Exhibit 10.11
LIQUIDATING TRUST AGREEMENT
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This Liquidating Trust Agreement (the "Trust Agreement"), dated as of
____________ ___, 2003 by and among the debtors listed on Exhibit A
(collectively, the "Debtors") and the individuals listed on Exhibit B (each
individually a "Trustee", and collectively the "Liquidating Trustee"), executed
in connection with the Debtors' Joint Plan of Reorganization Under Chapter 11 of
the Bankruptcy Code dated October 28, 2002, (as amended, modified and
supplemented from time to time, the "Plan"). Capitalized terms used in this
Trust Agreement and not otherwise defined herein shall have the meanings
ascribed to them in the Plan.
W I T N E S S E T H
WHEREAS, Global Crossing Ltd., a Bermuda corporation ("GCL"), and 79
of its direct and indirect subsidiaries (the "US Debtors") commenced
reorganization cases by filing petitions for relief under Chapter 11 of title 11
of the United States Code, 11 U.S.C. Section 101-1330 (as amended, the
"Bankruptcy Code") in the United States Bankruptcy Court for the Southern
District of New York (the "Bankruptcy Court") (collectively, the "Reorganization
Cases");
WHEREAS, GCL and 15 of its direct and indirect subsidiaries (the
"Bermuda Debtors") commenced restructuring proceedings before the Supreme Court
of Bermuda (the "Bermuda Court") (collectively, the "Bermuda Proceedings");
WHEREAS, on October 28, 2002, the US Debtors filed their Joint Plan of
Reorganization under Chapter 11 of the Bankruptcy Code (as amended, modified and
supplemented from time to time, the "Plan");
WHEREAS, on _________, 2002, the Bermuda Debtors each filed a Scheme
of Arrangement with the Bermuda Court (the "Schemes of Arrangement");
WHEREAS, their terms in the Schemes of Arrangement (the "Schemes")
provide for the treatment of claims against the Bermuda Debtors and all
distributions to creditors of the Bermuda Debtors to be made in accordance with
the terms of the Plan;
WHEREAS, on _________ __, 2002, the Bankruptcy Court entered an order
confirming the Plan (the "Confirmation Order");
WHEREAS, on _________ __, 2002, the Bermuda Court entered a sanction
order with respect to the Schemes (the "Sanction Order");
WHEREAS, the Plan provides for the sale of substantially all of the
Debtors' assets, other than, among other things, the Liquidating Trust Assets,
and the transfer of the Reorganized Subsidiary Debtors to the Investors pursuant
to the terms of the Purchase Agreement;
WHEREAS, the Liquidating Trust is created pursuant to, and to
effectuate certain provisions of, the Plan and the Schemes and to hold the
Liquidating Trust Assets;
WHEREAS, the Liquidating Trust is intended to qualify as a liquidating
trust within the meaning of Treasury Regulations Section 301.7701-4(d); and
WHEREAS, the Liquidating Trust is established for the sole purpose of
liquidating its assets for the benefit of the holders of the Allowed Claims in
Classes C, D, E, and F (whether Allowed on or after the Effective Date)
(collectively, the "Beneficiaries"), in accordance with Treasury Regulations
Section 301.7701-4(d), with no objective or authority to continue or engage in
the conduct of a trade or business except to the extent reasonably necessary to,
and consistent with, the liquidating purpose of this Liquidation Trust and the
Plan and Schemes;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and in the Plan and the Schemes, the
Debtors, the Liquidating Trustee and the Estate Representative agree as follows:
ARTICLE 1
ESTABLISHMENT OF THE LIQUIDATING TRUST
1.1 Establishment of Liquidated Trust. Pursuant to the Plan and the
Schemes, the Debtors and the Liquidating Trustee hereby establish the
Liquidating Trust on behalf of the Beneficiaries. The Liquidating Trustee agrees
to accept and hold the Liquidating Trust Assets in trust for the Beneficiaries
subject to the terms of this Trust Agreement.
1.2 Purpose of the Liquidating Trust. The Liquidating Trust shall be
established for the sole purpose of liquidating the Liquidating Trust Assets
and, if required, fund the winding down of the Reorganization Cases, in
accordance with Treasury Regulations Section 301.7701-4(d), with no objective to
continue or engage in the conduct of a trade or business. Accordingly, the
Liquidating Trustee shall, in an expeditious but orderly manner, liquidate and
convert to Cash the Liquidating Trust Assets, make distributions, and not unduly
prolong the duration of the Liquidating Trust. The liquidation of the
Liquidating Trust Assets may be accomplished either through the sale of
Liquidating Trust Assets (in whole or in combination), including, without
limitation, the sale of any Estate Representative Claims or through the
prosecution or settlement of any Estate Representative Claims, or otherwise.
1.3 Transfer of Assets and Rights to the Liquidating Trustee. (a) As of
the Effective Date, the Debtors hereby transfer, assign, and deliver to the
Liquidating Trustee, (i) all of their right, title, and interest in the
Liquidating Trust Assets free and clear of any lien or Claim in such property of
any other Person or entity except as otherwise provided in the Plan or the
Schemes, (ii) all of their rights with respect to the Liquidating Trust Assets
including attorney-client privilege and work product and hereby waive their
right and the right of any legal, financial or other advisors to assert such
rights as a defense or otherwise, and the Liquidating Trustee on behalf of the
Liquidating Trust hereby assumes and agrees that all such Liquidating Trust
Assets will be transferred to the Liquidating Trust free and clear of any and
all liabilities except to the extent otherwise provided in the Plan or the
Schemes. (b) On or prior to the Effective Date, the Debtors shall deliver or
cause to be delivered to the Liquidating Trustee any and all documents required
in connection with the Estate Representative Claims (including those maintained
in electronic format and original documents) whether held by the Debtors, their
agents, advisors, attorneys, accountants or any other professional hired by the
Debtors and provide access to such employees of the Debtors, their agents,
advisors, attorneys, accountants or any other professional hired by the Debtors
with knowledge of matters relevant to the Estate Representative Claims. (c) At
any time and from time
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to time on and after the Effective Date, the Debtors (including the Reorganized
Subsidiary Debtors) agree (i) at the reasonable request of the Liquidating
Trustee to execute and deliver any instruments, documents, books, and records
(including those maintained in electronic format and original documents as may
be needed), and (ii) take, or cause to be taken, all such further action as the
Liquidating Trustee may reasonably request in order to evidence or effectuate
the transfer of the Liquidating Trust Assets to the Liquidating Trust and
consummation of the transactions contemplated hereby and by the Plan and the
Schemes and to otherwise carry out the intent of the parties hereunder and under
the Plan and the Schemes.
1.4 Bermuda Contingency Fund. When the Estate Representative transfers
the Bermuda Contingency Fund (including any monies tendered in reimbursement for
funds expended from the Bermuda Contingency Fund) to the Liquidating Trust such
funds will be Liquidating Trust Assets and be held by the Liquidating Trustee
for the benefit of the Beneficiaries.
1.5 Title to Liquidating Trust Assets.
(a) The transfer of the Liquidating Trust Assets to the Liquidating
Trust shall be made by the Debtors for the benefit and on behalf of the
Beneficiaries. In this regard, the Liquidating Trust Assets will be treated for
tax purposes as being transferred by the Debtors to Beneficiaries, and then by
such holders to the Liquidating Trust in exchange for interests in the
Liquidating Trust (the "Liquidating Trust Interests") for the benefit of such
Beneficiaries in accordance with the Plan. Upon the transfer of the Liquidating
Trust Assets, the Liquidating Trustee shall succeed to all of the Debtors'
right, title and interest in the Liquidating Trust Assets and the Debtors will
have no further interest in or with respect to the Liquidating Trust Assets or
this Liquidating Trust.
(b) For all federal income tax purposes, all parties (including,
without limitation, the Debtors, the Liquidating Trustee, and the Beneficiaries
shall treat the transfer of Liquidating Trust Assets to the Liquidating Trust,
as set forth in this Section 1.5 and in accordance with the Plan and the
Schemes, as a transfer to the Beneficiaries (and, as provided in the Plan, in
respect of any Disputed Claims, to the Liquidating Trustee to be held in the
Liquidating Trust Disputed Claims Reserve), followed by a transfer by such
Beneficiaries to the Liquidating Trust, and the Beneficiaries of this
Liquidating Trust shall be treated as the grantors and owners hereof.
1.6 Reliance. The Liquidating Trustee may rely upon the Debtors' filed
schedules and statements of financial affairs [similar documents filed in
Bermuda] and all other information provided by the Debtors or their
representatives to the Liquidating Trustee concerning Claims filed against the
Debtors, and their reconciliation and documents supporting such reconciliation.
1.7 Valuation of Liquidating Trust Assets. As soon as possible after the
Effective Date, but in no event later than March 31, 2004, (i) the Liquidating
Trustee shall make a good faith valuation (as of the Effective Date) of the
Liquidating Trust Assets, and (ii) the Liquidating Trustee shall apprise the
Beneficiaries, in writing of such valuation (and indicate in such writing, such
Beneficiaries' respective percentage ownership interests in the Liquidating
Trust based on such holders' relative beneficial interests in the Liquidating
Trust as of the Effective Date). The valuation shall be used consistently by all
parties (including, without limitation, the Debtors, the
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Liquidating Trustee, and the Beneficiaries) for all purposes, including, without
limitation, federal income tax purposes.
1.8 Governance of the Liquidating Trust. The Liquidating Trust shall be
governed by the Liquidating Trustee. The Liquidating Trustee's powers are
exercisable solely in a fiduciary capacity consistent with, and in furtherance
of, the purposes of this Liquidating Trust and not otherwise, except that the
Liquidating Trustee may deal with the Liquidating Trust Assets for its own
account as provided herein. The Trustees shall act as co-trustees of the
Liquidating Trust under this Trust Agreement. Except for the following, approval
of at least three (3) Trustees shall constitute the act of the Liquidating
Trustee: as set forth in Section 5.8(j)(i)(y) of the Plan, all decisions
(including and without limitation, as applicable, decisions related to the
selection of counsel to be retained, compensation for such counsel, the manner
of prosecution of claims and counterclaims, the settlement of claims and
counterclaims) with respect to Estate Representative Claims that are in a facial
amount of less than $1,000,000 and which claims are against a holder of a
Disputed Claims shall be made exclusively by the three Trustees that constitute
the Claims Subcommittee. For these purposes, approval of a majority of the
Trustees comprising the Claims Subcommittee shall constitute the act of the
Claims Subcommittee. Subject to the terms and conditions of this Trust
Agreement, the Liquidating Trustee may delegate responsibility for discrete
issues or decisions to one or more Trustees or third parties subject to
continued oversight by the Liquidating Trustee.
1.9 Appointment of the Liquidating Trustee. As of the date hereof the
Liquidating Trustee shall be comprised of the five Trustees listed on Exhibit B
attached hereto.
1.10 Funding of the Liquidating Trust. The Liquidating Trustee may from
time to time make withdrawals from the Liquidating Trust Assets in amounts and
at times that the Liquidating Trustee, in its sole discretion, deems necessary
or appropriate to fund any and all costs and expenses that the Liquidating
Trustee and the Liquidating Trust incur subsequent to the Effective Date in
accordance with this Trust Agreement, the Plan and the Schemes.
ARTICLE 2
LIQUIDATING TRUST BENEFICIARIES
2.1 Identification of Beneficiaries of Liquidating Trust. The
Beneficiaries of the Liquidating Trust are the holders of the Liquidating Trust
Interests and shall be recorded and set forth in a register maintained by the
Liquidating Trustee expressly for such purpose. All references in this Trust
Agreement to the Beneficiaries or the holders of Liquidating Trust Interests
shall be read to mean holders of record as set forth in the official register
maintained by the Liquidating Trustee and shall not mean any beneficial owner
not recorded on such official registry. Unless expressly provided herein, the
Liquidating Trustee may establish a record date that it deems practicable for
determining the Beneficiaries for a particular purpose. The distribution of
Liquidating Trust Interests to the Beneficiaries shall be accomplished as set
forth in the Plan.
2.2 Allocation of Beneficial Interests. Each holder of an Allowed Class C
Claim is hereby allocated its proportional share in accordance with the terms of
the Credit Agreement of 50% of the beneficial interests in the Liquidating
Trust. Each holder of an Allowed GC Holdings Notes Claim
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is hereby allocated its Ratable Proportion of 37.95% of the beneficial interests
in the Liquidating Trust. Each holder of an Allowed GCNA Notes Claim is hereby
allocated its Ratable Proportion of 6.16% of the beneficial interests in the
Liquidating Trust. Each holder of an Allowed General Unsecured Claim is hereby
allocated its Ratable Proportion of 5.89% of the beneficial interests in the
Liquidating Trust.
2.3 Additional Beneficiaries. From and after the Effective Date, any
holder of a Disputed Claim in Class F whose Claim becomes an Allowed General
Unsecured Claim as a result of settlement or resolution of such Disputed Claim
will be admitted as a Beneficiary and will receive its Ratable Proportion of the
5.89% of beneficial interests allocated to Allowed Class F Claims.
2.4 Transferability of Liquidating Trust Interests. The Liquidating Trust
Interests shall not be transferable, provided that the Liquidating Trust
Interests shall be assignable or transferable by will, intestate succession, or
operation of law and that the executor or administrator of the estate of a
holder of a Liquidating Trust Interest may mortgage, pledge, grant a security
interest in, hypothecate or otherwise encumber, the Liquidating Trust Interests
held by the estate of such holder if necessary in order to borrow money to pay
estate, succession or inheritance taxes or the expenses of administering the
estate of the holder, upon written notice to, and written consent of, the
Liquidating Trustee, which consent may not be unreasonably withheld.
2.5 Annual Distribution; Withholding. In the discretion of the
Liquidating Trustee but not less frequently than annually, subject to the
withholding of property on account of Disputed Claims pursuant to the provisions
of Article 5 hereof, the Liquidating Trustee shall distribute from the
Liquidating Trust to each holder of a Liquidating Trust Interest Cash on hand
(including, without limitation, all net Cash income plus all net Cash proceeds
from the liquidation of Liquidating Trust Assets, including, without limitation,
as Cash for this purpose, all permissible investments described in Section 3.12
below) pro rata in proportion to such holders' respective Liquidating Trust
Interests; provided, however, that no annual distribution will be required
unless such aggregate distribution would be at least $500,000. Notwithstanding
anything to the contrary herein, prior to making any distribution to holders of
Liquidating Trust Interests, the Liquidating Trustee may retain such amounts (i)
as are reasonably necessary to meet contingent liabilities and to maintain the
value of the Liquidating Trust Assets during liquidation, (ii) to pay reasonable
estimated expenses (including, without limitation, any taxes imposed on the
Liquidating Trust or the Liquidating Trust Disputed Claims Reserve or in respect
of the Liquidating Trust Assets), and (iii) to satisfy other liabilities
incurred or assumed by the Liquidating Trust (or to which the Liquidating Trust
Assets are otherwise subject), all for the term of the Liquidating Trust and in
accordance with this Trust Agreement, the Plan or the Schemes. The Liquidating
Trustee may withhold from amounts distributable to any Person any and all
amounts, determined in the Liquidating Trustee's reasonable sole discretion,
required by any law, regulation, rule, ruling, directive or other governmental
requirement.
2.6 Manner of Payment or Distribution. All Distributions made by the
Liquidating Trustee to holders of Liquidating Trust Interests shall be payable
to the holders of Liquidating Trust Interests of record as of the 15th day prior
to the date scheduled for the distribution, unless such day is not a Business
Day, then such day shall be the following Business Day (the "Record Date"). If
the Distribution shall be in Cash, the Liquidating Trustee shall distribute such
Cash by wire, check, or such other method as the Liquidating Trustee deems
appropriate under the circumstances.
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ARTICLE 3
THE LIQUIDATING TRUSTEE
3.1 Role of the Liquidating Trustee. In furtherance of and consistent
with the purpose of the Liquidating Trust, this Plan, and the Schemes, the
Liquidating Trustee shall, for the benefit of the Beneficiaries, (i) have the
power and authority to hold, manage, and distribute the Liquidating Trust
Assets, and (ii) have the power and authority to hold, manage, and distribute
the Cash or non-Cash Liquidating Trust Assets obtained through the exercise of
its power and authority. In all circumstances, the Liquidating Trustee shall act
in the best interests of all Beneficiaries of the Liquidating Trust and in
furtherance of the purpose of the Liquidating Trust.
3.2 Authority of Liquidating Trustee. In connection with the
administration of the Liquidating Trust, except as set forth in this Trust
Agreement, the Liquidating Trustee is authorized to perform any and all acts
necessary or desirable to accomplish the purposes of the Liquidating Trust.
Without limiting, but subject to, the express purpose of the Liquidating Trustee
and to Section 3.3 hereof, the Liquidating Trustee shall be expressly
authorized, but shall not be required, to:
(a) hold legal title to any and all rights of the holders of the
Liquidating Trust Interests in or arising from the Liquidating Trust Assets,
including, without limitation, collecting, receiving any and all money and other
property belonging to the Liquidating Trust and the right to vote any claim or
interest in a case under the Bankruptcy Code and receive any distribution
therein;
(b) perform the duties, exercise the powers, and assert the rights of
a trustee under Sections 704 and 1106 of the Bankruptcy Code, including, without
limitation, commencing, prosecuting or settling causes of action, enforcing
contracts, and asserting claims, defenses, offsets and privileges;
(c) protect and enforce the rights to the Liquidating Trust Assets by
any method deemed appropriate including, without limitation, by judicial
proceedings or pursuant to any applicable bankruptcy, insolvency, moratorium or
similar law and general principles of equity;
(d) borrow funds, incur or assume liabilities, and pledge Liquidating
Trust Assets on behalf of the Liquidating Trust in furtherance of or in
connection with the Liquidating Trustee's or the Liquidating Trust's duties,
powers, authority, and obligations under this Trust Agreement, and determine and
satisfy any and all liabilities created, incurred or assumed by the Liquidating
Trust;
(e) file, if necessary, any and all tax and information returns with
respect to the Liquidating Trust and the Liquidating Trust Disputed Claims
Reserve and pay taxes, if any, properly payable by the Liquidating Trust or the
Liquidating Trust Disputed Claims Reserve;
(f) pay all expenses and make all other payments relating to the
Liquidating Trust Assets;
(g) obtain reasonable insurance coverage with respect to its
liabilities and obligations as Liquidating Trustee under this Trust Agreement
(in the form of an errors and omissions policy or otherwise);
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(h) obtain insurance coverage with respect to real and personal
property that may become Liquidating Trust Assets, if any;
(i) retain and pay such counsel and other professionals as the
Liquidating Trustee in its sole discretion may select to assist the Liquidating
Trustee in its duties, on such terms as the Liquidating Trustee deems
appropriate, without Bankruptcy Court approval. The Liquidating Trustee may
commit the Liquidating Trust to and shall pay such counsel and other
professionals reasonable compensation for services rendered and expenses
incurred. A law firm or professional shall not be disqualified from serving the
Liquidating Trustee solely because of its current or prior retention as counsel
or professional to the parties in interest in the Reorganization Cases or the
Bermuda Proceedings;
(j) retain and pay an independent public accounting firm to perform
such reviews and/or audits of the financial books and records of the Liquidating
Trust and the Liquidating Trust Disputed Claims Reserve as may be appropriate in
the Liquidating Trustee's sole discretion and to prepare and file any tax
returns or informational returns for the Liquidating Trust and the Liquidating
Trust Disputed Claims Reserve as may be required. The Liquidating Trustee may
commit the Liquidating Trust to and shall pay such independent public accounting
firm reasonable compensation for services rendered and expenses incurred;
(k) retain and pay such third parties as the Liquidating Trustee, in
its sole discretion, may deem necessary or appropriate to assist the Liquidating
Trustee in carrying out its powers and duties under this Trust Agreement. The
Liquidating Trustee may commit the Liquidating Trust to and shall pay all such
persons or entities reasonable compensation for services rendered and expenses
incurred, as well as commit the Liquidating Trust to indemnify any such parties
in connection with the performance of services;
(l) employ such employees as the Liquidating Trustee, in its sole
discretion and as consistent with the purposes of the Liquidating Trust, may
deem necessary or appropriate to assist the Liquidating Trustee in carrying out
its powers and duties under this Trust Agreement. The Liquidating Trustee may
commit the Liquidating Trust to and shall pay all such employees reasonable
salary in the amounts it shall determine to be appropriate and any employee
benefits it may establish pursuant to Section 3.2(m) below. If the Liquidating
Trustee employs employees pursuant to this Section 3.2(l), the Liquidating
Trustee shall establish payroll procedures and pay any and all federal, state or
local tax withholding required under applicable law with respect to any such
employees, and it will take all other actions it deems necessary to effectuate
the provisions of this Section 3.2(l);
(m) establish and adopt or cease to provide such employee benefits
for the benefit of any employees described in Section 3.2(l) above as the
Liquidating Trustee, in its sole discretion and as consistent with the purposes
of the Liquidating Trust, may deem necessary or appropriate, including, without
limitation, the adoption of any group health plan;
(n) assert or waive any privilege or defense on behalf of the
Liquidating Trust or, with respect to the Liquidating Trust Assets, the Debtors;
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(o) compromise, adjust, arbitrate, ▇▇▇ on or defend, pursue,
prosecute abandon, exercise rights, powers, and privileges with respect to, or
otherwise deal with and settle, in accordance with the terms set forth herein,
Estate Representative Claims and all causes of action in favor of or against the
Liquidating Trust as the Liquidating Trustee shall deem advisable;
(p) avoid and recover transfers of the Debtors' property as may be
permitted by the Bankruptcy Code or applicable state law;
(q) execute offsets and assert counterclaims against Claims as
provided for in the Plan;
(r) in its sole discretion (subject to Section 2.4 hereof and this
Section 3.2), take all appropriate action with respect to the Liquidating Trust
Assets consistent with the purpose of the Liquidating Trust, including without
limitation the avoidance of any transfer or obligation, and the filing,
prosecution, settlement or other resolution of claims and causes of action,
including without limitation those based upon Sections 510, 542-550, or 553(b)
of the Bankruptcy Code;
(s) invest any moneys held as part of the Liquidating Trust in
accordance with the terms of Section 3.12 hereof, limited, however, to such
investments that are consistent with the Liquidating Trust's status as a
liquidating trust within the meaning of Treasury Regulations Section
301.7701-4(d);
(t) request any appropriate tax determination with respect to the
Liquidating Trust or the Liquidating Trust Disputed Claims Reserve, including,
without limitation, a determination pursuant to Section 505 of the Bankruptcy
Code;
(u) establish and maintain a website for the purpose of providing
notice of Liquidating Trust activities in lieu of sending written notice to
holders of Liquidating Trust Interests, subject to providing notice of such
website to such holders;
(v) take or refrain from taking any and all actions the Liquidating
Trustee reasonably deems necessary or convenient for the continuation,
protection and maximization of the Liquidating Trust Assets or to carry out the
purposes hereof; and
(w) seek the examination of any entity, and subject to, the
provisions of Bankruptcy Rule 2004.
The Liquidity Trustee hereby delegates its powers in 3.2(n) through
(r) to the Estate Representative and the Claims Subcommittee, as applicable, and
may delegate such other powers as the Liquidating Trustee deems necessary for
the resolution and conversion to Cash of the Estate Representative Claims and
Disputed Claims. The Liquidation Trustee hereby acknowledges that the Estate
Representative and Claims Subcommittee shall have such other powers, duties and
authority as set forth in the Plan or Schemes with respect to Estate
Representative Claims and the resolution of Disputed Claims.
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3.3 Limitation of Liquidating Trustee's Authority.
(a) Notwithstanding anything herein to the contrary, the Liquidating
Trustee shall not be authorized to engage in any trade or business, and shall
not take such actions inconsistent with the orderly liquidation of the
Liquidating Trust Assets as are required or contemplated by applicable law, the
Plan, the Schemes and this Trust Agreement.
(b) The Liquidating Trust shall not hold 50% or more of the stock (in
either vote or value) of any entity that is treated as a corporation for federal
income tax purposes, nor be the sole member of a limited liability company, nor
have any interest in an entity that is treated as a partnership for federal
income tax purposes, unless such stock, membership interest, or partnership
interest was obtained involuntarily or as a matter of practical economic
necessity in order to preserve the value of the Liquidating Trust Assets.
3.4 Books and Records. The Liquidating Trustee shall maintain in respect
of the Liquidating Trust and the holders of Liquidating Trust Interests books
and records relating to the Liquidating Trust Assets and income of the
Liquidating Trust and the payment of expenses of, and liabilities of claims
against or assumed by, the Liquidating 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. Such books and records shall be maintained on a modified cash
or other comprehensive basis of accounting necessary to facilitate compliance
with the tax reporting requirements of the Liquidating Trust and the Liquidating
Trust Disputed Claims Reserve. Except as otherwise may be expressly provided in
this Trust Agreement, nothing in this Trust Agreement requires the Liquidating
Trustee to file any accounting or seek approval of any court with respect to the
administration of the Liquidating Trust, or as a condition for managing any
payment or distribution out of the Liquidating Trust Assets.
3.5 Additional Powers. Except as otherwise set forth in this Trust
Agreement or in the Plan or the Schemes, and subject to the Treasury Regulations
governing liquidating trusts and the retained jurisdiction of the Court as
provided for in the Plan, but without prior or further authorization, the
Liquidating Trustee may control and exercise authority over the Liquidating
Trust Assets and over the protection, conservation and disposition thereof. No
Person dealing with the Liquidating Trust shall be obligated to inquire into the
authority of the Liquidating Trustee in connection with the protection,
conservation or disposition of the Liquidating Trust Assets.
3.6 Tax and Reporting Duties of the Liquidating Trustee. The Liquidating
Trustee shall be responsible for all tax and other matters as set forth in
Article 4.
3.7 Compliance with Laws. Any and all distributions of Liquidating Trust
Assets and proceeds of borrowings, if any, shall be in compliance with
applicable laws, including, without limitation, applicable federal and state
securities laws.
3.8 Costs and Expenses of the Liquidating Trustee. The costs and expenses
of the Liquidating Trust, including the fees and expenses of the Liquidating
Trustee and its retained professionals shall be paid first out of the Estate
Representative Expense Fund and then out of the Liquidating Trust Assets. Fees
and expenses incurred in connection with the prosecution and
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settlement of Estate Representative Claims shall be considered costs and
expenses of the Liquidating Trust.
3.9 Compensation of the Liquidating Trustee. The Trustees comprising the
Liquidating Trustee shall be entitled to reasonable compensation in an amount
consistent with that of similar functionaries in similar types of reorganization
proceedings, provided, however, that they shall not receive double compensation
for functions that they perform as both Liquidating Trustee and Estate
Representative.
3.10 Retention of Professionals by the Liquidating Trustee. The
Liquidating Trustee (acting through all Trustees or through the Claims
Subcommittee, as the case may be) may retain and compensate counsel and other
professionals to assist in its duties as Liquidating Trustee on such terms as
the Liquidating Trustee deems appropriate without Bankruptcy Court approval. The
Liquidating Trustee may retain any professional who represented parties in
interest in the Reorganization Cases or the Bermuda Proceedings.
3.11 Reliance by Liquidating Trustee. Except as otherwise provided in
Article 8 hereof:
(a) the Liquidating Trustee and each Liquidating Trustee may rely,
and shall be protected in acting upon, any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, or other paper or
document believed by him to be genuine and to have been signed or presented by
the proper party or parties; and
(b) Persons dealing with the Liquidating Trustee shall look only to
the Liquidating Trust Assets to satisfy any liability incurred by the
Liquidating Trustee to such person in carrying out the terms of this Trust
Agreement, and neither the Liquidating Trustee nor any Trustee shall have any
personal obligation to satisfy any such liability.
3.12 Investment and Safekeeping of Trust Assets. The right and power of
the Liquidating Trustee to invest Liquidating Trust Assets, the proceeds
thereof, any cash withdrawn from the Estate Representative Expense Fund, or any
income earned by the Liquidating Trust, shall be limited to the right and power
that a liquidating trust, within the meaning of Treasury Regulations Section
301.7701-4(d), is permitted to hold, pursuant to the Treasury Regulations, or
any modification in the IRS guidelines, whether set forth in IRS rulings, other
IRS pronouncements or otherwise. The Liquidating Trustee may expend the Cash of
the Liquidating Trust (a) as reasonably necessary to meet contingent liabilities
and to maintain the value of the respective assets of the Liquidating Trust
during liquidation, (b) to pay the reasonable costs and expenses (including,
without limitation, any taxes imposed on the Liquidating Trust or the
Liquidating Trust Disputed Claims Reserve) and (c) to satisfy other respective
liabilities incurred by the Liquidating Trust in accordance with this Trust
Agreement, the Plan, or the Schemes.
3.13 Authorization to Expend Liquidating Trust Assets. The Liquidating
Trustee may expend the Liquidating Trust Assets (a) as reasonably necessary to
maintain the value of the Liquidating Trust Assets during liquidation, (b) to
pay all costs and expenses of the Liquidating Trust (including, without
limitation, any taxes imposed on the Liquidating Trust and the Liquidating Trust
Disputed Claims Reserve), (c) to fund the costs and expenses of the Liquidating
Trust Disputed Claims Reserve, and (d) to satisfy all other liabilities incurred
or assumed by the
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Liquidating Trust (or to which the Liquidating Trust Assets are otherwise
subject) in accordance with this Trust Agreement, the Plan or the Schemes.
ARTICLE 4
TAX MATTERS
4.1 Federal Income Tax Treatment of the Trust for the Liquidating Trust
Assets.
(i) Liquidating Trust Assets Treated as Owned by Creditors. For
all federal income tax purposes, all parties (including, without limitation, the
Debtors, the Liquidating Trustee, and the Beneficiaries) shall treat the
transfer of the Liquidating Trust Assets to the Liquidating Trust for the
benefit of the Beneficiaries as (A) a transfer of the Liquidating Trust Assets
directly to the Beneficiaries followed by (B) the transfer by such holders to
the Liquidating Trust of the Liquidating Trust Assets in exchange for beneficial
interests in the Liquidating Trust. Accordingly, the Beneficiaries shall be
treated for federal income tax purposes as the grantors and owners of their
respective share of the Liquidating Trust Assets.
(ii) Tax Reporting.
A. The Liquidating Trustee shall file returns for the
Liquidating Trust as a grantor trust pursuant to Treasury Regulation
section 1.671-4(a) and in accordance with this Article 4. The Liquidating
Trustee shall also annually send to each holder of a beneficial interest a
separate statement setting forth the holder's share of items of income,
gain, loss, deduction or credit and will instruct all such holders to
report such items on their federal income tax returns. The Liquidating
Trust's taxable income, gain, loss, deduction or credit will be allocated
(subject to subsection C hereof, relating to Disputed Claims) to the
Beneficiaries in accordance with their relative beneficial interests in the
Liquidating Trust.
B. As soon as possible after the Effective Date, the
Liquidating Trustee shall make a good faith valuation of the Liquidating
Trust Assets, and such valuation shall be used consistently by all parties
(including, without limitation, the Debtors, the Liquidating Trustee, and
the Beneficiaries) for all federal income tax purposes. The Liquidating
Trustee shall also file (or cause to be filed) any other statements,
returns or disclosures relating to the Liquidating Trust that are required
by any governmental unit.
C. Subject to definitive guidance from the IRS or a court
of competent jurisdiction to the contrary (including the receipt by the
Liquidating Trustee of a private letter ruling if the Liquidating Trustee
so requests one, or the receipt of an adverse determination by the IRS upon
audit if not contested by the Liquidating Trustee), the Liquidating Trustee
shall (i) treat such Liquidating Trust Assets allocable to, or retained on
account of, Disputed Claims in Class F (the "Disputed Class F Claims") as
held by a discrete trust for federal income tax purposes (the "Liquidating
Trust Disputed Claims Reserve"), consisting of separate and independent
shares to be established in respect of each Disputed Class F Claim, in
accordance with the trust provisions of the Tax Code (section 641 et seq.),
(ii) treat as taxable income or loss of the Liquidating Trust Disputed
Claims
11
Reserve, with respect to any given taxable year, the portion of the taxable
income or loss of the Liquidating Trust that would have been allocated to
the holders of Disputed Class F Claims had such Claims been Allowed on the
Effective Date (but only for the portion of the taxable year with respect
to which such Disputed Class F Claims are unresolved), (iii) treat as a
distribution from the Liquidating Trust Disputed Claims Reserve any
increased amounts distributed by the Liquidating Trust as a result of any
Disputed Class F Claims resolved earlier in the taxable year, to the extent
such distributions relate to taxable income or loss of the Liquidating
Trust Disputed Claims Reserve determined in accordance with the provisions
hereof, and (iv) to the extent permitted by applicable law, shall report
consistent with the foregoing for state and local income tax purposes. All
Beneficiaries shall report, for tax purposes, consistent with the
foregoing.
D. The Liquidating Trustee shall be responsible for
payments, out of the Liquidating Trust Assets, of any taxes imposed on the
trust or its assets, including the Liquidating Trust Disputed Claims
Reserve. In the event, and to the extent, any Cash retained on account of
Disputed Class F Claims in the Liquidating Trust Disputed Claims Reserve is
insufficient to pay the portion of any such taxes attributable to the
taxable income arising from the assets allocable to, or retained on account
of, Disputed Class F Claims, such taxes paid by the Liquidating Trustee
other than from the Liquidating Trust Disputed Claims Reserve shall be (i)
reimbursed from any subsequent Cash amounts retained on account of Disputed
Class F Claims or (ii) to the extent such Disputed Class F Claims have
subsequently been resolved, deducted from any amounts distributable by the
Liquidating Trustee as a result of the resolutions of such Disputed Claims.
E. The Liquidating Trustee may request an expedited
determination of Taxes of the Liquidating Trust, including the Liquidating
Trust Disputed Claims Reserve under section 505(b) of the Bankruptcy Code
for all returns filed for, or on behalf of, the Liquidating Trust for all
taxable periods through the dissolution of the Liquidating Trust.
ARTICLE 5
LIQUIDATING TRUST DISPUTED CLAIMS RESERVE
5.1 Creation of Reserve. On the Effective Date, the Liquidating Trustee
shall place an undivided interest in a portion of the Liquidating Trust Assets
in the Liquidating Trust Disputed Claims Reserve for Disputed Class F Claims.
The percentage of Liquidating Trust Assets so placed in the Liquidating Trust
Disputed Claims Reserve shall equal 5.89%, multiplied by the aggregate amount of
Class F Claims other than those that are Allowed as of the Effective Date,
divided by the aggregate amount of Class F Claims (the "Reserved Trust Assets").
5.2 Withholding Pending Allowance of Claims. The Liquidating Trustee
shall withhold from any property to be distributed to Allowed Class F Claims
under this Trust Agreement the Reserved Trust Assets and shall hold such
property in trust pending resolution of the Disputed Class F Claims, together
with all earnings thereon (net of any expenses allocable thereto, including,
without limitation, any taxes imposed thereon or otherwise payable by the
trust).
12
ARTICLE 6
DISTRIBUTIONS
6.1 Delivery of Liquidating Trust Distributions.
(a) All distributions under this Trust Agreement to any holder of an
Allowed Claim in Class F shall be made at the address of such holder as set
forth on the Schedules or on the books and records of the Debtors or their
agents, unless the Liquidating Trustee has been notified in writing of a change
of address, including, without limitation, by the filing of a proof of claim or
interest by such holder that contains an address for such holder different from
the address reflected on the Schedules for such holder. In the event that any
distribution to any holder is returned as undeliverable, the Liquidating Trustee
shall use reasonable efforts to determine the current address of such holder,
but no distribution to such holder shall be made unless and until the
Liquidating Trustee has determined the then current address of such holder, at
which time such distribution shall be made to such holder without interest;
provided, however, that such undeliverable or unclaimed distributions shall be
deemed unclaimed property at the expiration of one year from the date of
distribution. The Liquidating Trustee shall reallocate the undeliverable and
unclaimed distributions from Class F for the benefit of the holders of other
Claims in Class F.
(b) All distributions under this Trust Agreement to holders of Allowed
Claims in Classes C, D and E shall be made as directed on or about the Effective
Date by the person or entity set forth in Section 12.6 hereof for that class for
distribution to those holders; provided, it is understood that, notwithstanding
any instructions to the contrary, distributions to certain holders of Allowed
Claims in Class E (referred to as the so called "Frontier Noteholders") shall be
subject to and made in accordance with that certain Stipulation and Agreement,
approved by the Bankruptcy Court on November __, 2003.
6.2 Manner of Payment. At the option of the Liquidating Trustee, any Cash
payment to be made under this Trust Agreement may be made by a check or wire
transfer or as otherwise required or provided in applicable agreements.
6.3 Cash Distributions. No Cash distributions shall be required to be
made in an amount less than $5.00. Any funds so withheld and not distributed
shall be held in reserve and distributed in subsequent distributions.
Notwithstanding the foregoing, all cash shall be distributed in the final
liquidating distribution of the Liquidating Trust.
6.4 Distributions After Resolution of Class F Claims. On the next
scheduled distribution date after a Disputed Class F Claim becomes an Allowed
Claim, the Liquidating Trustee shall distribute to the holder of such Claim such
holder's Ratable Proportion of the property net of taxes distributable with
respect to Allowed Class F Claims. To the extent that all or a portion of a
Disputed Class F Claim is disallowed, the holder of such Claim shall not receive
any distribution on account of the portion of such Claim that is disallowed, and
the portion of Reserved Trust Assets attributable to such disallowed Claim shall
be removed from the Liquidating Trust Disputed Claims Reserve and reallocated to
and among Allowed Class F Claims pro rata in proportion to their respective
Liquidating Trust Interests.
13
ARTICLE 7
SUCCESSOR TRUSTEES
7.1 Resignation. A Trustee may resign by giving not less than ninety (90)
days' prior written notice thereof to the holders of Liquidating Trust
Interests. Such resignation shall become effective on the later to occur of: (i)
the day specified in such notice; or (ii) the appointment of a successor Trustee
and the acceptance by such successor Trustee of such appointment. If a successor
Trustee is not appointed or does not accept its appointment within ninety (90)
days following delivery of notice of resignation, the Liquidating Trustee may
petition the Bankruptcy Court for the appointment of a successor Trustee.
7.2 Removal of Consensual Trustee. The initial Consensual Trustee shall
be __________. The Consensual Trustee (and its successors) may be removed at any
time by the vote of at least three (3) of the other Trustees. If such other
Trustees take any action to remove the Consensual Trustee pursuant to this
Section 7.2, such other Trustees may, in connection with such action, appoint a
successor Consensual Trustee. Any failure to so appoint a successor Consensual
Trustee will result in the appointment of a successor Consensual Trustee in
accordance with the provisions of Section 7.3 hereof. Any removal pursuant to
this Section 7.2 shall be effective on the date specified in any such action
taken by Trustees.
7.3 Appointment of Successor upon Removal, Resignation, or Incapacity. If
a Trustee is removed pursuant to Section 7.2 hereof, resigns pursuant to Section
7.1 hereof, or otherwise is incapable of serving as Trustee, a successor Trustee
shall be appointed as follows: the successors to the Trustees that had been
designated by the Agent (and their successors) shall be appointed by the Agent
(and its successors and assigns); the successor to the Trustee that had been
designated by or on behalf of the bondholders on the Creditors Committee shall
be appointed by __________ (and its successors and assigns); the successor to
the Trustee that had been designated by or on behalf of the trade creditors on
the Creditors Committee shall be appointed by __________ (and its successors and
assigns); and the successor to the Consensual Trustee (and its successors) shall
be appointed by at least three (3) of the other Trustees. If a successor Trustee
is not appointed or does not accept its appointment within seventy-five (75)
days following such action for removal, delivery of notice of resignation, or
incapacity of the predecessor Trustee, as the case may be, any holder of
Liquidating Trust Interests may petition the Bankruptcy Court for the
appointment of a successor Trustee consistent with the intent of this Trust
Agreement.
7.4 Acceptance of Appointment by Successor Trustee. Any successor Trustee
appointed hereunder shall execute an instrument accepting such appointment
hereunder and shall file such acceptance with the Liquidating Trust records.
Thereupon, such successor Trustee shall, without any further act, become vested
with all the estates, properties, rights, powers, trusts and duties of its
predecessor in the Liquidating Trust with like effect as if originally named
herein; provided, however, that a removed, incapacitated, or resigning Trustee
shall, nevertheless, when requested in writing by the successor Trustee, execute
and deliver an instrument or instruments conveying and transferring to such
successor Trustee under the Liquidating Trust all the estates, properties,
rights, powers, and trusts of such predecessor Trustee.
ARTICLE 8
14
INDEMNIFICATION
8.1 Indemnification of Liquidating Trustee. The Liquidating Trustee, and
the Liquidating Trustee's agents, representatives, designees, and professionals,
and their respective employees, shall not be liable for actions taken or omitted
by any individual Trustee, agent, representative, designee, professional, or
employee, and shall not be liable for any actions taken or omitted in its
capacity as, or on behalf of, the Liquidating Trustee (or individual Trustee),
except those acts or omissions arising out of its or their own willful
misconduct, fraud, or gross negligence, and each shall be entitled to
indemnification and reimbursement for fees and expenses in defending any and all
of its actions or inactions in its capacity as, or on behalf of, the Liquidating
Trustee, except for any actions or inactions involving willful misconduct,
fraud, or gross negligence. Any indemnification claim of the Liquidating Trustee
(and the other parties entitled to indemnification under this Section 8.2) shall
be satisfied first from the Estate Representative Expense Fund and then from the
Liquidating Trust Assets provided, however, that before any distribution from
the Estate Representative Expense Fund to New Global Crossing, any sums paid
from the Liquidating Trust Assets pursuant to this section shall be reimbursed
to the Liquidating Trust from the Estate Representative Expense Fund. The
Liquidating Trustee shall be entitled to rely, in good faith, on the advice of
its retained professionals. The Liquidating Trust shall indemnify and hold
harmless the Liquidating Trustee and its Trustees, designees, and professionals,
and all duly designated agents and representatives thereof, from and against and
in respect of all liabilities, losses, damages, claims, costs, and expenses,
including without limitation attorneys' fees and costs arising out of or due to
their actions or omissions, or consequences of such actions or omissions, with
respect to the Liquidating Trust or the implementation or administration of this
Trust Agreement and the Plan; provided, however, that no such indemnification
will be made for such actions or omissions as a result of willful misconduct,
fraud, or gross negligence.
ARTICLE 9
REPORTS TO HOLDERS OF LIQUIDATING TRUST INTERESTS
9.1 Securities Laws, Tax and Other Reports to Holders of Liquidating
Trust Interests.
(a) Securities Laws. Under section 1145 of the Bankruptcy Code, the
issuance of Liquidating Trust Interests under the Plan shall be exempt from
registration under the Securities Act of 1933 and applicable state and local
laws requiring registration of securities. If the Liquidating Trustee
determines, with the advice of counsel, that the Liquidating Trust is required
to comply with the registration and reporting requirements of the Securities
Exchange Act of 1934, as amended, or the Investment Company Act of 1940, as
amended, then the Liquidating Trustee shall take any and all actions to comply
with such reporting requirements and file periodic reports with the Securities
and Exchange Commission.
(b) Other Reporting. If the Liquidating Trustee is not required to
file the periodic reports referred to in Section 9.1(a) above, as soon as
practicable after December 31 [and June 30] of each year, and as soon as
practicable upon termination of the Liquidating Trust, the Liquidating Trustee
shall submit to each holder of Liquidating Trust Interests appearing on its
records as of such date or the date of termination a written report including,
without limitation, the following: (i)
15
financial statements of the Liquidating Trust for such period prepared on a
modified cash basis or other comprehensive basis of accounting, and, if the end
of a calendar year, a report of an independent certified public accountant
employed by the Liquidating Trustee, which report shall reflect the result of
such procedures relating to the financial accounting administration of the
Liquidating Trust as approved by the Liquidating Trustee; and (ii) a description
of any action taken by the Liquidating Trustee in the performance of its duties
that materially affects the Liquidating Trust and of which notice has not
previously been given to the holders of Liquidating Trust Interests. The
Liquidating Trustee shall promptly submit additional reports to the holders of
Liquidating Trust Interests whenever a material event or change occurs that
affects either the Liquidating Trust or the rights of the holders of Liquidating
Trust Interests hereunder. The semi-annual reports furnished pursuant to this
Section 9.1(b) shall include a description of the progress of converting
Liquidating Trust Assets to Cash and making distributions to holders of
Liquidating Trust Interests and any other material information relating to the
Liquidating Trust Assets and the administration of the Liquidating Trust.
(c) Tax Reporting. By March 31 (if such day is not a Business Day,
the first Business Day thereafter) following the end of each calendar year, the
Liquidating Trustee shall submit to each holder of a Liquidating Trust Interest
appearing on its records during such year a separate statement setting forth the
holder's share of items of income, gain, loss, deduction or credit and will
instruct all such holders to report such items on their federal income tax
returns. The Liquidating Trust's taxable income, gain, loss, deduction, and
credit will be allocated pro rata to the holders of Liquidating Trust Interests
in accordance with such holders' respective beneficial interests in the Trust,
subject to the provisions of Article 5 hereof relating to Disputed Class F
Claims. In addition, the Liquidating Trustee shall file all tax returns required
to be filed with respect to the Liquidating Trust Disputed Claims Reserve, shall
report on such returns in a manner consistent with Article 4 hereof, and shall
pay all taxes on such returns in accordance with Article 4 hereof. The
Liquidating Trustee shall file (or cause to be filed) any other statements,
returns, or disclosures relating to the Liquidating Trust that are required by
any governmental authority.
(d) Any report required to be distributed by the Liquidating Trustee
under Section 9.1(b) hereof shall also be distributed to the Persons listed in
Section 12.6 hereof within ten Business Days of its distribution to holders of
Liquidating Trust Interests under Section 9.1(b) hereof. The Liquidating Trustee
may post any report required to be provided under this Section 9.1 on a web site
maintained by the Liquidating Trustee in lieu of actual notice to holders of
Liquidating Trust Interests (unless otherwise required by law) subject to
providing notice to the Persons listed in Section 12.6 herein.
ARTICLE 10
TERMINATION OF LIQUIDATING TRUST
10.1 Termination of Liquidating Trust. The Liquidating Trust will
terminate on the earlier of: (a) thirty (30) days after the final distribution
of all of the Liquidating Trust Assets in accordance with the terms of this
Trust Agreement and the Plan; or (b) the fifth (5/th/) anniversary of the
Effective Date. Notwithstanding the foregoing, multiple fixed-term extensions
can be obtained so long as Bankruptcy Court approval upon motion and a showing
that such extension is necessary to facilitate or complete the recovery and
liquidation of the Liquidation Trust Assets is obtained
16
within six (6) months before the expiration of the original term and each
extended term. The aggregate of all such extensions shall not exceed three (3)
years, unless the Liquidating Trustee receives a favorable ruling from the IRS
that any further extension would not adversely affect the status of the
Liquidating Trust as a liquidating trust within the meaning of Treasury
Regulations Section Section 301.7701-4(d) for federal income tax purposes. The
Liquidating Trustee shall not unduly prolong the duration of the Liquidating
Trust and shall at all times endeavor to resolve, settle or otherwise dispose of
all claims that constitute Liquidating Trust Assets and to effect the
distribution of the Liquidating Trust Assets to the holders of the Liquidating
Trust Interests in accordance with the terms hereof and terminate the
Liquidating Trust as soon as practicable.
ARTICLE 11
AMENDMENT AND WAIVER
11.1 Amendment and Waiver.
(a) The Liquidating Trustee may amend, supplement or waive any provision
of, this Trust Agreement, without notice to or the consent of any Beneficiary or
the approval of the Bankruptcy Court: (i) to cure any ambiguity, omission,
defect or inconsistency in this Agreement provided that such amendments,
supplements or waivers shall not adversely affect the Distributions to be made
under this Trust Agreement to any Beneficiaries, or adversely affect the U.S.
Federal income status of the Liquidating Trust as a "liquidating trust" (in
accordance with Section 1.2 hereof); (ii) to comply with any requirements in
connection with the U.S. Federal income status of the Liquidating Trust as a
"liquidating trust"; (iii) to comply with any requirements in connection with
maintaining that the Liquidating Trust is not subject to the registration or
reporting requirements of the Securities Exchange Act of 1934, as amended, or
the Investment Company Act of 1940, as amended; and (iv) to evidence and provide
for the acceptance of appointment hereunder by a successor Trustee in accordance
with the terms of this Trust Agreement and the Plan.
(b) Any substantive provision of this Trust Agreement may be amended or
waived by the Liquidating Trustee with the approval of the Bankruptcy Court, or
by the Liquidating Trustee, provided, however, that no change may be made to
this Trust Agreement that would adversely affect the Distributions to be made
under this Trust Agreement to any Beneficiaries, or adversely affect the U.S.
Federal income status of the Liquidating Trust as a "liquidating trust" (in
accordance with Section 1.2 hereof). Notwithstanding this Section 11.1, any
amendments to this Trust Agreement shall not be inconsistent with the purpose
and intention of the Liquidating Trust to liquidate in an expeditious but
orderly manner the Liquidating Trust Assets in accordance with Treasury
Regulations Section 301.7701-4(d) and Section 1.2 hereof.
ARTICLE 12
MISCELLANEOUS PROVISIONS
17
12.1 Intention of Parties to Establish Liquidating Trust. This Trust
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 herewith and, if necessary, this Trust Agreement may be amended to
comply with such federal income tax laws, which amendments may apply
retroactively.
12.2 Preservation of Privilege and Defenses. In connection with the
rights, claims, and causes of action that constitute the Liquidating Trust
Assets, any attorney-client privilege, work-product privilege, or other
privilege or immunity attaching to any documents or communications (whether
written or oral) transferred to the Liquidating Trust shall vest in the
Liquidating Trustee and its representatives, and the Debtors are authorized to
take all necessary actions to effectuate the transfer of such privileges and
available defenses.
12.3 Prevailing Party. If the Liquidating Trustee or the Liquidating
Trust, as the case may be, is the prevailing party in a dispute regarding the
provisions of this Trust Agreement or the enforcement thereof, the Liquidating
Trustee or the Liquidating Trust, as the case may be, shall be entitled to
collect any and all costs, expenses and fees, including attorneys' fees, from
the non-prevailing party incurred in connection with such dispute or enforcement
action.
12.4 Laws as to Construction. This Trust Agreement shall be governed by
and construed in accordance with the laws of the State of New York, without
giving effect to rules governing the conflict of laws. In the event of any
conflict between the terms of this Trust Agreement and the Plan or the Schemes,
this Trust Agreement shall control.
12.5 Severability. If any provision of this Trust Agreement or the
application thereof to any Person or circumstance shall be finally determined by
a court of competent jurisdiction to be invalid or unenforceable to any extent,
the remainder of this Trust 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 such provision of this Trust
Agreement shall be valid and enforced to the fullest extent permitted by law.
12.6 Notices. Any notice or other communication hereunder shall be in
writing (including by facsimile transmission or by e-mail) and shall be deemed
to have been sufficiently given, for all purposes, if deposited, postage
prepaid, in a post office or letter box addressed to the person for whom such
notice is intended (or, in the case of notice by facsimile transmission or
e-mail, when received and telephonically or electronically confirmed), addressed
as follows (provided, however, that only one notice or other communication
hereunder need be sent to holders sharing the same address):
If to the Liquidating Trustee or Trustees, to:
---------------------------------------------
---------------
---------------
---------------
---------------
18
---------------
---------------
---------------
---------------
With a copy to:
▇▇▇▇▇ ▇. Brilliant, Esq.
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
---------------
---------------
---------------
---------------
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇ ▇▇▇▇▇▇▇ Berlack Israels LLP
▇▇▇ ▇▇▇▇ ▇▇/▇▇/ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
---------------
---------------
---------------
---------------
If to the Beneficiaries:
-----------------------
Class C:
-------
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇▇▇ Chase Bank
Special Loans Group
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇/▇▇/ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
With copy to:
▇▇▇▇▇ ▇. Brilliant, Esq.
Milbank, Tweed, ▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP
▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
19
Facsimile: ▇▇▇-▇▇▇-▇▇▇▇
Class D:
-------
The Bank of New York
[address]
[Facsimile]
with copies to:
[to be provided]
Class E:
-------
Wilmington Trust Company
[address]
[facsimile]
▇▇▇▇▇ Fargo Bank Minnesota, National Association
[address]
[facsimile]
With copies to:
[To be provided]
Class F:
-------
[to be provided]
12.7 Headings. The section headings contained in this Trust Agreement are
solely for convenience of reference and shall not affect the meaning or
interpretation of this Trust Agreement or of any term or provision hereof.
20
12.8 Counterparts. This Trust Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument, but
all together shall constitute one agreement.
12.9 Relationship to the Plan and the Schemes. The principal purpose of
this Trust Agreement is to aid in the implementation of the Plan and the Schemes
and therefore this Trust Agreement incorporates the provisions of the Plan and
the Schemes. To that end, the Liquidating Trustee shall have full power and
authority to take any action consistent with the purpose and provisions of the
Plan and the Schemes, and to seek any orders from the Bankruptcy Court in
furtherance of implementation of this Trust Agreement, the Plan and the Schemes.
If any provisions of this Trust Agreement are found to be inconsistent with the
provisions of the Plan or the Schemes, the provisions of this Trust Agreement
shall control.
12.10 No Bond. The Liquidating Trustee and each Trustee may serve without
bond.
12.11 Confidentiality. The Liquidating Trustee and each Trustee shall,
during the period that they serve in such capacity under this Trust Agreement
and following either the termination of this Trust Agreement or such Liquidating
Trustee's removal, incapacity, or resignation hereunder, hold strictly
confidential and not use for personal gain any material, non-public information
of or pertaining to any entity to which any of the Liquidating Trust Assets
relates or of which it has become aware in its capacity as Liquidating Trustee
or Trustee.
IN WITNESS WHEREOF, the parties hereto have either executed and
acknowledged this Trust Agreement, or caused it to be executed and acknowledged
on their behalf by their duly authorized officers all as of the date first above
written.
Debtors and Debtors in Possession
By:
------------------------------------
Name:
Title:
Liquidating Trustee
----------------------------------------
Name:
----------------------------------------
Name:
21
----------------------------------------
Name:
----------------------------------------
Name:
----------------------------------------
Name:
22
Exhibit A
Debtors
-------
--------------------------------------------------------------------------------
1. Global Crossing North America, Inc.
--------------------------------------------------------------------------------
2. Global Crossing Ltd.
--------------------------------------------------------------------------------
3. Atlantic Crossing Ltd.
--------------------------------------------------------------------------------
4. Atlantic Crossing Holdings Ltd.
--------------------------------------------------------------------------------
5. Global Crossing Cyprus Holdings Limited
--------------------------------------------------------------------------------
6. GC Pan European Crossing Luxembourg I S.a.r.l.
--------------------------------------------------------------------------------
7. GC Pan European Crossing Luxembourg II S.a.r.l.
--------------------------------------------------------------------------------
8. GC Pan European Crossing Holdings B.V.
--------------------------------------------------------------------------------
9. Mid-Atlantic Crossing Holdings Ltd.
--------------------------------------------------------------------------------
10. Global Crossing Holdings U.K. Limited
--------------------------------------------------------------------------------
11. Global Crossing International Ltd.
--------------------------------------------------------------------------------
12. Global Crossing Network Center Ltd.
--------------------------------------------------------------------------------
13. Pan American Crossing U.K. Ltd.
--------------------------------------------------------------------------------
14. Mid-Atlantic Crossing Ltd.
--------------------------------------------------------------------------------
15. Pan American Crossing Holdings Ltd.
--------------------------------------------------------------------------------
16. South American Crossing Holdings Ltd.
--------------------------------------------------------------------------------
17. Pan American Crossing Ltd.
--------------------------------------------------------------------------------
18. Atlantic Crossing Holdings U.K. Limited
--------------------------------------------------------------------------------
19. ALC Communications Corporation
--------------------------------------------------------------------------------
20. Budget Call Long Distance, Inc.
--------------------------------------------------------------------------------
21. Business Telemanagement, Inc.
--------------------------------------------------------------------------------
22. GC Dev. Co., Inc.
--------------------------------------------------------------------------------
23. GC Mart LLC
--------------------------------------------------------------------------------
24. GC Pacific Landing Corp
--------------------------------------------------------------------------------
25. Global Crossing Advanced Card Services, Inc.
--------------------------------------------------------------------------------
26. Global Crossing Bandwidth, Inc.
--------------------------------------------------------------------------------
27. Global Crossing Billing, Inc.
--------------------------------------------------------------------------------
28. Global Crossing Development Co.
--------------------------------------------------------------------------------
29. Global Crossing Employee Services, Inc.
--------------------------------------------------------------------------------
30. Global Crossing GlobalCenter Holdings, Inc.
--------------------------------------------------------------------------------
31. Global Crossing Government Markets USA, Inc.
--------------------------------------------------------------------------------
32. Global Crossing Holdings USA LLC
--------------------------------------------------------------------------------
33. Global Crossing Internet Dial-Up, Inc.
--------------------------------------------------------------------------------
34. Global Crossing Latin America & Caribbean Co.
--------------------------------------------------------------------------------
35. Global Crossing Local Services, Inc.
--------------------------------------------------------------------------------
36. Global Crossing North American Holdings, Inc.
--------------------------------------------------------------------------------
37. Global Crossing Management Services, Inc.
--------------------------------------------------------------------------------
38. Global Crossing North American Networks, Inc.
--------------------------------------------------------------------------------
23
--------------------------------------------------------------------------------
39. Global Crossing Telecommunications, Inc.
--------------------------------------------------------------------------------
40. Global Crossing Telemanagement VA LLC
--------------------------------------------------------------------------------
41. Global Crossing Telemanagement, Inc.
--------------------------------------------------------------------------------
42. Global Crossing USA, Inc.
--------------------------------------------------------------------------------
43. Global Crossing Ventures, Inc.
--------------------------------------------------------------------------------
44. GT Landing Corp.
--------------------------------------------------------------------------------
45. GT Landing II Corp.
--------------------------------------------------------------------------------
46. MAC Landing Corp.
--------------------------------------------------------------------------------
47. Metaclorin Investco II, Inc.
--------------------------------------------------------------------------------
48. PAC Landing Corp.
--------------------------------------------------------------------------------
49. Subsidiary Telco LLC
--------------------------------------------------------------------------------
50. US Crossing, Inc.
--------------------------------------------------------------------------------
51. IXNet, Inc.
--------------------------------------------------------------------------------
52. GC St. Croix Company, Inc.
--------------------------------------------------------------------------------
53. Equal Access Networks, LLC
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54. Atlantic Crossing II Ltd.
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55. Global Crossing Holdings Ltd.
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56. GT U.K. Ltd.
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57. SAC Peru S.R.L.
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58. GC Pan European Crossing UK Limited
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59. Global Crossing Network Center (UK) Ltd.
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60. South American Crossing Ltd.
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61. GT Netherlands B.V.
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62. GC Hungary Holdings Vagyonkezelo Korlatolt Felelossegu Tarasag
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63. GC Pan European Crossing Nederland B.V.
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64. GC UK Holding Ltd.
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65. Global Crossing Conferencing Limited
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66. Global Crossing Europe Limited
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67. Global Crossing Intellectual Property Ltd.
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68. Global Crossing Intermediate UK Holdings Limited
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69. Global Crossing Ireland Limited
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70. Global Crossing Services Europe Limited
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71. Global Crossing Services Ireland Limited
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72. Global Crossing Venezuela B.V.
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73. IXnet UK Limited
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74. Mid-Atlantic Crossing Holdings UK Ltd.
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75. PC Panama Ltd.
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76. GC SAC Argentina S.R.L.
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77. SAC Brazil Ltda.
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78. Global Crossing Portfolio Holdings Ltd.
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79. Global Crossing IXNet EMEA Holdings Limited
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80. SAC Colombia Ltda.
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24
EXHIBIT B
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Debtors
[To be provided]