Exhibit 99
SALIENT 3 COMMUNICATIONS, INC.
LIQUIDATING TRUST AGREEMENT
This Liquidating Trust Agreement (this "Agreement") is made effective
as of August 8, 2003, (the "Effective Time"), by and among (i) Salient 3
Communications, Inc., a Delaware corporation ("Salient") and (ii) Xxxxxx X.
Xxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxx, Xx. and Xxxxxx X. Xxxxxx, Xx. (each a
"Trustee" and collectively the "Trustees").
BACKGROUND
A. Salient has filed a Certificate of Dissolution with the Delaware
Secretary of State effective as of August 11, 2000.
B. Section 278 of the Delaware General Corporation Law ("DGCL")
contemplates a winding up of Salient's affairs within three years of the date
of its dissolution.
C. Salient has satisfied substantially all of its known liabilities
that have matured to date.
D. The board of directors of Salient has determined that it would be
advisable to transfer all of Salient's remaining assets (the "Assets") into a
liquidating trust (the "Liquidating Trust") to allow for the satisfaction of
all remaining liabilities (the "Liabilities"), including contingent and
unknown liabilities, of Salient and that the Liquidating Trust be deemed a
"successor entity" as contemplated under Section 280(e) of the DGCL; and
E. The board of directors of Salient unanimously approved and
authorized the execution of this Agreement at a meeting held on July 16,
2003.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, receipt and
sufficiency of which is hereby acknowledged, and intending to be legally
bound hereby, the parties hereto agree as follows:
Section 1. Name and Beneficiaries. The name of the Liquidating Trust
shall be "Salient 3 Communications Liquidating Trust." Each record
stockholder of Salient at the Effective Time (the "Beneficiaries") shall have
a beneficial interest in the Assets initially in proportion to such
Beneficiary's interest in Salient on such date.
Section 2. Purpose.
2.1 The sole purpose of this Agreement and of the appointment of
the Trustees hereunder is to provide for the administration of the Assets,
including collection of contingent Assets, and the discharge of Liabilities,
if any, as they become due, or at such earlier time as the Trustees may
determine.
2.2 Assets held by the Trustees under this Agreement shall be
applied solely to the payment of (a) the Liabilities, (b) administrative fees
and expenses incurred by the Trust, (c) the fees to be paid to the Trustees
as provided for herein, and (d) reimbursement of reasonable costs and
expenses incurred by the Trustees in the performance of their obligations
hereunder.
2.3 Nothing contained herein shall be construed so as to
constitute the Beneficiaries, or their successors in interest, members of an
association. Further, the trust created hereby shall have no objective to
continue or engage in the conduct of a trade or business.
Section 3. Trustees. Xxxxxx X. Xxxxx, Xxxx X. Xxxxxx, Xxxx X. Xxxxx,
Xx. and Xxxxxx X. Xxxxxx, Xx. are hereby appointed as the initial Trustees
under this Agreement.
Section 4. Assets Placed in Trust. Salient hereby grants, delivers,
transfers, releases, sets over and conveys to the Trustees, to be held in
trust for the benefit of the Beneficiaries, all of Salient's right, title and
interest, of whatever nature, whether tangible or intangible, xxxxxx or
inchoate, in the Assets to hold, administer, collect, through legal process
or otherwise, and distribute as provided herein, and assigns to the Trustees
all of the Liabilities, subject to the payments authorized hereunder. The
Trustees hereby accept such Assets and Liabilities solely as Trustees and not
personally, subject to the terms and provisions hereof.
Section 5. Condition of Trust. The Trustees hereby accept the trust
created by this Agreement and agree to execute the trust upon the conditions
hereof, including the following:
5.1. The Trustees shall receive as compensation for their services hereunder
such fees as shall be determined by Salient's Board of Directors on or prior
to the date hereof; provided, however, that the fees to be paid to all
Trustees in the aggregate, including any successor Trustee(s) appointed
pursuant to Section 10 hereof, for any twelve-month period commencing on the
date hereof or on any anniversary thereof shall not exceed the aggregate
amount of compensation paid by Salient to the initial Trustees (in any and all
capacities) for the twelve-month period prior to the date hereof. The
Trustees shall further be reimbursed monthly from the Assets for all resonable
costs and expenses incurred by them in the performance of their obligations
hereunder.
5.2. The Trustees shall not be personally liable for any
assessments, charges, or damages, or for any obligations in carrying out or
effectuating the purpose of this Agreement. In carrying out their duties
hereunder, the Trustees shall be subject to the same fiduciary duties to the
Beneficiaries as the fiduciary duties of Salient's directors to Salient's
stockholders immediately prior to the Effective Time, and shall be exempt
from liability for monetary damages for any breach of such duty to the same
extent as permitted under the DGCL with respect to directors. Should any
Liability be asserted against any of the Trustees as the transferee of the
Assets or as the result of the assumption thereof, such Trustee may use such
part of the Assets as may be necessary in contesting any such Liability or in
payment thereof, but in no event shall such Trustee be personally liable
solely as a result of being Trustee hereunder. The Trustees shall serve
without bond. The Trustees shall have the power to obtain, in the name of
the Trust, any insurance coverage they deem advisable, including, without
limitation, insurance for the benefit of the Trustees and/or any agent of the
Trust, covering any liability of any Trustee or agent of the Trust, arising
out of their services as Trustees or agents of the Trust, as the case may be,
or their performance of their obligations hereunder.
5.3. The Trustees shall not be responsible in any manner
whatsoever for the validity or sufficiency of this Agreement.
5.4. A Trustee shall be protected in acting upon any writing
believed by him to be genuine.
5.5. The Trustees shall have the power to appoint, employ or
contract with any person or entity as the Trustees may deem necessary or
proper for the transaction of all or any portion of the activities of the
Trust. The Trustees shall not be liable for any acts or omissions of any
agents acting on their behalf elected or appointed by the Trustees in good
faith.
5.6. The Trustees may consult with legal counsel, accountants,
appraisers, or other professional consultant, and any act or failure to act
done or omitted in good faith in accordance with the opinion of any such
person shall create no liability on the part of the Trustees.
5.7. Subject to applicable law, the Trustees, in their individual
capacity or through persons that they control or in which they have an
interest, may directly or indirectly engage in or possess any interest in any
business venture, whether or not such activities are similar to or in
competition with the business activities previously engaged in by Salient.
No Trustee has any duty to present any business opportunity to the Trust
before taking advantage of such opportunity either in such Trustee's
individual capacity or through participation in any person.
5.8. To the fullest extent permitted by applicable law, any (a)
Trustee, (b) employee, representative or agent of any Trustee, and (c)
employee or agent of this Liquidating Trust, (referred to herein as an
"Indemnified Person") shall be indemnified and held harmless out of the
Assets from and against any loss, damage, liability, tax, penalty, expense or
claim of any kind or nature whatsoever incurred by such Indemnified Person by
reason of the creation, operation or termination of this Liquidating Trust or
any act or omission performed or omitted by such Indemnified Person in good
faith on behalf of this Liquidating Trust and in a manner such Indemnified
Person reasonably believed to be within the scope of authority conferred on
such Indemnified Person by this Agreement. To the fullest extent permitted
by applicable law, each Indemnified Person shall be entitled to be paid, out
of the Assets, advances on account of expenses (including legal fees)
incurred by an Indemnified Person in defending any claim, demand, action,
suit or proceeding shall, from time to time, prior to the final disposition
of such claim, demand, action, suit or proceeding upon receipt by the
Trustees of an undertaking by or on behalf of the Indemnified Person to repay
such amount if it shall be determined that the Indemnified Person is not
entitled to be indemnified as authorized in this section.
5.9. Any action by the Trustees contemplated herein may be taken
at a meeting of the Trustees, called by any Trustee upon no less than two (2)
days prior notice stating the time, place and purpose of the meeting, or
without notice or meeting, by majority written consent.
Section 6. Powers of the Trustees. The Trustees shall have the
following powers:
6.1. To endorse, deposit, and collect any and all notes, checks,
bills of exchange, trade acceptance, and other instruments for the payment of
money, in the name of Salient or otherwise, that the Trustees may receive in
connection with the Assets or Liabilities.
6.2. To determine the amounts of any consideration to be received
for or with respect to any sale or other disposition of any property of the
Liquidating Trust, and to collect, liquidate or otherwise convert into cash
all property, assets and rights in the Assets, and to pay, discharge and
satisfy all claims, expenses, charges relating to the Liabilities and other
obligations with respect to the Assets, the Liquidating Trust and the
Trustees as mandated by Sections 278 and 281(b) of the DGCL and other
applicable laws.
6.3. To invest amounts received by them as Trustees, pending
distribution; provided, however, that such investment powers shall be limited
to investments in (a) 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, (b) 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 thereof, or (c) other temporary investments not inconsistent with the
Trust's status as a liquidating trust for tax purposes.
6.4. Generally, to do everything necessary or advisable in order
to carry out the purpose of this Agreement, including appointing, engaging or
retaining any employee, agent, representative or other independent contractor
to serve the interests of the Beneficiaries.
Section 7. Distributions. The Trustees may make distributions to the
Beneficiaries out of the Assets held in trust, from time to time in their
sole discretion, to the extent such distribution would have been permitted
under applicable laws by Salient absent the creation of, and the transfer of
the Assets and Liabilities to, this Liquidating Trust.
Section 8. Beneficiaries.
8.1. The initial beneficial interest (the "Beneficial Interest")
of each Beneficiary hereof shall be determined by the Trustees in accordance
with a certified copy of Salient's stockholders list from Salient's transfer
agent as of the Effective Time. The Trustees shall have no obligations
whatsoever to any beneficial owner of a Beneficial Interest, other than the
Beneficiaries, except as otherwise mandated by applicable laws.
8.2. The rights of Beneficiaries in, to and under the Assets and
the Liquidating Trust shall not be represented by any form of certificate or
other instrument, and no Beneficiary shall be entitled to such a certificate.
The Trustees shall maintain a record of the name and address of each
Beneficiary and each Beneficiary's Beneficial Interest in the Liquidating
Trust.
8.3. A Beneficiary shall have no title to, or right to the
possession, management or control of, the Assets, and no spouse, heir or
devisee of any Beneficiary shall have any rights of dower, homestead,
inheritance, partition, or of any other right with respect to the Assets or
the proceeds therefrom.
8.4. A Beneficial Interest may not be transferred, sold,
assigned, encumbered or otherwise disposed of either by a Beneficiary in
person or by a duly authorized agent or attorney or a legal representative;
provided, however, that a Beneficial Interest may be transferred or assigned
by will, intestate succession or operation of law and that the executor or
administrator of the estate of a Beneficiary may mortgage, pledge, grant a
security interest in, hypothecate or otherwise encumber, the beneficial
interest held by the estate of such Beneficiary, if necessary, in order to
borrow money to pay estate, succession or inheritance taxes or the expenses
of administering the estate of the Beneficiary, upon written notice to, and
written consent of, the Trustees, which consent may not be unreasonably
withheld.
8.5. Since the Beneficial Interests are non-transferable, except
as otherwise provided herein, the Beneficial Interests shall not be subject
to attachment, execution, sequestration or any similar order of any court for
liquidation to satisfy the debts, obligations or liabilities of any
Beneficiary.
8.6. If a conflicting claim or demand is asserted with respect to
the ownership of Beneficial Interests, the Trustees shall be entitled, in
their sole discretion, to refuse to comply with any such conflicting claim or
demand. In so refusing, the Trustees may elect to make no payment or
distribution with respect to such Beneficial Interest, or to make such
payment to a court of competent jurisdiction, until such competing claims are
resolved to the Trustees' satisfaction, and in doing so, the Trustees shall
not be or become liable for any amounts to any such parties for their refusal
to comply with any such claim or demand, nor shall the Trustees be liable for
interest on any funds which it may so withhold.
Section 9. Reports by the Trustees.
9.1. As soon as practicable after the Effective Time, the
Trustees will mail to each Beneficiary a notice setting forth the Beneficial
Interest held by each such Beneficiary and the contact details of the
Trustees.
9.2. As soon as practicable after the end of each calendar year
during the existence of the Liquidating Trust, and after the termination of
the Liquidating Trust, the Trustees will mail a written report to the
Beneficiaries showing: (a) the Assets and Liabilities of the Liquidating
Trust at the end of such calendar year, or upon termination, as the case may
be, and the receipts and disbursements of the Trustees for such calendar year
or period, prepared by the Trustees in accordance with generally accepted
accounting principles; (b) any changes in the Assets and Liabilities not
previously reported; and (c) any material action taken by the Trustees not
previously reported. To the extent permitted, the Trustees shall file each
such report with the U.S. Securities and Exchange Commission (the
"Commission") under cover of Form 10-K using Salient's Commission file
number.
9.3. During the course of each calendar year during the existence
of the Liquidating Trust, whenever a material event relating to the Trust'
Assets occurs, the Trustees 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 on an interim report if an annual report pursuant to Section 9.2
will be issued at approximately the same time 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 Trustees or as may be required by the rules and
regulations promulgated by the Commission. To the extent permitted, the
Trustees shall file each such interim report with the Commission under cover
of Form 8-K using Salient's Commission file number.
9.4. As soon as practicable after the close of any taxable year,
the Trustees shall mail to any person who was a Beneficiary during such year
such information as is reasonably necessary for the Beneficiary to be able to
prepare its income tax returns for the previous year in an accurate and
complete manner.
Section 10. Appointment and Resignation of Trustees. Additional
Trustees may be appointed from time to time by a majority of the then
existing Trustees. Prior to taking office, any new Trustee shall
execute a written consent to act as Trustee under the terms of this
Agreement. A Trustee may resign at any time by delivering to the other
Trustee(s) its written resignation at least fifteen calendar days before
the resignation takes effect. Upon the resignation of a Trustee, the
vacancy thereby occurring shall be filled by the appointment of a successor
named by the majority of the remaining Trustees and such successor shall
execute a written consent to act as Trustee under the terms of this
Agreement. If at any time prior to the termination of this Liquidating Trust
pursuant to Section 11 below, there is no Trustee because of the resignation
or inability to act of the last Trustee with no successor appointed, a
Trustee may be appointed by the written consent of Beneficiaries holding at
least a majority of the Beneficial Interest then outstanding, or, upon
application of any Beneficiary, by a court of competent jurisdiction.
Section 11. Termination of Trust; Discharge of Trustees.
11.1. The Liquidating Trust and this Agreement shall terminate
upon the earliest of (a) such time as termination is required by the
applicable laws of the State of Delaware, (b) the distribution of all the
Assets in accordance with the terms of this Agreement, or (iii) the
expiration of a period of three years from the date the Assets are first
transferred to the Liquidating Trust; provided, however, that the Trustees,
in their discretion, may extend the existence of the Liquidating Trust to
such later date as they may designate, if they determine that an extension is
reasonably necessary to fulfill the purpose of the Liquidating Trust, as
specified in this Agreement, and, prior to such extension, the Trustees shall
have requested and received additional no-action assurances from the
Securities and Exchange Commission regarding the registration and reporting
requirements of the Trustees under the Securities Act of 1933, as amended,
the Securities Exchange Act of 1934, as amended, and any other applicable
Federal securities act.
11.2. The Trustees shall provide written notice of the effective
date of the termination of the Liquidating Trust to the Beneficiaries, and
shall file such notice with the Commission under cover of a Form 8-K.
Following such distribution and notice to the Beneficiaries, the Trustees
shall be fully released and discharged and their duties hereunder shall
cease. Upon termination, the Trustees shall provide for the retention of the
books, records, lists of holders of Beneficial Interest, and other files
which have been delivered to or created by the Trustees for a period of at
least six years and six months after the end of the year during which the
Liquidating Trust is terminated.
Section 12. Tax Matters. It is intended that the granting, assignment
and conveyance of the Assets hereunder to the Trustees for the benefit of the
Beneficiaries shall be treated for federal, state and local income tax
purposes as if Salient made such distributions directly to the stockholders
of Salient. It is further intended that for federal, state and local income
tax purposes, the Liquidating Trust shall be treated as a liquidating trust
under Treasury Regulation Sec. 301.7701-4(d) and any analogous provision of
any state or local law or regulation, and the Beneficiaries shall be treated
as the owners of their respective share of the Liquidating Trust pursuant to
Secs. 671 through 678 of the Internal Revenue Code of 1986, as amended, and
any analogous provision of state or local law or regulation, and shall be
taxed on their respective share of the Liquidating Trust's taxable income.
The Trustees shall file all tax returns required to be filed with any
governmental agency consistent with its position, including, but not limited
to, any returns required of grantor trusts pursuant to Treasury Regulation
Sec. 1.671-4(a).
Section 13. Amendment. If the Trustees determine, based upon the
written advice of counsel, that this Agreement requires an amendment to make
ministerial or administrative improvements in the management of the
Liquidating Trust or to correct, clarify, support or complete the rights and
benefits of the Beneficiaries (including the treatment for tax purposes)
purported to be provided hereunder, the Trustees may make such amendment to
the terms of this Agreement by giving written notice of such amendment to the
Beneficiaries at least fifteen calendar days prior to the effective date of
such amendment, provided, however, such amendment shall not have a material
adverse affect on the rights and benefits of the Beneficiaries hereunder.
Any amendment hereto that is not adopted in accordance with the preceding
sentence, may nevertheless be adopted if approved by the written consent of
Beneficiaries holding at least a majority of the Beneficial Interest then
outstanding. Such amendment may be proposed by the Trustees or by
Beneficiaries who hold a majority of the Beneficial Interest then outstanding
in a written proposal to the Trustees.
Section 14. Construction. This Agreement shall be governed by and
interpreted and construed under the laws of the State of Delaware.
Section 15. Third Party Beneficiaries. This Agreement is entered into
between Salient and the Trustees for the benefit of the Beneficiaries and to
fix the rights and obligations of the Trustees. This Agreement shall be
binding upon such parties, their heirs, executors, administrators, and
assigns. This Agreement is expressly not intended for the benefit of any
creditor of any such persons. Except and only to the extent provided by
applicable statute, no such creditor or any other third party shall have any
rights under this Agreement.
Section 16. Severability. If any provision of this Agreement or the
application hereof to any person or circumstance shall be found to be
invalid, illegal or unenforceable to any extent, the remainder of this
Agreement and the application hereof shall not be affected and shall be
enforceable to the fullest extent permitted by law.
Section 17. 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, the parties have executed this Liquidating Trust
Agreement as of the day and year first above written.
SALIENT 3 COMMUNICATIONS, INC.
By: /s/F.T. Xxxxx
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Name: F.T. Xxxxx
Title: Vice President and
Controller
TRUSTEES:
/s/ Xxxxxx X. Xxxxx
-------------------
Xxxxxx X. Xxxxx
/s/ Xxxx X. Xxxxxx
------------------
Xxxx X. Xxxxxx
/s/ Xxxx X. Xxxxx, Xx.
----------------------
Xxxx X. Xxxxx, Xx.
/s/ Xxxxxx X. Xxxxxx, Xx.
-------------------------
Xxxxxx X. Xxxxxx, Xx.
