IRREVOCABLE TRUST AGREEMENT
This Trust Agreement is made as of the 30th day of March, 2000, between
the stockholder of Integrated Communication Networks, Inc. ("ICNW") who has
executed a signature page hereto (the "Stockholder") and Xxxxx Xxxxxxxx,
hereinafter referred to as the "Trustee."
WITNESSETH:
WHEREAS, Stockholder is, as of the date hereof, the record and
beneficial owner of the number of shares of common stock (the "Common Stock") of
ICNW and the number of shares of Series A-1 preferred stock (the "Preferred
Stock") of ICNW set forth next to such Stockholder's name on Exhibit A attached
hereto; and
WHEREAS, the Stockholder desires to establish an irrevocable trust
relating to such Common Stock and Preferred Stock (the "Trust Shares") on the
terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the promises and the covenants
herein contained, the Stockholder has transferred and delivered to the Trustee
the Trust Shares and the Trustee hereby acknowledges receipt of such Trust
Shares for the purposes and on the conditions hereinafter set forth.
The Trust Shares shall be held and administered by the Trustee upon the
following terms:
ARTICLE 1. TRUSTEE'S POWERS
In addition to all other powers and discretions granted to or vested in
the Trustee and all limitations created by law or by this instrument, the
Trustee shall have the following powers and discretions and shall be subject to
the following limitations:
1.1 POWER TO VOTE SHARES.
(a) As used herein "Non-Trust Shares" shall mean all shares of
Common Stock and Preferred Stock other than the Trust Stock.
(b) At every meeting of the stockholders of ICNW of which the
Trustee, its nominee or agent has written notice, the Trustee shall cause the
Trust Shares:
(i) with respect to any election of directors, to be
voted in favor of any individuals in the same
proportion as all Non-Trust Shares are validly voted
in favor of such individual.
(ii) with respect to each other matter, to be voted
"for," "against" or to abstain from voting in the
same proportion as all Non-Trust shares are validly
voted "for," "against" or abstain from voting, as the
case may be, with respect to such matter.
The Trustee shall also cause to be present for purposes of determining the
presence of a quorum at such meeting Trust Shares in such number which is in
proportion to the number of Non-Trust Shares which are present at such meeting
in relation to the number of outstanding Non-Trust Shares. Whenever any consent
in writing of the stockholders of ICNW is sought with respect to any action, the
Trustee shall consent thereto with respect to the Trust Shares in such number
which is in proportion to the number of Non-Trust Shares with respect to which a
consent has been delivered in relation to the number of outstanding Non-Trust
Shares.
(c) ICNW agrees that it shall recognize any proxy or written
consent delivered by the Trustee pursuant to this Section 1.1 as effective in
the manner and to the extent provided in this Agreement.
(d) In causing the Trust Shares to be present at any
stockholder meeting for purposes of determining a quorum or to be voted on at
such a meeting or in consenting to the taking of any action, in each case
pursuant to this Section 1.1, the Trustee shall have no discretion and shall act
solely in accordance with this Agreement.
1.2 Limitation on Power of Trustee. Except as provided in Section 1.1,
the Trustee shall not possess or be entitled to exercise any right or power with
respect to the Trust Shares and shall act in accordance with written directions
provided by Stockholder from time to time with respect to the Trust Shares. In
illustration and not in limitation of the foregoing, Stockholder may from time
to time direct the Trustee to sell, assign or otherwise transfer Trust Shares,
as provided in Section 1.3 below; to tender Trust Shares in connection with any
tender, exchange or other offer and to distribute the consideration received for
such shares in any such tender, exchange or other offer directly to Stockholder
free of this Trust; to register a dissent from corporate action and take all
steps necessary or desirable to perfect any dissenters' rights with respect to
Trust Shares; and to exercise any other rights as a stockholder of ICNW (other
than voting rights to the extent limited by this Agreement).
1.3 Transfer of Trust Shares. The Trustee shall, promptly upon written
notice from Stockholder that Stockholder has sold, assigned or otherwise
transferred some or all of the Trust Shares, deliver to Stockholder or to
Stockholder's order a certificate or certificates for such shares (in no event
later than 5 business days after receipt of such notice), endorsed for transfer
in such manner as Stockholder shall direct; provided, however, that the Trustee
shall have no duty to so deliver any certificate unless, subject to the last
sentence of this Section 1.3, (i) such sale, assignment or other transfer by
Stockholder is a bona fide sale, assignment or other transfer to a third party
not controlled by the Stockholder or any affiliate of the Stockholder, (ii)
Stockholder is not in default of any of its obligations under this Agreement and
(iii) Stockholder shall deliver to the Trustee a certificate duly executed by
the Stockholder, in form and substance reasonably satisfactory to the Trustee,
certifying as to the preceding clauses (i) and (ii). Any consideration received
or to be received by Stockholder in connection with any such sale, assignment or
other transfer shall not be subject to this Agreement and if received by the
Trustee shall promptly be distributed to Stockholder in accordance with Section
1.4. In the event of any sale, assignment or other transfer by Stockholder of
any Trust Shares which satisfies the conditions set forth in this Section 1.3,
the shares of Trust Shares so sold, assigned or otherwise transferred shall
thereafter not be subject to this Agreement in any respect and shall cease to be
Trust Shares. Nothing in this Agreement shall prohibit the sale, assignment or
other transfer of any shares of Trust Shares to any person so long as such
person agrees that such shares will continue to be Trust Shares and remain
subject to this Agreement.
1.4 Trustee to Receive And Distribute Dividends. The Trustee shall
receive all dividends paid upon the Trust Shares in any manner (other than in
shares of Common Stock), including, without limitation, cash, and shall promptly
pay such dividends to the Stockholder. Any and all shares of Common Stock
received by the Trustee as a dividend or distribution on, or upon any split-up
or subdivision of, any of the Trust Shares, shall be held by the Trustee as
Trust Shares.
ARTICLE 2. THE TRUSTEE
2.1 Appointment of Trustee. Xxxxx Xxxxxxxx, President of ICNW, and any
individual who shall hereafter succeed to the office of President of ICNW is
hereby appointed as Trustee for the purposes and with the powers set forth
herein, and Xxxxx Xxxxxxxx hereby accepts such appointment and agrees to act as
Trustee hereunder in accordance with the terms hereof.
2.2 Trust Certificates Not to Be Issued. The Trustee shall not issue
any trust certificates in connection with this Trust.
2.3 Duties and Responsibilities.
(a) The Trustee owes no fiduciary duties to any person by
reason of this Agreement. The Trustee undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this Agreement against the Trustee.
(b) In the absence of bad faith or gross negligence on its
part, as determined by a court of competent jurisdiction, the Trustee shall not
be liable for any action taken, suffered, or omitted or for any error of
judgment made by it in the performance of its duties under this Agreement. The
Trustee shall not be liable for any error of judgment made in good faith unless
the Trustee shall have been grossly negligent in ascertaining the pertinent
facts. In no event shall the Trustee be liable for special, indirect or
consequential damages or loss of any kind whatsoever (including but not limited
to lost profits) even if the Trustee has been advised of the likelihood of such
loss or damage and regardless of the form of action.
(c) The Trustee may rely and shall be protected in acting or
refraining from acting upon any communication authorized hereby and upon any
written instruction, notice, request, direction, consent, report, certificate,
form of bond certificate or other instrument, paper or document in good faith
believed by it to be genuine. The Trustee shall not be liable for acting upon
any telephone communication authorized hereby which the Trustee believes in good
faith to have been given by the proper party or parties.
(d) The Trustee may consult with counsel of its choice and the
advice of such counsel shall be full and complete authorization and protection
in respect of any action taken, suffered or omitted by it hereunder in good
faith and in reliance thereon.
(e) The Trustee shall not be required to advance, expend or
risk its own funds or otherwise incur or become exposed to financial liability
in the performance of its duties hereunder.
(f) The Trustee may perform its duties and exercise its rights
hereunder either directly or by or through agents or attorneys and shall not be
responsible for any misconduct or negligence on the part of any agent or
attorney appointed by it with due care hereunder.
(g) The Trustee makes no representation as to the validity or
adequacy of this Agreement or the Trust Shares.
2.4 Costs and Expenses. The Trustee shall be entitled to incur such
reasonable costs, expenses and other charges, including, but not limited to,
reasonable attorneys' fees and expenses, of every kind and nature whatsoever as
it may deem necessary or appropriate in connection with this Agreement,
including, without limitation, costs, expenses and other charges incurred in
connection with administering the voting trust created hereby and in enforcing
or defending the validity of this Agreement or any part hereof. All of such
costs, expenses and other charges shall be borne and paid by Stockholder.
2.5 Indemnification. Stockholder shall indemnify the Trustee against
any cost or expense (including counsel fees and disbursements), reasonably
incurred by it in connection herewith and any claim, demand, action, loss or
liability (collectively, "Liability") that the Trustee may suffer or incur in
connection with this Agreement or any action taken or omitted by the Trustee
hereunder, except to the extent such Liability results from the gross negligence
or willful misconduct of the Trustee, as determined by a court of competent
jurisdiction.
2.6 Successor Trustee. The Trustee may resign at any time by giving
notice thereof to ICNW and Stockholder; provided, that no such resignation shall
be effective until a successor trustee shall have been appointed and agreed to
act as Trustee. Upon any such resignation, ICNW shall have the right to appoint
its President as successor Trustee, subject to the approval of Stockholder,
which shall not be unreasonably withheld. If no successor Trustee shall have
been so appointed by ICNW and approved by Stockholder, and shall have accepted
such appointment, within 30 days after the retiring Trustee's giving of notice
of resignation, then the retiring Trustee may appoint a successor, also subject
to the reasonable approval of Stockholder, and/or petition a court of competent
jurisdiction for the appointment of a successor.
2.7 Compensation of the Trustee. Stockholder will pay or reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any of the provisions of this
Agreement (including the reasonable compensation, expenses and disbursements of
its counsel and all persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its gross negligence or
intentional misconduct.
ARTICLE 3. TERMINATION OF THE TRUST
3.1 Termination and Irrevocability of Trust. This Agreement and the
voting trust hereby created shall terminate on December 31, 2005, and shall be,
and are hereby expressly declared to be irrevocable, except that this Agreement
and the voting trust hereby created may be terminated at any time by
Stockholder, by written notice to the Trustee and ICNW in the event the voting
power represented by the Trust Shares is less than Five Percent (5%) of the
total voting power of all shares of Common Stock and Preferred Stock then
outstanding, and the Trustee shall be entitled to rely on a certificate
certifying as to the existence of such condition.
3.2 Effect of Termination. Upon the termination of this Agreement and
the voting trust created hereby, in any manner provided for herein, the Trustee
shall deliver the Trust Shares to Stockholder, duly endorsed for transfer to
Stockholder or to Stockholder's order. When the Trustee shall have so
distributed all the Trust Shares and paid or distributed to all persons entitled
thereto any money or other property then held by the Trustee in its capacity as
Trustee hereunder, whether or not a part of the trust, the Trustee shall be
discharged of all further obligations hereunder.
ARTICLE 4. MISCELLANEOUS
4.1 Amendment of Agreement. This Agreement may be amended at any time
by the Stockholders for one or more of the following purposes:
(a) to evidence the succession of another person to
Stockholder, or successive successions, or the assignment of this Agreement by
Stockholder, in whole or in part, and the assumption by the successor or the
assignee of the covenants, agreements and obligations of Stockholder pursuant to
this Agreement;
(b) to add to the covenants of Stockholder such further
covenants, restrictions, conditions or provisions as Stockholder may desire;
(c) to cure any ambiguity or to correct or supplement any
provision contained herein which may be defective or inconsistent with any other
provision contained herein or to make such other provisions in regard to matters
or questions arising under this Agreement; and
(d) to evidence the appointment and acceptance of appointment
of a successor trustee and to add to or change any of the provisions of this
Agreement as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one trustee;
provided that no such amendment shall be inconsistent with the purpose of this
Agreement. In executing or accepting any amendments hereto, the Trustee shall be
entitled to receive and shall be fully protected in relying upon an opinion of
counsel and a certificate stating that the execution of such amendment is
authorized or permitted by this Agreement.
4.2 Effect of Partial Invalidity. If any one or more provisions of this
Agreement should be or become contrary to law, then such provisions only shall
be null and void and shall be deemed separable from the remaining provisions
hereof, and its or their invalidity shall not in any way affect the validity of
this Agreement as a whole or of any other provision or portion thereof;
provided, however, that this Agreement as thereby modified continues to be
consistent with the original purpose hereof. In the event this Agreement as so
modified is not consistent with such purpose, this Agreement shall be deemed
rescinded or terminated at such time and in such manner or upon such grounds as
a court of competent jurisdiction may deem equitable.
4.3 Agreement May Be Executed in Counterparts. This Agreement may be
signed in any number of counterparts with the same force and effect as though
all of the parties hereto had signed but one instrument.
4.4 Persons Bound. This Agreement shall inure to the benefit of and
bind, as the case may require, the parties hereto and their respective heirs,
executors, administrators, successors and assigns.
4.5 Entire Agreement. This Agreement, in conjunction with those
additional references made herein, is intended to embody the entire agreement
and understanding between the parties hereto with respect to the subject matter
hereof and supersedes any and all negotiations, prior discussions, or prior
agreements and understandings.
4.6 Paragraph Headings. The headings of the several paragraphs of this
Agreement are inserted solely for convenience of reference and are not a part of
and are not intended to govern or aid in the construction of any of the terms or
provisions thereof.
4.7 Governing Law. This Agreement is to be governed by and construed in
accordance with the laws of the State of California.
IN WITNESS WHEREOF, each of the undersigned has executed this Agreement
or caused this Agreement to be executed on its behalf as of the date first
written above.
XXXXX XXXXXXXX, TRUSTEE
/s/ Xxxxx Xxxxxxxx, Trustee
---------------------------------------
CORPORATE FINANCIAL ENTERPRISES, INC.
/s/ Xxxxx Xxxxxxx
---------------------------------------
By: Xxxxx Xxxxxxx
Its: President
EXHIBIT A
Stockholder Common Stock Preferred Stock
----------- ------------ ---------------
Corporate Financial Enterprises, Inc. 1,000,000 1,370,590
AMENDMENT NO. 1 TO IRREVOCABLE TRUST AGREEMENT
This Amendment No. 1 to Irrevocable Trust Agreement (this "Amendment"),
dated as of April 5, 2000, between Integrated Communication Networks, Inc.
("ICNW"), the stockholder of ICNW set forth on the signature page hereto (the
"Stockholder") and Xxxxx Xxxxxxxx, as trustee, hereinafter referred to as the
"Trustee."
WITNESSETH
----------
WHEREAS, the Trustee and the Stockholder are party to a certain
Irrevocable Trust Agreement dated as of March 30, 2000 (the "Trust Agreement").
Capitalized terms used herein without definition shall have the respective
meanings set forth in the Trust Agreement; and
WHEREAS, the Trustee and the Stockholder wish to clarify and amend
certain provisions of the Trust Agreement and add ICNW as a party thereto.
NOW, THEREFORE, in consideration of the promises and the covenants
herein contained, the parties agree as follows:
1. The Trust Shares shall include all shares of Common Stock, Preferred
Stock or other shares of capital stock of ICNW (or its successor in any merger,
consolidation, recapitalization or similar transaction) now or hereafter created
which are "beneficially owned" by Stockholder which have or may have voting
power to elect directors or take any other shareholder action, including shares
issuable upon exercise of the warrants set forth next to such Stockholder's name
on Exhibit A hereto, shares issuable on conversion of the Preferred Stock and
shares hereinafter acquired by Stockholder by any other means, such as but not
limited to open market transactions.
2. As used herein and in the Trust Agreement, the term "beneficially
owned" by any Stockholder shall have the meaning set forth in Rule 13d-3
promulgated under the Securities Exchange Act of 1934, as amended, it being
understood that such term is intended to also extend in its broadest terms to
include any shares over which Stockholder, its Affiliates and each member of
Stockholder's Group has the power to vote or direct the vote of such security,
whether by contract, arrangement, understanding, relationship or otherwise. For
purposes hereof, the term "Affiliate" of Stockholder shall mean any individual,
partnership, corporation, group or trust that directly or indirectly controls,
is controlled by or is under common control with Stockholder and the term
"Group" shall mean the following:
(i) in the case of any Stockholder who is an individual, (A)
such Stockholder, (B) the parent, stepparent, spouse and
lineal descendants of such Stockholder, (C) a trust for the
benefit of any of the foregoing and (D) any other entity all
of the partners, members or interest holders of which are
comprised of some or all the persons described in (A), (B) or
(C) above;
(ii) in the case of any Stockholder which is a corporation,
(A) such corporation, (B) any corporation or other entity to
which such corporation shall sell or transfer all or a
substantial portion of its assets or with which it shall be
merged or consolidated and (C) any Affiliate of such
corporation, including if such Affiliate is an individual, any
member of such individual's Group.
3. For purposes of Section 1.3(i) of the Trust Agreement, a "third
party not controlled by the Stockholder or any affiliate of the Stockholder"
shall in no event include any Affiliate or member of the Stockholder's Group, as
such terms are defined herein.
4. Stockholder agrees that Stockholder, its Affiliates and members of
the Groups in which Stockholder is a member shall not, during the term of the
Trust Agreement, without the prior written consent of the Board of Directors of
ICNW (and will not assist, provide or arrange financing to or for others or
encourage others to), directly or indirectly, acting alone or as part of a
group, acquire or agree, offer, seek or propose to acquire ownership of all or a
substantial portion of the assets or business of ICNW or any securities issued
by ICNW (except pursuant to rights in effect on the date hereof), or any rights
or options to acquire such ownership (including from a third party) or otherwise
seek or propose to influence or control (including by proxy solicitation or
otherwise) the management or policies of ICNW, make any public announcement with
respect to any of the foregoing, request permission (without ICNW's consent) to
do any of the foregoing or enter into any discussions, negotiation, arrangement
or understanding with any third party with respect to the foregoing. Any and all
agreements between Stockholder, its Affiliates and Group members and ICNW, other
than the agreements governing securities listed on Exhibit A to the Trust
Agreement or this Amendment are hereby terminated and are null and void. The
parties agree for clarification purposes that the Stock Purchase Agreement,
dated February 23, 1999, by and among ICNW and the buyers named therein, shall
remain in full force and effect, as well as all presently outstanding warrants
and warrant agreements issued in the name of Stockholder. For further
clarification purposes, in the event of the sale of any of the Trust Shares, the
Trustee shall promptly pay the proceeds received by it from such sale to the
Stockholder.
5. For purposes of Section 3.1 of the Trust Agreement, the five percent
(5%) interest referred to therein shall include any shares beneficially owned by
the Stockholder, any of its Affiliates and any member of the Stockholder's
Group. In addition, in the event that the Trust Agreement would otherwise
terminate pursuant to its terms, as amended hereby, and the Board of Directors
of ICNW determines in good faith that such termination would lead to a
substantial risk that the continued listing of any shares of capital stock of
ICNW then listed on a national, foreign or regional stock exchange or Nasdaq
could be jeopardized, the Trust Agreement and the voting trust created thereby
shall not terminate and shall continue in effect until the Board of Directors
determines that such condition no longer exists. In no event, however, shall the
voting trust extend beyond December 31, 2009.
6. Section 2.6 of the Trust Agreement is hereby amended to provide that
the President of ICNW, or any other executive officer selected by the Board of
Directors, shall act as successor Trustee and Stockholder hereby consents to and
approves any such successor so appointed during the term of the Trust Agreement,
as amended hereby.
7. ICNW is added as a party to and beneficiary of the agreements and
representations and warranties of Stockholder in the Trust Agreement, as amended
hereby.
8. Stockholder agrees that the certificates for all securities of ICNW
held at any time by Stockholder, its Affiliates and Group members shall be
promptly surrendered and shall bear the following legend:
"The securities evidenced hereby are subject to certain
restrictions contained in that certain Trust Agreement dated
as of March 30, 2000, as amended from time to time. A copy of
such agreement will be provided to the holder of such
securities upon written request to Integrated Communication
Networks, Inc."
9. This Amendment may be signed in any number of counterparts with the
same force and effect as though all of the parties hereto had signed but one
instrument.
IN WITNESS WHEREOF, each of the undersigned has executed this Amendment
or caused this Amendment to be executed on his behalf as of the date first
written above.
XXXXX XXXXXXXX, TRUSTEE
/s/ Xxxxx Xxxxxxxx, as Trustee
-------------------------------------
INTEGRATED COMMUNICATION NETWORKS, INC.
/s/ Xxxx X. Xxxxxxxx
-------------------------------------
By: Xxxx X. Xxxxxxxx
Its: Chief Financial Officer
CORPORATE FINANCIAL ENTERPRISES, INC.
/s/ Xxxxx Xxxxxxx
-------------------------------------
By: Xxxxx Xxxxxxx
Its: President
EXHIBIT A
Stockholder Warrants
----------- --------
Corporate Financial Enterprises, Inc. 2,828,633
