OPTICARE D&O TAIL POLICY TRUST
TRUST AGREEMENT
THIS TRUST AGREEMENT is made as of January 10, 2002 ("Trust Agreement")
by and between OptiCare Health Systems, Inc., a Delaware corporation (the
"Company" or " Settlor") and Xxxxxx X. Xxxxxxx, an individual residing at
Middlebury, Connecticut, not in his individual capacity but solely as trustee
(the "Trustee").
WITNESSETH:
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WHEREAS, the Company has agreed to set aside funds for the purchase of
a tail policy with respect to any termination of its present Directors, Officers
and Company Liability Policy (Policy No. NCA0158069) (together with any and all
endorsements, modifications, substitutions and renewals thereof, the "D&O
Policy") for the benefit of its directors and officers, provided by Twin City
Fire Insurance Company or by such other insurer as the Company shall determine
(the "Insurer"), such tail policy to extend the coverage of the D&O Policy for a
three year period from the termination of the D&O Policy (the "D&O Tail
Policy"); and
WHEREAS, to assure the Company's present and future directors and
officers of the Company's ability to pay the premium for the D&O Tail Policy,
the Company wishes to establish a trust in which funds may be maintained for the
payment of such premium;
NOW, THEREFORE, the Company and the Trustee agree as follows:
1. The trust created hereby shall be known as the OptiCare D&O Tail
Policy Trust ("Tail Policy Trust"), in which name the Trustee may conduct the
business of such trust.
2. The Company hereby transfers, conveys and sets over to the Trustee
of the Tail Policy Trust the sum of $225,000 (Two Hundred Twenty-five Thousand
Dollars) (the "Funds"). All interest, earnings and profits earned on or with
respect to the Funds shall be
1.
for the account of the Company, and shall be distributed to the Company by the
Trustee no less than quarterly.
3. The Funds shall be maintained in an account at American Savings Bank
in the name of the Trustee for the benefit of the present and future directors
and officers of the Company (collectively, the "Beneficiaries"). The Funds may
be held in the same account of Trustee in which are held the funds of the
Opticare Directors and Officers Trust in connection with the retention under the
D&O Policy (the "D&O Account") and may be commingled with the funds maintained
therein.
4. The Funds may be disbursed for the purpose of payment of the premium
required in connection with the purchase of the D&O Tail Policy, with the
protections and indemnities substantially similar to the D&O Policy, upon
receipt by the Trustee of a written statement from the Beneficiaries, or any of
them, at any time prior to December 31, 2004 that the D&O Policy is about to
lapse or terminate or has lapsed or been terminated and not replaced.
5. The Trustee is authorized and empowered to oversee the Funds
and the account in which they are held and to release the Funds in the
appropriate manner as provided in this Trust Agreement .
6. The Trustee shall serve without compensation, but shall be
reimbursed for all reasonable expenses incurred in connection with the operation
of the Tail Policy Trust, including without limitation out-of-pocket expenses
and necessary counsel fees.
7. If the Trustee at any time acting hereunder should cease to act
prior to the termination of the D&O Tail Policy, the Company shall appoint an
individual or corporation to act as successor Trustee. Each appointment of a
trustee in accordance herewith shall be by an acknowledged written instrument.
Any such designation may be withdrawn or altered by the Company at any time.
Except as otherwise specifically provided, the term "Trustee" as used in this
Trust Agreement is intended to include the trustee acting hereunder from time to
time. Any Trustee may resign at any time without the permission of any court or
person upon sixty (60) days' notice to the Company, in writing, signed and
acknowledged by such Trustee and filed with the trust records.
2.
8. This Tail Policy Trust shall terminate upon the earlier of: (i)
December 31, 2004; or (ii) upon the Company's delivery to the Trustee
certification that the net worth of the Company is no less than $30,000,000 as
determined by the Company's independent accountants. Upon termination of the
Tail Policy Trust, to the extent that any Funds remain undisbursed, the
remaining Funds shall be distributed back to the Company.
9. This Trust Agreement and the Tail Policy Trust hereby created are
irrevocable.
10. This Trust Agreement shall be construed and the trust hereby
created shall be governed by the internal laws of the State of Connecticut.
IN WITNESS WHEREOF, the Company and the Trustee have executed this
Trust Agreement as of the date first above written.
OPTICARE HEALTH SYSTEMS, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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XXXX X. XXXXXXXXX, M.D.
Its: President and CEO
/s/ Xxxxxx X. Xxxxxxx
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XXXXXX X. XXXXXXX, not in his
individual capacity, but solely as
Trustee of the OptiCare D&O Tail
Policy Trust
3.
STATE OF CONNECTICUT
ss: Waterbury January 10, 2002
COUNTY OF NEW HAVEN
Personally appeared XXXX X. XXXXXXXXX, M.D., signer and sealer of the
foregoing instrument, personally known to me (or satisfactorily proven) who
acknowledged that he, as President and CEO of OptiCare Health Systems, Inc., is
duly authorized to execute said instrument and further acknowledged the same to
be his free act and deed as President and CEO of OptiCare Health Systems, Inc.,
and the free act and deed of said corporation, before me, the undersigned
officer.
/s/ Xxxxxx Xxxxx
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Notary Public
My Commission Expires: 00-00-00
XXXXX XX XXXXXXXXXXX
ss: Waterbury January 10, 2002
COUNTY OF NEW HAVEN
Personally appeared XXXXXX X. XXXXXXX, Trustee, signer and sealer of
the foregoing instrument, and acknowledged the same to be his free act and deed,
before me.
/s/ Xxxxxx Xxxxx
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Notary Public
My Commission Expires: 11-30-04