall not affect the meaning or
interpretation of this Agreement or of any term or provision hereof.
(page) 15
16
13.06 Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
or caused this Agreement to be duly executed by their respective officers and
the Trustee herein has executed this Agreement, as Trustee, effective as of
the date first above written.
WRT Energy Corporation
By:
--------------------------------
Name:
Title:
Xxxxxx Associates, L.L.C.
By:
--------------------------------
Name:
Title:
(page) 16
