Exhibit 10.2
LIQUIDATING TRUST
AGREEMENT
By and Among
THCG, Inc.,
as Grantor,
and
Xxxxxx X. Xxxx
- and -
Xxx Xxxxx,
as Trustees
Dated as of July 16, 2001
LIQUIDATING TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST, dated as of July 16,
2001, by and among THCG, Inc., a corporation organized under the laws of the
State of Delaware (the "Company"), and Xxxxxx X. Xxxx and Xxx Xxxxx, as
trustees.
WHEREAS, the Company's Board of Directors has approved
and adopted a Plan of Liquidation of THCG, LLC (the "Plan") that, among
other things, (i) provides for the establishment of a liquidating trust pursuant
to the terms and conditions hereof (the "Trust"), (ii) provides for the
appointment of the Trustees (as defined in Section 1.2 ) to serve as agent of
the Beneficiaries (as defined in Section 1.2) and trustees of the Trust, (iii)
authorizes and directs the Company to grant, assign, transfer, convey and
deliver the Transferred Assets (as defined in Section 1.2) to the Trustees as
agent for the Beneficiaries, and (iv) authorizes and directs the Trustees to
hold for and on behalf of the Beneficiaries the assets of the Trust and to
liquidate the same and distribute the proceeds thereof to the Beneficiaries in
accordance with the terms and conditions hereof; and
WHEREAS, the Trust is intended to qualify as a fixed
investment trust within the meaning of Section 301.7701-4(c) of the Income Tax
Regulations (as defined in Section 1.2) and a liquidating trust within the
meaning of Section 301.7701-4(d) of the Income Tax Regulations for Federal
income tax purposes;
NOW, THEREFORE, in consideration of the premises, and
subject to the terms and conditions hereof, effective as of the close of
business on the Record Date (as defined in Section 1.2), the Company hereby
grants, assigns, transfers, conveys and delivers unto the Trustees for the
benefit of the Beneficiaries all of the Company's right, title and interest in,
to and under all of the Transferred Assets for the uses and purposes stated
herein, and the Trustees hereby accept such Transferred Assets and such Trust on
the terms and conditions herein contained and hereby agree to perform the
obligations of the Trustees under this Agreement:
ARTICLE I
NAME AND DEFINITIONS
1.1. Name. This trust shall be known as the THCG, LLC Liquidating
Trust.
1.2. Certain Terms Defined. For all purposes of this instrument, unless
the context otherwise requires:
(a) "Agreement" shall mean this instrument as originally executed
or as it may from time to time be amended pursuant to the terms and conditions
hereof.
(b) "Beneficial Interest" shall mean each Beneficiary's
proportionate share of the Trust Assets initially determined by the ratio of the
number of Shares held by the Beneficiary as of the close of business on the
Record Date over the total number of Shares issued and outstanding as of the
close of business on the Record Date and thereafter determined by the ratio of
the number of Units held by such Beneficiary over the total number of Units held
by all Beneficiaries.
(c) "Beneficiary" shall mean each of the Stockholders and each
transferee thereof permitted pursuant to Section 3.3(a).
(d) "Code" shall mean the Internal Revenue Code of 1986, as
amended, together with any provisions amendatory thereof, supplementary thereto
or substituted therefor.
(e) "Fund" shall mean THCG Venture Partners I LLC, a limited
liability company organized under the laws of the State of Delaware.
(f) "Income Tax Regulations" shall mean the income tax regulations
under the Code, together with any provisions amendatory thereof, supplementary
thereto or substituted therefor.
(g) "Investment Company Act" shall mean the Investment Company Act
of 1940, as amended, and any successor statute, and the rules and regulations of
the SEC thereunder.
(h) "Investment Contracts" shall mean any and all stock purchase
agreements, registration rights agreements, stockholder agreements and other
agreements or instruments relating to, or entered into in connection with the
acquisition of, Investment Securities.
(i) "Investment Securities" shall mean (x) shares of common stock,
preferred stock, warrants to purchase common stock or preferred stock, notes or
other securities acquired by the Company or (or any of its subsidiaries,
including any Trust Subsidiary) for investment or in connection with the
performance of investment banking, venture development or other services, and
(y) the promissory notes payable to the order of the Company listed in Schedule
I hereto.
(j) "Indemnity Obligations" shall have the meaning given such term
in Section 2.4(b).
(k) "Liabilities" shall mean debts, claims, commitments,
liabilities or other obligations of any kind or nature whatsoever, whether
contingent or fixed.
(l) "Person" shall mean an individual, a corporation, a
partnership, an association, a joint stock company, a limited liability company,
a limited liability partnership, a trust, a joint venture, any unincorporated
organization or a government or political subdivision thereof.
(m) "Purchase Rights" shall have the meaning given such term in
Section 6.1(b).
(n) "Record Date" shall mean the date on which the Company conveys
to the Trust all of the Transferred Assets.
(o) "SEC" shall mean the Securities and Exchange Commission and
any successor agency that administers the Investment Company Act or the
Securities Act.
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(p) "Securities Act" shall mean the Securities Act of 1933, as
amended, and any successor statute and the rules and regulations of the SEC
thereunder.
(q) "Shares" shall mean the shares of common stock, par value $.01
per share ("Common Stock"), of the Company.
(r) "Special Committee" shall have the meaning given such term in
Section 5.2(c).
(s) "Stockholders" shall mean the holders of record of the
outstanding Shares of the Company as of the close of business on the Record
Date.
(t) "THCG, LLC" shall mean THCG, LLC, a limited liability company
organized under the laws of the State of Delaware that is a member of the Fund,
owns 9.9% of the membership interests of the Fund and is the sole member of THCG
Ventures.
(u) "THCG Partners" shall mean THCG Partners LLC, a limited
liability company organized under the laws of the State of Delaware that is a
member of the Fund and owns 15.1% of the membership interests of the Fund.
(v) "THCG Ventures" shall mean THCG Ventures LLC, a limited
liability company organized under the laws of the State of Delaware that is the
non-member manager of the Fund and the managing member of THCG Partners and owns
.45% of the membership interests of THCG Partners.
(w) "Transferee Liability" shall have the meaning given such term
in Section 2.4(a).
(x) "Transferred Assets" shall mean all of the Company's right,
title and interest in, to and under (i) its membership interests in THCG, LLC,
(ii) all Investment Securities, (iii) all Investment Contracts, (iv) accounts
receivable of the Company as of the Record Date, and (v) all cash and cash
equivalents of the Company on hand on the Record Date in excess of [$ ].
(y) "Trust" shall mean the Trust created by this Agreement.
(z) "Trust Assets" shall mean all the property held from time to
time by the Trustees under this Agreement, which initially shall consist of the
Transferred Assets granted, assigned, transferred, conveyed and delivered to the
Trustees by the Company pursuant to the Plan (excluding any dividends declared
but unpaid having a record date prior to the Record Date) and thereafter shall
include all dividends, rents, royalties, income, proceeds and other receipts of,
from or attributable to any assets held by the Trustees, less any of the
foregoing utilized by the Trustees to pay expenses of the Trust, satisfy
Liabilities (including Transferee Liabilities, if any) of the Trust or make
distributions to the Beneficiaries pursuant to the terms and conditions hereof.
(aa) "Trust Subsidiary" shall mean any and all of THCG, LLC, THCG
Partners, THCG Ventures and the Fund.
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(bb) "Trustees" shall mean the original Trustees named in the
beginning of this Agreement, any Trustee(s) appointed hereunder after the date
hereof pursuant to Article X and their respective successors.
(cc) "Unlocated Beneficiary" shall mean any Beneficiary who has
not been located by a mailing to the address of such Beneficiary as it appears
on the records of the Trustees.
(dd) "Units" shall have the meaning given such term in Section
3.1(b).
ARTICLE II
NATURE OF TRANSFER
2.1. Purpose of Trust.
(a) The sole purpose of the Trust is to hold the Trust Assets in a
manner calculated to conserve and protect the Trust Assets until such time as
the Trust Assets can be liquidated and to collect the proceeds from such
liquidation, and any income thereon, and to distribute the same to the
Beneficiaries in as prompt and orderly a manner as possible after the payment of
Liabilities and expenses and the making of reasonable provision for contingent
Liabilities. The Trustees shall, in an expeditious but orderly manner, liquidate
and convert to cash the Trust Assets, make timely distributions and not unduly
prolong the duration of the Trust. The Trust shall have no objective to continue
or engage in the conduct of a trade or business.
(b) The Transferred Assets and all other Trust Assets will be held
in the Trust, and the Trustees shall: (i) carry out the purpose of the Trust and
facilitate distribution of the Trust Assets; (ii) allocate, protect, conserve
and manage the Trust Assets in accordance with the terms and conditions hereof;
(iii) act on behalf of the Beneficiaries in connection with any matters; and
(iv) distribute the Trust Assets in accordance with the terms and conditions
hereof.
(c) It is intended that the grant, assignment, transfer,
conveyance and delivery of the Transferred Assets by the Company to the Trustees
pursuant hereto shall be treated for federal, state and local income tax
purposes as if the Company made such delivery directly to the Stockholders. It
is further 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 pro rata share of the
Trust pursuant to Sections 671 through 679 of the Code, and any analogous
provision of state or local law, and shall be taxed on their pro rata 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 Trustees shall file all tax returns required to be filed with any
governmental agency consistent with this position, including any returns
required of grantor trusts pursuant to Section 1.671-4(a) of the Income Tax
Regulations.
2.2. No Reversion to the Company. In no event shall any part of the
Trust Assets revert to or be distributed to the Company.
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2.3. Instruments of Further Assurance. After the delivery of the
Transferred Assets to the Trustees pursuant hereto, such Persons as shall have
the right and power to so act will, upon reasonable request of the Trustees,
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 Trustees of any property
or asset intended to be covered hereby, and to vest in the Trustees, their
successors and assigns, the estate, powers, rights, properties, assets,
instruments and funds in trust hereunder.
2.4. Payment of Liabilities; Indemnification.
(a) The Trustees do not assume any Liabilities of the Company,
except (i) the obligation of the Company to pay, when due, in accordance with
its terms, that certain promissory note dated June 29, 2001, payable to the
order of Castle Creek Technology Partners LLC in the principal amount of
$1,500,000, and (ii) the costs, fees and expenses, including fees and expenses
of investment bankers, accountants, counsel and other advisors to the Company,
incurred in connection with the establishment of the Trust and transactions
related thereto. Should any Liability of the Company be asserted against the
Trustees or the Trust as the transferees of the Transferred Assets (a
"Transferee Liability"), the Trustees may use such part of the Trust Assets as
may be necessary in contesting any such Transferee Liability or in payment
thereof. While the Trustees do not assume any Liabilities of any Trust
Subsidiary, the Trustees may in their discretion advance money or other Trust
Assets to any Trust Subsidiary to enable such Trust Subsidiary to pay its
Liabilities.
(b) The Trustees agree to indemnify and hold harmless (i) the
Company's directors and officers to the full extent the Company is obligated to
do so under its certificate of incorporation and by-laws in the event the
Company fails to discharge such obligations; (ii) the Company against any
material Liability of the Company that is not disclosed in the Company's
financial statements, in any report filed by the Company with the SEC pursuant
to the Securities Exchange Act of 1934, as amended, or in any exhibit or
schedule to that certain Plan and Agreement of Exchange between the Company and
Starcross, Inc. relating to the acquisition by the Company of Xxxxxx & Co.
Securities, Inc. of which Liability the executive officers of the Company have
actual knowledge as of the Record Date; and (iii) the Company against
liabilities that result from any action, suit or proceeding that (x) commenced
against the Company and was pending on the Record Date, including actions, suits
and proceedings involving the Company's former factoring businesses or arising
out of or relating to Company's guarantee of the payment of notes of Pacific
Financial Services Corp., one of the Company's subsidiaries that was engaged in
the factoring business, or (y) arises out of or relates to the distribution of
the Units to the Stockholders (collectively, "Indemnity Obligations"). The
Trustees agree to assume and control the defense of any such action, suit or
proceeding and to pay the fees and expenses of counsel retained by the Company
to defend the same, provided such counsel has been approved in writing by the
Trustees, such approval not to be unreasonably withheld or delayed.
(c) In no event shall the Trustees, Beneficiaries or employees or
agents of the Trust be personally liable, nor shall resort be had to the private
property of any such Person, in the event the Trust Assets are not sufficient to
satisfy Liabilities of the Trust (including Transferee Liabilities, if any, and
Indemnity Obligations).
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2.5. Assignment for Benefit of Beneficiaries. The Trustees hereby
declare and agree that they are holding the Trust Assets solely for the benefit
of the Beneficiaries of the Trust, and hereby assign to each Beneficiary a pro
rata Beneficial Interest in the Trust Assets, and retain only such incidents of
ownership as are necessary to undertake the actions and transactions authorized
herein.
2.6. Notice to Unlocated Beneficiaries. If the Trust holds Trust Assets
for Unlocated Beneficiaries, due notice shall be given to such Beneficiaries in
accordance with applicable law.
2.7. The Trust Subsidiaries.
(a) Subject to the terms of any agreements governing the
management and operation of any Trust Subsidiary, including without limitation
with respect to obligations of the directors, officers or managers of any Trust
Subsidiary to act in the best interests of the Trust Subsidiary and the
shareholders, equity holders and members of such Trust Subsidiary, the Trustees
shall act with respect to the Trust's interest in each Trust Subsidiary (whether
in connection with the Trust's position as equity owner, member or manager, or
as a director, officer, employee or agent of such Trust Subsidiary), and shall,
subject to any obligations to any other members of a Trust Subsidiary, cause
each Trust Subsidiary to act, consistent with the purposes and provision of the
Trust and this Agreement (including treating as part of the cash of the Trust
its indirect interest in all similarly available cash of the respective Trust
Subsidiary, as provided in Section 2.7(c)).
(b) The Trustees shall use their reasonable commercial efforts, to
the extent not achieved on or prior to the Record Date, (i) to amend, or cause
to be amended, the operating agreements and other governing documents of each
Trust Subsidiary to provide that (A) the overriding purpose of such entity is
the same as that set forth in Section 2.1, including no objective to continue or
engage in the conduct of a trade or business (other than as necessary to
preserve the value of its assets) and the expeditious but orderly disposition
and distribution of its assets, and (B) such Trust Subsidiary shall, to the
extent permitted under applicable law, act on a basis that is consistent with
the purposes and provisions of the Trust and this Agreement, and (ii) to cause
each Trust Subsidiary to agree in writing (A) to the provisions of this Section
2.7, and (B) whether or not its operating agreements and other governing
documents ultimately are amended, to act on a basis that is consistent with the
purposes and provisions of this Agreement.
(c) The Trustees shall cause each Trust Subsidiary to distribute
to the Trust and to such Trust Subsidiary's other equity owners, if any, in
proportion to their interests therein, on or before each annual distribution
date provided for in Section 5.4 (or such earlier time as required to be
included in the distribution by the Trust on the annual distribution date) all
of its cash (less any amounts required for payment of taxes and any other
expenses or Liabilities as needed or as may be needed by such Trust Subsidiary,
which amounts are not required to be paid to the Trust).
(d) Subject to the provisions of this Section 2.7, the Trustees
may serve as members, officers, employees or agents of a Trust Subsidiary.
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ARTICLE III
BENEFICIARIES
3.1. Beneficial Interests.
(a) The Beneficial Interest of each Stockholder as a Beneficiary
shall be determined by the Trustees in accordance with a certified copy of the
Company's stockholder list as of the close of business on the Record Date. The
Company will deliver such a certified copy of its stockholder list to the
Trustees within a reasonable time after such date. For ease of administration,
the Trustees shall express the Beneficial Interest of each Beneficiary in terms
of units ("Units"). Each record owner of shares of Common Stock as of the close
of business on the Record Date shall receive one Unit for each share of Common
Stock then owned. Each holder of Common Stock shall have the same pro rata
interest in the Trust as his interest in the Company on the Record Date.
(b) 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. The Trustees shall maintain at their place of business a record of
the name and address of each Beneficiary and such Beneficiary's Beneficial
Interest in the Trust.
3.2. Rights of Beneficiaries.
(a) Each Beneficiary shall be entitled to participate in the
rights and benefits due to a Beneficiary according to his Beneficial Interest.
Each Beneficiary shall take and hold the same subject to all the terms and
conditions hereof. The interest of the Beneficiary hereby is declared and shall
be in all respects personal property and upon the death of an individual
Beneficiary, his Beneficial 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 or the Trust. A Beneficiary shall have no title to,
right to, possession of, management of or control of the Trust Assets, or any of
them, or to or of the Trust except as herein expressly provided. No widower,
widow, heir, distributee, legatee or devisee of any Person who may be a
Beneficiary shall have any right of dower, homestead or inheritance or of
partition or of any other right, statutory or otherwise, in any property or
asset forming a part of the Trust Assets but the whole title to all of the Trust
Assets shall be vested in the Trustees and the sole interest of the
Beneficiaries or any such other Person shall be the rights and benefits given to
such Persons under this Agreement. For federal, state and local income tax
purposes, the Beneficiaries will be treated as the grantors and deemed owners of
the Trust, and they will be treated as owning undivided interests in the Trust
Assets.
(b) If any conflicting claims or demands are made or asserted with
respect to the ownership of any Units, or if there should be any disagreement
between or among the heirs, distributees, legatees or devisees 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 Trustees shall be entitled, in their sole discretion, to refuse to comply
with any such conflicting claims or demands. In so refusing, the Trustees may
elect to make no payment or distribution with respect to such Units, or to make
such payment to a court of competent
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jurisdiction or an escrow agent, and in so doing the Trustees shall not be or
become liable to any of such parties for the Trustees' failure or refusal to
comply with any of such conflicting claims or demands, nor shall the Trustees be
liable for interest on any funds so withheld. The Trustees 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 and acknowledged
agreement between or among all of such parties, and the Trustees shall have been
furnished with an executed counterpart of such agreement, or (iii) there is
furnished to the Trustees a surety bond or other security satisfactory to the
Trustees, as they shall deem appropriate in their sole discretion, to fully
indemnify them as between or among all conflicting claims or demands.
3.3. No Transfer of Interests of Beneficiaries.
(a) The Beneficial Interest of a Beneficiary may not be
transferred either by the Beneficiary personally or by a duly authorized agent
or attorney, or by the duly appointed legal representatives of the Beneficiary,
and a Beneficiary shall have no authority or power to sell, assign, transfer or
otherwise convey or encumber or in any other manner dispose of his Beneficial
Interest; provided, however, that the Beneficial Interest shall be assignable or
transferable by will, intestate succession or operation of law; and provided,
further, that the executor administrator or other personal representative 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 consent of the Trustees, which consent
shall not be unreasonably withheld.
(b) The Beneficial Interests of the Beneficiaries shall not be
subject to attachment, levy, execution, sequestration or any order of a court,
nor shall such interests be subject to the contracts, pledges, engagements or
Liabilities of any Beneficiary, but the interest of a Beneficiary shall be paid
by the Trustees to the Beneficiary free and clear of all assignments,
attachments, levies, executions, sequestrations and orders and shall become the
property of a Beneficiary only when actually received by such Beneficiary.
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.1. Duration. The existence of the Trust shall terminate upon the
earliest of (i) a termination required by the applicable laws of the State of
New York, (ii) the distribution of all the Trust Assets as provided in Section
5.5, or (iii) the expiration of a period of three years from the date of the
creation of the Trust; provided, however, that the Trustees, in their sole
discretion, may extend the existence of this Trust to such later date, but no
event later than five years from the date of the creation of the Trust, as they
may designate if they determine that an extension is reasonably necessary either
to pay or make provision for then known Liabilities or to conserve and protect
the Trust Assets for the benefit of the Beneficiaries.
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4.2. Other Obligations of Trustees upon Termination. Upon
distribution of all the Trust Assets, the Trustees shall provide for the
retention of the books, records, lists of holders of Units and files which shall
have been delivered to or created by the Trustees with respect to the Trust. In
the Trustees' sole discretion, all of such records and documents may be
destroyed at any time after seven years (or such longer period as may be
required by applicable law) from the distribution of all of the Trust Assets.
Except as otherwise expressly provided herein, upon the distribution of all of
the Trust Assets, the Trustees shall have no further duties or obligations
hereunder.
ARTICLE V
ADMINISTRATION OF TRUST ASSETS
5.1. Disposition of Trust Assets. Subject to the express provisions of
Section 6.1 and the other express provisions of this Agreement, the Trustees
may, at such times and for such amounts as they may deem appropriate, collect,
liquidate, reduce to cash, sell, assign, transfer, exchange, convey or otherwise
dispose of all or any part of the Trust Assets as they deem appropriate at
public or private sale for cash, securities or other property or upon credit
(either secured or unsecured) and upon such other terms and conditions as the
Trustees shall determine in their sole discretion.
5.2. Transactions with Related Persons; Appointment and Authority of
Special Committee.
(a) Notwithstanding any other provision of this Agreement, the
Trustees shall not, directly or indirectly, sell or otherwise transfer all or
any part of the Trust Assets to, or contract with, or enter into any material
transaction with (i) any Trustee, employee, agent or Beneficiary (acting in
their individual capacities) of the Trust, (ii) any member of the family of any
Trustee or any employee, agent or Beneficiary of the Trust, or (iii) any Person
(other than the Company or any Trust Subsidiary) of which any Trustee, employee,
agent or Beneficiary of the Trust, or any such family member, is an affiliate by
reason of being a trustee, director, officer, partner, member or direct or
indirect beneficial owner of 5% or more of the outstanding capital stock, shares
or other equity interests of such Person, unless, in each such case in clauses
(i), (ii) and (iii) of this Section 5.2(a), such transaction has been previously
approved by the Board of Directors of the Company as part of the Plan or
otherwise by the Special Committee; provided, however, that no such approval of
the Special Committee shall be required for any contract or transaction that is
entered into with any Beneficiary (other than a Beneficiary who is also a Person
otherwise described in clause (i), (ii) or (iii) of this Section 5.2(a)) in the
ordinary course of the administration of the Trust on an arms-length basis on
terms that are fair and reasonable to the Trust. The Trustees are entitled to
rely in good faith on certificates of the Trustees, employees, agents and
Beneficiaries of the Trust with respect to their interests in any transaction.
(b) Notwithstanding any other provision of this Agreement, the
Trustees shall not sell any Trust Asset in a privately negotiated transaction or
series of related transactions (other than as a minority owner in a Person that
is being sold, merged, acquired or liquidated) for more than $1,000,000 in
consideration or settle or compromise any action, suit or proceeding or
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any other contingent Liability for an amount in excess of $250,000 unless in any
such case such sale, settlement or compromise has been previously approved by
the Special Committee. The provisions of this Section 5.2(b) and Section 5.2(a)
shall be applicable notwithstanding any other provision of this Agreement,
express or implied.
(c) The Trustees shall appoint a special committee (the "Special
Committee"), initially consisting of three members who shall be: Xxxxxxx
Xxxxxxx, Xxxxx Xxxxx and Xxxxxxx Xxxxxx. Any vacancy on the Special Committee,
and any increase in the number of members of the Special Committee, shall be
filled by the then existing or remaining members of the Special Committee by
majority vote. If there are no remaining members of the Special Committee,
members (in such number as the Beneficiaries entitled to appoint members of the
Special Committee shall determine) of the Special Committee shall be appointed
by Beneficiaries who are not Trustees, members of their families and any
affiliate of any of the foregoing, acting by a majority in Beneficial Interest.
Each member of the Special Committee shall be independent of each other member.
The Special Committee shall be entitled to receive any information it may
request in writing with respect to the administration of the Trust, including,
without limitation, information with respect to transactions described in
clauses (i), (ii) and (iii) of Section 5.2(a) and in Section 5.2(b), and shall
provide its approval or disapproval of such transaction as soon as practicable
or as may be required under the then existing circumstances, taking into account
the requirements of any other party to such transaction, and in no event in more
than 30 days. Such information shall be held and dealt with on a strictly
confidential basis; provided, however, that the Special Committee shall be
entitled to share such information with Beneficiaries on a confidential basis
and may disclose such information in connection with a legal proceeding to
enforce any provision of this Agreement. The Special Committee shall not be
entitled to review nor be required to approve any other matters relating to this
Agreement or the Trust, or its administration, including any payments made by
the Trust to the Trustees, except as provided in Section 10.2.
5.3. Payment of Claims, Liabilities and Expenses. The Trustees shall
pay from the Trust Assets all Liabilities of the Trust and all Transferee
Liabilities, if any, which the Trustees or the Trust may be obligated to pay as
transferees of the Transferred Assets, including interest, penalties, taxes,
assessments and public charges of every kind and nature, and the costs, charges
and expenses connected with or arising 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 Trustees and may in their discretion advance money or other Trust
Assets to a Trust Subsidiary to enable such Trust Subsidiary to pay its
Liabilities.
5.4. Interim Distributions. At such times as may be determined by them
in their sole discretion, the Trustees shall distribute, or cause to be
distributed, to the Beneficiaries, in proportion to the number of Units held by
each Beneficiary as of the record date for such distribution determined by the
Trustees in their sole discretion, such cash or other property comprising a
portion of the Trust Assets as the Trustees may in their sole discretion
determine may be distributed without detriment to the conservation and
protection of the Trust Assets; provided, however, that the Trustees shall
distribute, or cause to be distributed, at least annually to the Beneficiaries
any cash proceeds from the sale of Trust Assets in excess of a reasonable
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amount (as determined by the Trustees) to satisfy the Liabilities (including
Transferee Liabilities, if any) and expenses described in Section 5.3.
5.5. Final Distribution. If the Trustees determine that all Liabilities
of the Trust (including Transferee Liabilities, if any) and expenses of the
Trust have been paid or discharged, and all of the Trust Assets have been
converted into cash, or if the existence of the Trust shall terminate pursuant
to Section 4.1, the Trustees shall, as expeditiously as is consistent with the
conservation and protection of the Trust Assets, distribute the Trust Assets to
the Beneficiaries in proportion to the number of Units held by each Beneficiary
as of the record date for such distribution determined by the Trustees in their
sole discretion. The Trustees shall hold in the Trust and thereafter make
disposition of all liquidating distributions and other payments due any
Unlocated Beneficiary in accordance with laws of the State of Delaware, subject
to applicable state laws regarding escheat and abandoned property.
5.6. Reports to Beneficiaries and Others. As soon as practicable after
the end of each taxable year of the Trust and after the termination of the
Trust, the Trustees 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
Trustees for such taxable year or period, which account shall be prepared in
accordance with generally accepted accounting principles but need not be
certified by an independent certified public accountant, (ii) any changes in the
Trust Assets which they have not previously reported, and (iii) any action taken
by the Trustees in the performance of their duties under this Agreement which
they have not previously reported and which, in their opinion, materially
affects the Trust Assets. In addition any written report shall provide a
narrative description, in reasonable detail, of the status of each material
holding of Investment Securities of the Trust or any Trust Subsidiary. Such
annual report shall be filed with the SEC under cover of Form 10-K using the
file number of the Company, to the extent required by applicable law. The
Trustees may submit similar reports for such interim periods during the taxable
year as they deem advisable. The taxable year of the Trust shall end on December
31 of each year unless the Trustees in their sole discretion deem it advisable
to establish some other date as the date on which the taxable year of the Trust
shall end and such other date is permitted under the Code and the Income Tax
Regulations.
5.7. Federal Income Tax Information. As soon as practicable after the
close of each taxable year, the Trustees shall mail to each Person who was a
Beneficiary at the close of the year, such information as is required by Section
1.671-4 of the Income Tax Regulations and such other information as is
reasonably available to the Trustees that may be helpful in determining the
amount of gross income attributable to the Trust that such Beneficiary should
include in his Federal income tax return for the preceding year. In addition,
after receipt of a request in good faith, or in their sole discretion without
such request or if required by applicable law, the Trustees shall furnish to any
Person who has been a Beneficiary at any time during the preceding year a
statement containing such further information as is reasonably available to the
Trustees which shall be helpful in determining the amount of taxable income
which such Person should include in such Person's Federal income tax return.
5.8. Books and Records. The Trustees shall maintain in respect of the
Trust and the holders of Units books and records relating to the Trust Assets
and the income and Liabilities of
11
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 provisions of 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 Trustees under Section 5.6. Except as provided in
Section 5.6, nothing in this Agreement requires the Trustees 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. Holders of the Units shall have the right upon thirty (30) days'
prior written notice delivered to the Trustees to inspect during normal business
hours such books and records (including financial statements); provided that, if
so requested, such holder shall have entered into a confidentiality agreement
satisfactory in form and substance to the Trustees.
5.9. Employment of Agents, etc.
(a) The Trustees 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, employees, advisors or managers of the Trust. However,
the Trustees are not and shall not be required personally to conduct the
activities of the Trust, and, consistent with their ultimate responsibility as
stated above, the Trustees shall have the power to appoint, employ or contract
with any Person or Persons (including one or more of themselves or any Person in
which one or more of them may be directors, officers, stockholders, partners,
members or trustees notwithstanding any law, rule or regulation against
self-dealing, but subject to the provisions of Section 5.2) as the Trustees may
deem necessary or proper for the transaction of all or any portion of the
activities of the Trust. The Trustees may therefore employ or contract with such
Person or Persons and may grant or delegate such authority to such Persons as
the Trustees may in their sole discretion deem necessary or desirable to carry
out the purpose of the Trust without regard to whether such authority is
normally granted or delegated by trustees.
(b) The Trustees shall have the power to determine the terms and
compensation of any Person whom they may employ or with whom they may contract
pursuant to Section 5.9(a), subject to the provisions of Section 5.2. The
Trustees may exercise broad discretion in allowing such Persons to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trustees and to make executive decisions
which conform to general policies and general principles previously established
by the Trustees.
(c) No such Person shall be required to administer the Trust as
its sole and exclusive function and he 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; provided, however,
that the Trustees shall devote such time and effort to their duties hereunder as
are reasonably necessary to discharge their duties in accordance with the
provisions of this Agreement.
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ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEES
6.1. Limitations on Trustees. The Trustees shall not at any time, on
behalf of the Trust or Beneficiaries, enter into or engage in any trade or
business, and no part of the Trust Assets shall be used or disposed of by the
Trustees in furtherance of any trade or business, except to the extent that both
(a) the business was engaged in by the Trust Subsidiaries immediately prior to
the Record Date, and (b) the continuing conduct of the business activities is
reasonably necessary to conserve or maintain the Trust Assets and to facilitate
the expeditious liquidation of the Trust Assets. The Trustees shall be
restricted to the conservation and protection of the Trust Assets and the
administration, collection and distribution thereof in accordance with the
provisions of this Agreement. In no event shall the Trustees take any action
that would jeopardize the status of the Trust as a "liquidating trust" for
federal income tax purposes within the meaning of Section 301.7701-4(d) of the
Income Tax Regulations. This limitation shall apply regardless of whether such
action is deemed by the Trustees to be necessary or proper for the conservation
and protection of the Trust Assets. The Trustees shall not invest any of the
funds held as Trust Assets, except that the Trustees may invest any portion of
the Trust Assets 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, certificates of deposit or other
time deposit accounts which mature not later than one year from the date of
acquisition thereof and which are issued by a commercial bank or savings
institution organized under the laws of the United States of America or any
state thereof; (iii) any other investments which may be determined by the
Trustees to be permissible under Revenue Procedure 82-58, as the same may be
amended, supplemented or modified, and the Investment Company Act; or (iv)
equity securities (w) upon the exercise of any warrant or other convertible
security forming part of the Trust Assets or held by any Trust Subsidiary, (x)
in a rights offering made to then existing stockholders of a Person in which the
Trust or any Trust Subsidiary beneficially owns Investment Securities, (y) upon
the exercise of a Purchase Right, or (z) in exchange, in whole or in part, for
equity or debt securities of any other Person, if in any case in this clause
(iv) the Trustees reasonably believe that by doing so (1) the value of the Trust
Assets or the assets of such Trust Subsidiary will be conserved and protected or
(2) the ability of the Trust or any Trust Subsidiary to liquidate any such asset
for cash will be materially enhanced or accelerated and neither Trustee receives
a personal benefit as a result thereof that is not received by all holders of
Units on a pro rata basis (provided that the Trustees shall dispose of such
equity or debt securities as soon as is practicable on a basis that is
consistent with the purpose of the Trust). Notwithstanding the foregoing, in no
event shall the Trustees:
(a) reinvest or permit any Trust Subsidiary to reinvest any
proceeds from the sale of any Investment Security or any other Trust Asset in
any manner, except as expressly permitted by any provision of the immediately
preceding sentence of this Section 6.1;
(b) exercise or permit any Trust Subsidiary to exercise any right
under any Investment Contract to acquire additional securities, whether by way
of a pre-emptive right, a right of first offer or first refusal or otherwise
(collectively, "Purchase Rights"), except as
13
expressly permitted by any provision of clause (iv) of the immediately preceding
sentence of this Section 6.1;
(c) sell, assign, transfer, convey or otherwise dispose of any
Investment Security, or permit any Trust Subsidiary to sell, assign, transfer,
convey or otherwise dispose of any Investment Security, except in compliance
with the registration requirements of the Securities Act or any state securities
laws or an applicable exemption from such registration requirements; or
(d) take any action, or permit any Trust Subsidiary to take any
action, that would violate the Investment Company Act.
6.2. Specific Powers of Trustees. Subject to the provisions of Sections
5.2, 6.1 and any other express limitation set forth herein, the Trustees shall
have the following specific powers in addition to any powers conferred upon them
by any other provision of this Agreement or any statutory laws of the State of
New York; provided, however, that the enumeration of the following powers shall
not be considered in any way to limit or control the power of the Trustees to
act as specifically authorized by any other provision of this Agreement or to
act in such a manner as the Trustees may deem reasonably necessary or
appropriate to conserve and protect the Trust Assets or to confer upon the
Beneficiaries the benefits intended to be conferred upon them by this Agreement:
(a) To determine the time and manner of, and the nature and amount
of the consideration to be received with respect to, any sale, assignment,
transfer, conveyance or other disposition of, or the grant of interests in, the
Trust Assets, or any of them, and to effect such sale, assignment, transfer,
conveyance, other disposition or grant;
(b) To collect, liquidate or otherwise convert into cash, or such
other property as they deem appropriate, all property, assets and rights forming
a part of the Trust Assets, and to pay, discharge and satisfy all Liabilities,
including Transferee Liabilities, if any, and expenses existing with respect to
the Trust Assets, the Trust or the Trustees and, in their discretion, to advance
money or other Trust Assets to a Trust Subsidiary to enable such Trust
Subsidiary to pay its Liabilities;
(c) To elect, appoint, engage, retain or employ any Person as
agent, representative, employee or independent contractor (including any
investment advisor, accountant, transfer agent, attorney-at-law, broker or
otherwise) in one or more capacities, and to pay compensation from the Trust
Assets for services in as many capacities as such Person may be so elected,
appointed, engaged, retained or employed; to prescribe the titles, powers and
duties, terms of service and other terms and conditions of the election,
appointment, engagement, retention or employment of such Person; and, except as
prohibited by law, to delegate any of the powers and duties of the Trustees to
any one or more Trustees, agents, representatives, employees, independent
contractors or other Persons;
(d) The Trustees may (i) purchase and sell securities through any
financial services firm of which any individual Trustee is a partner, member,
officer or employee (or that is owned by or affiliated with any corporate
Trustee) and pay the firm's usual commissions on
14
such transactions; (ii) appoint any such firm as custodian (unless a corporate
Trustee is acting) and pay the firm's usual fees for such services; and (iii)
retain any such firm as an investment adviser or general agent and pay the
firm's usual fees for such services. Any individual Trustee who is a partner,
member, officer, or employee of any such firm shall be entitled to receive in
such capacity his share of the compensation and fees paid by the Trust to such
firm to the same extent as if he were not a Trustee and without any liability to
any Beneficiary;
(e) To retain and set aside such funds out of the Trust Assets as
the Trustees shall deem necessary or expedient to pay and to pay, or provide for
the payment of, (i) unpaid Liabilities, including Transferee Liabilities, if
any, of the Trust, (ii) contingencies, and (iii) the expenses of administering
the Trust and the Trust Assets;
(f) To hold legal title to the Trust Assets in the name of the
Trust, or in the name of one or more of the Trustees, or of any other Person,
without disclosure of the interest of the Trust therein; to cause any
investments of any part of the Trust Assets to be registered and held in the
name of any one or more of their names or in the name of a nominee or nominees
without increase or decrease of any obligation with respect thereto;
(g) To institute or defend actions or declaratory judgments or
other actions, arbitrations or mediations and to take such other action, in the
name of the Trust or as otherwise required, as the Trustees may deem necessary
or desirable to protect and enforce the rights vested in the Trustees to the
Trust Assets and to enforce any instruments, contracts, agreements, causes of
action or rights relating to or forming a part of the Trust Assets, including
the Investment Contracts;
(h) To determine conclusively from time to time the value of and
to revalue the securities and other property and assets of the Trust, in
accordance with independent appraisals or other information as they deem
satisfactory;
(i) To cancel, terminate or amend any instrument, contract
(including any Investment Contract), agreement or obligation relating to or
forming a part of the Trust Assets, and to execute new instruments, contracts,
agreements or obligations notwithstanding that the terms of any such instrument,
contract, agreement or obligation may extend beyond the terms of the Trust;
provided that no such new instrument, contract, agreement or obligation shall
permit the Trustees to engage in any activity prohibited by any provision of
Section 6.1;
(j) To vote by proxy or otherwise on behalf of the Beneficiaries
and with full power of substitution all shares of stock and all securities
(including Investment Securities) held by the Trustees hereunder and to exercise
every power, election, discretion, option and subscription right and give every
notice, make every demand and to do every act or thing in respect to any shares
of stock or any securities (including Investment Securities) held by the
Trustees which the Trustees might or could do if they were the absolute owners
thereof, subject to the provisions of Section 6.1;
(k) To undertake or join in or consent to any merger, plan of
reorganization, consolidation, liquidation, dissolution, readjustment or other
transaction of any Person, any of whose shares of stock or other securities
(including Investment Securities), partnership,
15
membership or other interests, obligations or properties may at any time
constitute a part of the Trust Assets or part of the assets of any Trust
Subsidiary, and to accept the substituted shares of stock, bonds, securities,
partnership, membership or other interests, obligations, properties and assets
and to hold the same in trust in accordance with the provisions hereof;
(l) In connection with the sale or other disposition or
distribution of any securities (including Investment Securities) held by the
Trustees, to comply with the Securities Act and applicable state securities
laws, and to enter into agreements relating to the sale or other disposition or
distribution thereof;
(m) To authorize transactions between corporations or other
Persons whose securities (including Investment Securities), or other interests
therein (either in the nature of debt or equity), are held by the Trustees as
part of the Trust Assets, subject to the provisions of Sections 5.2 and 6.1;
(n) To perform any act or obligation authorized, permitted or
required, or exercise or waive any right, under any instrument, contract
(including any Investment Contract), agreement, right or obligation 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, or is prohibited by any provision of Section 6.1;
(o) To assign, transfer, convey or otherwise dispose of any right
(including any Purchase Right) under any instrument, contract (including any
Investment Contract), agreement or right relating to or forming a part of the
Trust Assets to any Person, including any Trustee or any affiliate of any
Trustee or of the Company, for such value as the Trustees may in good xxxxx xxxx
appropriate;
(p) In the event any of the property or assets which is or may
become a part of the Trust Assets is situated in any state or other jurisdiction
in which the Trustees are not qualified to act as Trustees, to nominate and
appoint an individual or corporate trustee qualified to act in such state or
other jurisdiction in connection with the property or assets situated in that
state or other jurisdiction as a trustee of such property or assets and require
from such trustee such security as may be designated by the Trustees. 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 and this
Agreement, except as limited by the Trustees 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
Trustees herein appointed for all monies, properties and other assets which may
be received by it in connection with the administration of such property or
assets. The Trustees hereunder may remove such trustee, with or without cause,
and appoint a successor trustee at any time by the execution by the Trustees of
a written instrument declaring such trustee removed from office, and specifying
the effective date of removal; and
(q) To do and perform, or refrain from doing or performing, 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
Trust Assets held by the Trustees pending sale or
16
other disposition thereof or distribution thereof to the Beneficiaries, or to
carry out the purposes of the Trust and this Agreement, subject to the
provisions of Sections 5.2, 6.1 and the other express provisions of this
Agreement, as if the Trustees were the absolute owner thereof.
ARTICLE VII
CONCERNING THE TRUSTEES, BENEFICIARIES, EMPLOYEES AND AGENTS
7.1. Generally. The Trustees accept and undertake to discharge the
trust created by this Agreement upon the terms and conditions hereof on behalf
of the Beneficiaries. The Trustees shall exercise such of the rights and powers
vested in them by this Agreement and use reasonable business judgment in their
exercise. No provision of this Agreement shall be construed to relieve the
Trustees from liability for their own grossly negligent action, their own
grossly negligent failure to act, or their own fraud or willful misconduct
knowingly and intentionally committed in bad faith, except that:
(a) Neither Trustee shall be responsible for the acts or omissions
of the other Trustee if done or omitted without his knowledge or consent unless
it shall be proved that such Trustee was grossly negligent in ascertaining the
pertinent facts, and no successor Trustee shall be in any way responsible for
the acts or omissions of any Trustee in office prior to the date on which he
becomes a Trustee;
(b) Neither Trustee shall 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 Trustees;
(c) In the absence of bad faith on the part of a Trustee, a
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to such Trustee and in conformity with the requirements of this
Agreement; but in the case of any such certificates or opinions which are
specifically required to be furnished to the Trustees by any provision hereof,
the Trustees shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Agreement; and
(d) No Trustee shall be liable for any error of judgment made in
good faith. No Trustee shall be liable with respect to any action taken or
omitted to be taken by him in good faith in accordance with the direction of
Beneficiaries having aggregate Beneficial Interests of more than 50% of the
aggregate Beneficial Interests of all Beneficiaries relating to or in connection
with the exercise or failure to exercise any right or power conferred upon the
Trustees under this Agreement.
7.2. Reliance by Trustees. Except as otherwise expressly provided in
any provision of Section 7.1:
(a) The Trustees may rely and shall be protected in acting upon
any resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order or
17
other paper or document believed by them to be genuine and to have been signed
or presented by the proper party or parties;
(b) The Trustees may consult with legal counsel, auditors or other
experts to be selected by them, and the advice or opinion of such counsel,
auditors or other experts shall be full and complete protection to all Trustees,
employees and agents of the Trust in respect of any action taken or omitted by
them in good faith and in reliance on, or in accordance with, such advice or
opinion;
(c) Persons dealing with Trustees shall look only to the Trust
Assets to satisfy any Liability (including any Transferee Liability, if any)
incurred by the Trustees to such Person under this Agreement or otherwise in
carrying out the terms of this Trust, and the Trustees shall have no personal or
individual obligation to satisfy any such Liability (including any Transferee
Liability, if any); and
(d) As far as practicable, the Trustees 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 Trustees 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, however, that the omission of such provision
from any such instrument shall not render the Beneficiaries, Trustees or their
agents liable in any manner nor shall the Trustees be liable to any Person for
such omission.
7.3. Safekeeping of Trust Assets. All moneys and other assets received
by the Trustees shall, until distributed or paid over as herein provided, be
held in trust for the benefit of the Beneficiaries, but need not be segregated
from other Trust Assets, unless and to the extent required by law. The Trustees
shall be under no liability for interest or producing income on any moneys
received by them hereunder and held for distribution or payment to the
Beneficiaries, except as such interest shall actually be received by the
Trustees.
7.4. Liability to Third Persons. No Beneficiary shall be subject to any
personal Liability (including any Transferee Liability, if any) whatsoever, in
tort, contract or otherwise, to any Person in connection with the Trust Assets
or the affairs of the Trust; and no Trustee, employee or agent of the Trust
shall be subject to any personal Liability (including any Transferee Liability,
if any) 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 for his own gross negligence, fraud or willful misconduct knowingly and
intentionally committed in bad faith; and 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 Trustees may maintain insurance
for the protection of the Trust Assets, the Beneficiaries, Trustees, employees
and agents in such amount as the Trustees shall in their sole discretion deem
adequate to cover all foreseeable Liabilities, including Liabilities for
indemnification under Section 7.6 or otherwise, to the extent available at
reasonable rates.
7.5. Recitals. Any written instrument creating an obligation of the
Trust shall be conclusively taken to have been executed or done by a Trustee,
employee or agent of the Trust only in his capacity as Trustee under this
Agreement or in his capacity as employee or agent of
18
the Trust and not in his individual capacity, whether or not such instrument
states that such Person is acting in his capacity with respect to the Trust.
7.6. Indemnification. Each Trustee and Person appointed or employed by
the Trustees pursuant to Section 5.9, and the directors, officers, partners,
equity owners, employees and agents of each such Person, and each member of the
Special Committee (each an "Indemnified Person" and collectively, the
"Indemnified Persons") shall 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 any Trustee, Person
appointed or employed by the Trustees pursuant to Section 5.9 or member of the
Special Committee, while in office or thereafter, by reason of his being or
having been such a Trustee, employee, agent or member of the Special Committee,
and (ii) in the case of any director, officer, partner, equity owner, employee
or agent of any such Person by reason of any such Person exercising or failing
to exercise any right or power hereunder; provided, however, that the
Indemnified Person shall not be entitled to such indemnification in respect of
any matter as to which the Indemnified Person shall have been adjudicated to
have acted with gross negligence, fraud or willful misconduct knowingly and
intentionally committed in bad faith; and provided, further, however, that, as
to any matter disposed of by a compromise or settlement payment by such
Indemnified Person pursuant to a consent decree, settlement agreement or
otherwise, indemnification either for said payment or for any other expenses
shall not be provided if the Trustees shall have received written advice from
independent counsel, which counsel is approved by the Trustees, to the effect
that such Indemnified Person acted with gross negligence, fraud or willful
misconduct knowingly and intentionally committed in bad faith. The rights
accruing to any Indemnified Person under this Section 7.6 shall not exclude any
other right to which the Indemnified Person may be lawfully entitled; provided,
however, 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 Trustees may make advance payments in connection with
indemnification under this Section 7.6; 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 it is subsequently
determined that the Indemnified Person is not entitled to such indemnification.
The Trustees may purchase such insurance as they believe, in their sole
discretion, adequately insures that each Indemnified Person shall be indemnified
against any such Liability or expense pursuant to this Section 7.6. Nothing
contained herein shall restrict the right of the Trustees 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.
7.7. Rights of Trustees, Employees, Independent Contractors and Agents
To Own Units or Other Property and To Engage in Other Business. Any Trustee,
member of the Special Committee, employee, independent contractor or agent of
the Trust may acquire, own and hold Units for his individual account and may
exercise all rights therein, thereof and thereunder to the same extent and in
the same manner as if he were not such a Trustee, employee, independent
19
contractor or agent. Any such Trustee, member of the Special Committee,
employee, independent contractor or agent may, in his personal capacity or in a
capacity of trustee, officer, director, stockholder, partner, member, employee
or agent of any Person or otherwise, have business interests and holdings
similar to or in addition to those relating to the Trust. Subject to the
provisions of Article V, any Trustee, member of the Special Committee, employee,
independent contractor or agent of the Trust may be a trustee, officer,
director, stockholder, partner, member, employee, agent or independent
contractor of, or otherwise have a direct or indirect interest in, any Person
which may be engaged to render advice or services to the Trust, and may receive
compensation from such Person as well as compensation as Trustee, employee,
independent contractor or agent or otherwise hereunder. None of these activities
shall be deemed to conflict with his duties as Trustee, member of the Special
Committee, employee, independent contractor or agent.
7.8. Powers of Trustees to Deal with Trust in Non-Fiduciary Capacity.
Except as limited by any provision of Section 5.2 or any other express provision
herein, the Trustees may, deal with the Trust, including loan property to,
borrow property from, purchase property from or otherwise deal with the Trust,
as if they were not Trustees thereof.
7.9. No Duty Not to Compete. The Trustees and the members of the
Special Committee, in their individual capacity or through Persons which they
control or in which they have an interest, may engage in or possess any interest
in any business venture, including, but not limited to, the ownership,
financing, management of or the investment in securities, or the provision of
any services in connection with such activities. No Trustee or member of the
Special Committee has any duty to present any business opportunity to the Trust
before taking advantage of such opportunity either in his individual capacity or
through participation in any Person.
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
8.1. Action by Trustees. All action required or permitted to be taken
by the Trustees, in their capacity as Trustees, may be taken by approval,
consent, vote or resolution of any one of the Trustees then serving, except as
otherwise provided by resolution adopted or approved by both of the Trustees.
8.2. Delegation. An individual Trustee may, at any time and from time
to time, by an instrument in writing delegate any or all of his rights, powers,
duties, authority and privileges, whether or not discretionary, to any other
Trustee for such period or periods of time as may be specified in such written
instrument; provided, however, that any such instrument shall be revocable at
any time.
8.3. Reliance on Statement by Trustees. Any Person dealing with the
Trustees shall be fully protected in relying upon the Trustees' certificate
signed by any one or more of the Trustees that they have authority to take any
action under the Trust and under this Agreement. Any Person dealing with the
Trustees shall be fully protected in relying upon the Trustees' certificate
setting forth the facts concerning any action by the Trustees or the calling of
any meeting of the
20
Beneficiaries, the giving of notice thereof and the action taken at such
meeting, including the aggregate number of Units held by the Beneficiaries
taking such action.
ARTICLE IX
COMPENSATION OF TRUSTEES
9.1. Amount of Compensation. Notwithstanding any commissions or other
compensation fixed by law for trustees, no Trustee shall receive any
compensation for services as a Trustee hereunder.
9.2. Expenses. Each Trustee shall be reimbursed from the Trust Assets
for all out-of-pocket expenses reasonably incurred by him in the performance of
his duties in accordance with this Agreement.
ARTICLE X
TRUSTEES AND SUCCESSOR TRUSTEES
10.1. Number and Qualification of Trustees. Subject to the provisions
of Section 10.3 relating to the period pending the appointment of a successor
Trustee, there shall be two Trustees of this Trust, each of whom shall be a
citizen and resident of or a corporation which is incorporated 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 New York. If any
corporate Trustee shall 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 rights, powers,
obligations, duties, titles, discretions, privileges, indemnities and immunities
as are herein specified for a Trustee.
10.2. Resignation and Removal. Any Trustee may resign without the
approval of any court upon sixty days prior notice given by such Trustee in
writing or electronically to all members of the Special Committee (with a copy
to Dechert, 00 Xxxxxxxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, attn: Xxxxxx X.
Xxxxxx, Esq.), unless the Special Committee shall elect to have such resignation
be effective on an earlier date, and be discharged from the Trust hereby created
by giving written notice thereof to the remaining Trustee and by mailing such
notice to the Beneficiaries at their respective addresses as they appear in the
records of the Trustees. Such resignation shall become effective on the day
specified in such notice or upon the appointment of such Trustee's successor and
such successor's acceptance of such appointment, whichever is earlier; provided
that the resigning Trustee is not the sole Trustee, in which event such
resignation shall take effect upon the qualification of a successor Trustee. Any
resignation by a Trustee who is also a "Manager" of THCG, LLC shall constitute
the resignation by such Trustee also as a "Manager" of THCG, LLC. Any Trustee
may be removed if the Special Committee in good faith determines that there is
"cause" to do so and such determination is approved by Beneficiaries having an
aggregate Beneficial Interest of at least 50% of the total Beneficial Interests
(other than Beneficial Interests of the Trustees, members of their families and
affiliates of any of the foregoing). The term "cause" shall mean any of the
following: (i) conviction of a
21
felony; (ii) perpetration of an intentional and knowing fraud against or
adversely affecting the Trust or any agent or employee thereof or adversely
affecting THCG, LLC; (iii) willful and substantial failure of a Trustee to
perform his duties hereunder (other than as a result of total or partial
incapacity due to physical or mental illness or injury) or a willful and
substantial breach by the Trustee of his obligations under this Agreement; or
(iv) in the event that the Trustee is also a "Manager" of THCG, LLC, willful and
substantial failure of such Trustee-Manager to perform his duties (other than as
a result of total or partial incapacity due to physical or mental illness or
injury) under, or a willful and substantial breach by such Trustee-Manager of
his obligations under, the THCG, LLC Amended and Restated Limited Liability
Company Agreement dated as of July 16, 2001; provided, however, that a removal
pursuant to clause (iii) or clause (iv) shall not become effective unless the
Trustee fails to cure such failure to perform or breach within thirty (30) days
after written notice from the Special Committee, such notice to describe such
failure to perform or breach and identify what reasonable actions shall be
required to cure such failure to perform or breach. No act or failure to act on
the part of a Trustee shall be considered "willful" under this Section 10.2
unless it is done, or omitted to be done, by such Trustee in bad faith or
without reasonable belief that the Trustee's action or omission was in the best
interests of the Trust. Any act or failure to act that is based upon the
reasonable advice of counsel for the Trust shall be conclusively presumed to be
done, or omitted to be done, by a Trustee in good faith and in the best
interests of the Trust.
10.3. Appointment of Successor. Should at any time a Trustee resign or
be removed, die, become mentally incompetent or incapable of action or be
adjudged bankrupt or insolvent, a vacancy shall be deemed to exist and a
successor shall be appointed by the Special Committee. If and only if such a
vacancy is not filled by the Special Committee within 60 days, the Beneficiaries
may, pursuant to Article XII, call a meeting to appoint a successor Trustee by
Beneficiaries holding a majority of the Beneficial Interests represented at the
meeting.
10.4. Acceptance of Appointment by Successor Trustee.
(a) Any successor Trustee appointed hereunder shall execute an
instrument accepting such appointment hereunder and shall deliver one
counterpart thereof to the other Trustee (notice of any such appointment of a
successor trustee shall be provided to the Beneficiaries in the next report
delivered to the Beneficiaries pursuant to Section 5.6) and, in case of a
resignation, to the retiring Trustee. Thereupon such successor Trustee shall,
without any further act, become vested with all the estates, powers, rights,
properties, assets, trusts and duties of his 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 or by the
remaining Trustee, execute and deliver an instrument or instruments conveying
and transferring to such successor Trustee upon the trust herein expressed, all
the estates, rights, powers, obligations, duties, titles, discretions,
privileges, indemnities, immunities, properties, assets and trusts of such
retiring Trustee, and shall duly assign, transfer and deliver to such successor
Trustee all instruments and funds held by him hereunder.
(b) The retiring Trustee shall be entitled to reimbursement for
his reasonable expenses incurred in connection with the conclusion of his
Trusteeship upon such conveyance, transfer, assignment and delivery to a
co-Trustee or a successor Trustee
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10.5. Bonds. Unless required by the Board of Directors of the Company
prior to the Record Date, or unless a bond is required by law, no bond shall be
required of either original Trustee hereunder. Unless required by the Trustees
prior to a successor Trustee's acceptance of an appointment as such pursuant to
Section 10.4, or unless a bond is required by law and such requirement cannot be
waived by or with approval of the 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. If a
bond is required by the Board of Directors of the Company or by the Trustees,
the Board of Directors of the Company or the Trustees, as the case may be, shall
determine whether, and to what extent, a surety or security with respect to such
bond shall be required.
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 permitted hereunder), 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
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,
suit or proceeding at law or in equity against any person other than the
Trustees upon or under or with respect to the Trust Assets or the agreements
relating to or forming part of the Trust Assets, 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 Trustees may request any court to
require, and any court may in its discretion require, in any action, suit or
proceeding for the enforcement of any right or remedy under this Agreement, or
in any action, suit or other proceeding against the Trustees for any action
taken or omitted by them as Trustees, the filing by any party litigant in such
action, suit or other proceeding of an undertaking to pay the costs of such
action, suit, or other proceeding, and such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees, against any party
litigant in such action, suit or other proceeding, having due regard to the
merits and good faith of the claims or defenses made by such party litigant;
provided, however, that the provisions of this Section 11.3 shall not apply to
any action, suit or other proceeding by the Trustees; and provided, further,
that no provision of this Section 11.3 shall in any manner limit any Person's
right to indemnification under Section 7.6
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ARTICLE XII
MEETINGS 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 XII
for the purposes of taking any action which the terms of this Agreement permit
Beneficiaries having a specified aggregate Beneficial Interest to take either
acting alone or with the Trustees.
12.2. Meeting Called by Trustees. The Trustees may at any time call a
meeting of the Beneficiaries to be held at such time and at such place within or
without the State of New York as the Trustees shall determine. Written notice of
every meeting of the Beneficiaries shall be given by the Trustees (except as
provided in Section 12.3), which written notice will 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 as of a record date
determined by the Trustees in their sole discretion, which record date shall not
be not more than 90 days before the date of such meeting. The notice shall be
directed to the Beneficiaries at their respective addresses as of such record
date as they appear in the records of the Trustees.
12.3. Meeting Called on Request of Beneficiaries. Within 30 days after
written request to the Trustees by Beneficiaries having aggregate Beneficial
Interests of at least 25% of the aggregate Beneficial Interests of all
Beneficiaries, which written request shall specify in reasonable detail the
action proposed to be taken, the Trustees shall proceed under the provisions of
Section 12.2 to call a meeting of the Beneficiaries, and if the Trustees fail to
call such meeting within such 30- day period, then such meeting may be called
under the provisions of Section 12.2 by Beneficiaries having aggregate
Beneficial Interests of at least 15% of the aggregate Beneficial Interests of
all Beneficiaries or by their designated representative.
12.4. Persons Entitled to Vote at Meetings of Beneficiaries. Each
Beneficiary holding Units as of the record date for such meeting shall be
entitled to vote at the meeting of the Beneficiaries either in person or by his
proxy duly authorized in writing. Each Beneficiary shall be entitled to a number
of votes equal to the number of Units held by each Beneficiary as of such record
date. The signature of the Beneficiary on such written authorization need not be
witnessed or notarized.
12.5. Quorum and Vote Required. At any meeting of Beneficiaries, the
presence of Beneficiaries having aggregate Beneficial Interests sufficient to
take action on any matter for the transaction of which such meeting was called
shall be necessary to constitute a quorum; but if less than a quorum be present,
Beneficiaries having aggregate Beneficial Interests of more than 50% of the
aggregate Beneficial Interests of all Beneficiaries present in person or
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, the approval of Beneficiaries having aggregate
Beneficial Interests of more than 50% of the aggregate Beneficial Interests of
all Beneficiaries shall be required for taking action on any matter voted on by
the Beneficiaries.
24
12.6. Waiver of Notice. Whenever notice is required to be given under
this Article XII, a written waiver thereof, signed by the Beneficiary entitled
to notice, whether before or after the time stated in this Article XII for such
notice, shall be deemed equivalent to notice. Attendance of a Beneficiary at a
meeting, either in person or by his proxy duly authorized in writing, shall
constitute a waiver of notice of such meeting. Neither the business to be
transacted at, nor the purpose of, any meeting of Beneficiaries need be
specified in any written waiver of notice.
12.7. Adjournment of Meetings. 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.
12.8. Conduct of Meetings. The Trustees shall appoint the Chairman and
the Secretary of the meeting unless the meeting was called by Beneficiaries
pursuant to Section 12.3, in which event Beneficiaries having aggregate
Beneficial Interests of more than 50% of the aggregate Beneficial Interests of
all Beneficiaries present in person or represented at the meeting 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 its verified written report.
12.9. Record of Meetings. 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 Trustees to be preserved by them. Any record so signed and
verified shall be conclusive evidence of all the matters therein stated.
12.10. Action without a Meeting. Any action may be taken by the
Beneficiaries without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by
Beneficiaries having aggregate Beneficial Interests not less than the percentage
that would be necessary to authorize or take such action at a meeting. The
Trustees shall give reasonably prompt notice of the action so taken to all
Beneficiaries that did not sign such consent.
ARTICLE XIII
AMENDMENTS
13.1. Consent of Trustees and Beneficiaries. At the direction or with
the consent of both the Trustees and Beneficiaries having aggregate Beneficial
Interests of at least 50% of the aggregate Beneficial Interests of all
Beneficiaries, or such greater 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 Trustees shall promptly make and execute a
declaration amending this Agreement for the purpose of adding any provision to
or changing in any manner or eliminating any of the provisions of this Agreement
or amendments thereto; provided, however, that no such amendment shall permit
the Trustees to engage in any activity prohibited by any provision of Section
5.2 or 6.1 or any other express provision of this Agreement or affect the
Beneficiaries' rights to receive their pro rata shares of the Trust Assets at
the time of distribution or otherwise adversely affect the rights of
Beneficiaries; and provided, further,
25
however, that any amendment to this Agreement that adds to, changes or in any
manner eliminates or amends Section 5.2 or that pertains to the duties and
obligations of the Trustees, or restrictions on the performance thereof, shall
also be consented to by Beneficiaries having an aggregate Beneficial Interest of
at least 50% of the total Beneficial Interests (other than Beneficial Interests
of the Trustees, members of their families and affiliates of any of the
foregoing). In addition to any amendments otherwise authorized herein, this
Agreement may be amended from time to time by the Trustees, without the consent
of any of the Beneficiaries, (i) to add to the duties or obligations of the
Trustees or surrender any right or power granted to the Trustees herein; and
(ii) to cure any ambiguity, to correct or supplement any provision herein which
may be inconsistent with any other provision herein, or to add any other
provision with respect to matters or questions arising under this Agreement
which will not be inconsistent with any provision of this Agreement; provided,
however, that no amendment shall be adopted pursuant to this sentence unless the
adoption thereof (1) is for the benefit of or not adverse to the interests of
the Beneficiaries; and (2) does not alter the interest of any Beneficiary in any
way without the consent of each Beneficiary adversely affected thereby.
13.2. Notice and Effect of Amendment. Promptly after the execution by
the Trustees of any such declaration of amendment, the Trustees shall give
notice of the substance of such amendment to the Beneficiaries or, in lieu
thereof, the Trustees may send a copy of the amendment to each Beneficiary. Upon
the execution of any such declaration of amendment by the Trustees, this
Agreement shall be deemed to be amended in accordance therewith and the
respective rights, powers, limitations of rights or powers, obligations, duties,
titles, discretions, privileges, indemnities and immunities of the Trustees and
the Beneficiaries under this Agreement shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such amendment, and all the
terms and conditions of any such amendment shall be thereby 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 Trustees may determine to be necessary or
desirable. A copy of this Agreement and all amendments thereof shall be
maintained in the office of each Trustee and shall be available at all times
during regular business hours for inspection by any Beneficiary or his duly
authorized representative. The Trustees shall file or record any amendment of
this Agreement in the same places where the original Agreement is filed or
recorded. The Trustees shall file or record any instrument which relates to any
change in the office of the Trustees in the same places where the original
Agreement is filed or recorded.
14.2. Intention of Parties to Establish Trust. This Agreement is
intended to create a liquidating trust for federal income tax purposes and, to
the extent provided by law, shall be governed and construed in all respects as
such a trust and any ambiguity herein shall be construed consistent therewith
and, if necessary, this Agreement may be amended to comply with such federal
income tax laws, which amendments may apply retroactively. This Agreement
26
is not intended to create and shall not be interpreted as creating a
corporation, association, partnership or joint venture of any kind for federal
income taxation or any other purpose.
14.3. Governing Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of New York, without regard to
principles of conflict of laws. The Trustees 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.
14.4. Interpretation. The table of contents and headings herein are for
convenience of reference only, do not constitute part of this Agreement and
shall not be deemed to limit or otherwise affect any provision hereof. Where a
reference in this Agreement is made to a Section or Article, such reference
shall be to a Section or Article of this Agreement unless otherwise indicated.
Where the reference "hereof," "hereby," "herein" or "hereunder" appears in this
Agreement, such reference shall be deemed to be a reference to this Agreement as
a whole. Whenever the words "include," "includes" or "including" are used in
this Agreement, they shall be deemed to be followed by the words "without
limitation." Words denoting the singular include the plural, and vice versa, and
references to it or its or words denoting any gender shall include all genders.
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 Trustees to any
Beneficiary shall be deemed to have been sufficiently given, for all purposes,
if deposited by regular mail, postage prepaid, in a post office or letter box
addressed to such Person at his address as shown in the records of the Trustees.
All notices and other communications hereunder shall be
in writing and shall be deemed to have been duly given if deposited by
regular mail, postage prepaid, in a post office or letter box, or delivered
personally or sent by telegram or telecopier, to the parties at the following
addresses or at such other addresses (or to such other person's attention or to
such other telecopier number) as shall be specified by the parties by like
notice, which information the Trustees shall maintain with the records of the
Trust:
27
(a) If to the Trustees:
Xxxxxx X. Xxxx and
Xxx Xxxxx, Trustees
THCG, LLC Liquidating Trust
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile: (212)
with a copy to:
Xxxxxx Xxxxx Xxxxxxxx & Xxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxxxx, Esq.
Facsimile: (000) 000-0000
(b) If to the Company:
THCG, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
Facsimile: (000) 000-0000
14.7. Counterparts. This Agreement may be executed in any number of
counterparts (by original or facsimile signature), each of which shall be an
original, but such counterparts shall together constitute one and the same
instrument.
14.8. Binding.
(a) The obligations of the Company hereunder are not personally
binding upon, nor shall resort be had to the private property of, any of the
stockholders, directors, officers, employees or agents of the Company, but only
the property of the Company shall be bound.
(b) The obligations of the Trust hereunder are not personally
binding upon, nor shall resort be had to the private property of, any of the
Trustees, any member of the Special Committee or any Beneficiaries, employees or
agents of the Trust, but only the Trust Assets shall be bound.
14.9. Access to Documents. The Trustees shall provide to the Company
such documents and information as the Company may reasonably request from time
to time in connection with its preparation of tax returns, reports to the SEC
and for other legitimate business purposes, and shall permit the Company to make
copies thereof. The Company shall provide to the Trustees, such documents and
information as the Trustees may reasonably request from time to time in
connection with the preparation of tax returns, reports to the SEC and for
28
other legitimate purposes, and shall permit the Trustees to make copies thereof.
Any such documents and information provided pursuant to this Section 14.9 shall
be held in confidence and shall be treated in the same manner as the receiving
Person treats its own confidential information.
[Remainder of page intentionally left blank.]
29
IN WITNESS WHEREOF, THCG, Inc. has caused this
Agreement to be executed by its duly authorized officer, and the initial
Trustees herein have executed this Agreement, as trustees and not as
individuals, this 16th day of July, 2001.
THCG, INC.
By:
------------------------------------
Name:
Title:
_______________________________________
Xxxxxx X. Xxxx
Trustee
----------------------------------
Xxx Xxxxx
Trustee
30
Table of Contents
Page
----
ARTICLE I NAME AND DEFINITIONS..............................................1
1.1. Name.......................................................1
1.2. Certain Terms Defined......................................1
ARTICLE II NATURE OF TRANSFER...............................................4
2.1. Purpose of Trust...........................................4
2.2. No Reversion to the Company................................4
2.3. Instruments of Further Assurance...........................5
2.4. Payment of Liabilities; Indemnification....................5
2.5. Assignment for Benefit of Beneficiaries....................6
2.6. Notice to Unlocated Beneficiaries..........................6
2.7. The Trust Subsidiaries.....................................6
ARTICLE III BENEFICIARIES...................................................7
3.1. Beneficial Interests.......................................7
3.2. Rights of Beneficiaries....................................7
3.3. No Transfer of Interests of Beneficiaries..................8
ARTICLE IV DURATION AND TERMINATION OF TRUST................................8
4.1. Duration...................................................8
4.2. Other Obligations of Trustees upon Termination.............9
ARTICLE V ADMINISTRATION OF TRUST ASSETS....................................9
5.1. Disposition of Trust Assets................................9
5.2. Transactions with Related Persons; Appointment and
Authority of Special Committee.............................9
5.3. Payment of Claims, Liabilities and Expenses................10
5.4. Interim Distributions......................................10
5.5. Final Distribution.........................................11
5.6. Reports to Beneficiaries and Others........................11
5.7. Federal Income Tax Information.............................11
5.8. Books and Records..........................................11
5.9. Employment of Agents, etc..................................12
ARTICLE VI POWERS OF AND LIMITATIONS ON THE TRUSTEES........................13
6.1. Limitations on Trustees....................................13
6.2. Specific Powers of Trustees................................14
ARTICLE VII CONCERNING THE TRUSTEES, BENEFICIARIES, EMPLOYEES AND AGENTS....17
7.1. Generally..................................................17
7.2. Reliance by Trustees.......................................17
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Table of Contents
(continued)
Page
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7.3. Safekeeping of Trust Assets................................18
7.4. Liability to Third Persons.................................18
7.5. Recitals...................................................18
7.6. Indemnification............................................19
7.7. Rights of Trustees, Employees, Independent Contractors
and Agents To Own Units or Other Property and To
Engage in Other Business...................................19
7.8. Powers of Trustees to Deal with Trust in
Non-Fiduciary Capacity.....................................
7.9. No Duty Not to Compete.....................................20
ARTICLE VIII PROTECTION OF PERSONS DEALING WITH THE TRUSTEES................20
8.1. Action by Trustees.........................................20
8.2. Delegation.................................................20
8.3. Reliance on Statement by Trustees..........................20
ARTICLE IX COMPENSATION OF TRUSTEES.........................................21
9.1. Amount of Compensation.....................................21
9.2. Expenses...................................................21
ARTICLE X TRUSTEES AND SUCCESSOR TRUSTEES...................................21
10.1. Number and Qualification of Trustees.......................21
10.2. Resignation and Removal....................................21
10.3. Appointment of Successor...................................22
10.4. Acceptance of Appointment by Successor Trustee.............22
10.5. Bonds......................................................23
ARTICLE XI CONCERNING THE BENEFICIARIES.....................................23
11.1. Evidence of Action by Beneficiaries........................23
11.2. Limitation on Suits by Beneficiaries.......................23
11.3. Requirement of Undertaking.................................23
ARTICLE XII MEETINGS OF BENEFICIARIES.......................................24
12.1. Purpose of Meetings........................................24
12.2. Meeting Called by Trustees.................................24
12.3. Meeting Called on Request of Beneficiaries.................24
12.4. Persons Entitled to Vote at Meetings of Beneficiaries......24
12.5. Quorum and Vote Required...................................24
12.6. Waiver of Notice...........................................25
12.7. Adjournment of Meetings....................................25
12.8. Conduct of Meetings........................................25
12.9. Record of Meetings.........................................25
12.10. Action without a Meeting...................................25
ARTICLE XIII AMENDMENTS.....................................................25
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Table of Contents
(continued)
Page
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13.1. Consent of Trustees and Beneficiaries......................25
13.2. Notice and Effect of Amendment.............................26
ARTICLE XIV MISCELLANEOUS PROVISIONS........................................26
14.1. Filing Documents...........................................26
14.2. Intention of Parties to Establish Trust....................26
14.3. Governing Law..............................................27
14.4. Interpretation.............................................27
14.5. Severability...............................................27
14.6. Notices....................................................27
14.7. Counterparts...............................................28
14.8. Binding....................................................28
14.9. Access to Documents........................................28
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