LIQUIDATING TRUST AGREEMENT Dated as of September 29, 2006 by and between Professional Lease Management Income Fund I, L.L.C. individually as Grantor and PLM Financial Services, Inc. as the Trustee
EXHIBIT
10.2
Dated
as
of September 29, 2006
by
and
between
Professional
Lease Management Income Fund I, L.L.C.
individually
as Grantor
and
PLM
Financial Services, Inc.
as
the
Trustee
TABLE
OF
CONTENTS
ARTICLE
I: NAME AND DEFINITIONS
1.1 Name......................................................................................................................................................................................
2
1.2 Certain
Terms Defined
.......................................................................................................................................................
2
ARTICLE
II: NATURE OF TRANSFER
................................................................................................................................
2
2.1 Purpose
of Trust
................................................................................................................................................................
3
2.2 Prohibited
Activities ..........................................................................................................................................................
3
2.3 No
Reversion to the Company
.........................................................................................................................................
4
2.4 Payment
of Liabilities
........................................................................................................................................................
4
2.5 ▇▇▇▇
of
Sale, Assignment, Acceptance and Assumption Agreement; Instruments of Further
Assurance .......... 5
2.6 Incidents
of Ownership
....................................................................................................................................................
5
2.7 Notice
to
Unlocated Holders of Membership Interests
..............................................................................................
5
ARTICLE
III: BENEFICIARIES
.............................................................................................................................................
5
3.1 Beneficial
Interests
...........................................................................................................................................................
5
3.2 Rights
of
Beneficiaries
......................................................................................................................................................
6
3.3 No
Transfer of Interests of Beneficiaries
.......................................................................................................................
6
3.4 Trustee
as Beneficiary
......................................................................................................................................................
7
ARTICLE
IV: DURATION AND TERMINATION OF TRUST
4.1 Duration
.............................................................................................................................................................................
7
4.2 Other
Obligations of the Trustee upon Termination
..................................................................................................
7
ARTICLE
V: ADMINISTRATION OF TRUST ASSETS
..................................................................................................
7
5.1 Sale
of
Trust Assets
........................................................................................................................................................
7
5.2 Transactions
with Related Persons
...............................................................................................................................
7
5.3 Payment
of Claims, Expenses and Liabilities
...............................................................................................................
8
-i-
5.4 Interim
Distributions
....................................................................................................................................................
8
5.5 Final
Distribution
..........................................................................................................................................................
8
5.6 Reports
to Beneficiaries and Others
..........................................................................................................................
8
5.7 Federal
Income Tax Information
.................................................................................................................................
9
5.8 Employment
of Manager
.............................................................................................................................................
9
ARTICLE
VI: POWERS OF AND LIMITATIONS ON THE TRUSTEE
.....................................................................
10
6.1 Limitations
on Trustee
................................................................................................................................................
10
6.2 Specific
Powers of the Trustee
..................................................................................................................................
11
ARTICLE
VII: CONCERNING THE TRUSTEE, BENEFICIARIES, EMPLOYEES AND AGENTS
......................... 13
7.1 Generally
........................................................................................................................................................................
13
7.2 Reliance
by Trustee
.....................................................................................................................................................
13
7.3 Limitation
on Liability to Third Persons
...................................................................................................................
14
7.4 Recitals
..........................................................................................................................................................................
14
7.5 Indemnification
............................................................................................................................................................
14
7.6 Rights
of
Trustees, Employees, Independent Contractors and Agents to Own Trust Units
or
Other
Property and to
Engage in Other Business
...................................................................................................
16
7.7 Contribution
Back
........................................................................................................................................................
16
ARTICLE
VIII: PROTECTION OF PERSONS DEALING WITH THE TRUSTEE
..................................................... 16
8.1 Action
by
Trustee
....................................................................................................................................................... 16
8.2 Reliance
on Statements by the Trustee
...................................................................................................................
16
ARTICLE
IX: COMPENSATION OF TRUSTEE
...........................................................................................................
16
9.1 Amount
of
Compensation
..........................................................................................................................................
16
9.2 Dates
and
Timing of Payment
....................................................................................................................................
17
9.3 Expenses
........................................................................................................................................................................
17
-ii-
ARTICLE
X: THE TRUSTEE AND SUCCESSOR TRUSTEE
....................................................................................
17
10.1 Number
and Qualification of Trustees
.................................................................................................................
17
10.2 Resignation
and Removal
......................................................................................................................................
17
10.3 Appointment
of Successor
....................................................................................................................................
18
10.4 Acceptance
of Appointment by Successor Trustee
..........................................................................................
18
10.5 Bonds
.........................................................................................................................................................................
18
ARTICLE
XI: CONCERNING THE BENEFICIARIES
..................................................................................................
19
11.1 Evidence
of Action by Beneficiaries
.....................................................................................................................
19
11.2 Limitation
on Suits by Beneficiaries
......................................................................................................................
19
11.3 Requirement
of Undertaking
...................................................................................................................................
19
ARTICLE
XII: MEETING OF BENEFICIARIES
...........................................................................................................
19
12.1 Purpose
of Meetings
...............................................................................................................................................
19
12.2 Meeting
Called by Trustee
.....................................................................................................................................
19
12.3 Meeting
Called on Request of Beneficiaries
........................................................................................................
20
.
12.4 Persons
Entitled to Vote at Meeting of Beneficiaries
.........................................................................................
20
12.5 Quorum
......................................................................................................................................................................
20
12.6 Adjournment
of Meeting
........................................................................................................................................
20
12.7 Conduct
of Meetings
..............................................................................................................................................
20
12.8 Record
of
Meeting
..................................................................................................................................................
20
ARTICLE
XIII: AMENDMENTS
..................................................................................................................................
20
13.1 Consent
of Beneficiaries
........................................................................................................................................
20
13.2 Notice
and Effect of Amendment
.........................................................................................................................
21
13.3 Trustee’s
Declining to Execute Documents
.......................................................................................................
21
ARTICLE
XIV: MISCELLANEOUS PROVISIONS
.....................................................................................................
21
14.1 Filing
Documents
....................................................................................................................................................
21
-iii-
14.2 Intention
of Parties to Establish Trust
.................................................................................................................
21
14.3 Beneficiaries
Have No Rights or Privileges as Holders of Membership Interests
........................................ 22
14.4 Laws
as
to Construction
........................................................................................................................................
22
14.5 Severability
..............................................................................................................................................................
22
14.6 Notices
.....................................................................................................................................................................
22
14.7 Counterparts
...........................................................................................................................................................
23
SCHEDULE
A: Schedule
of Fees
EXHIBIT
A: Form
of
▇▇▇▇ of Sale, Assignment, Acceptance and Assumption Agreement
-iv-
This
LIQUIDATING TRUST AGREEMENT (this “Agreement”), dated as of September 29, 2006
(the “Effective Date”), by and between Professional Lease Management Income
Fund I, L.L.C., a Delaware limited liability company, as Grantor (the
“Company”), and PLM Financial Services, Inc., a Delaware corporation, as Trustee
(the “Trustee”).
WHEREAS,
the Company was organized for the objectives and purposes of owning and leasing,
and otherwise dealing with equipment and other personal property;
and
WHEREAS,
the terms of that certain Fifth Amended and Restated Operating Agreement, dated
as of January 24, 1995 (the “Operating Agreement”) provide that the Company
be dissolved upon the determination by PLM Financial Services, Inc., a Delaware
corporation, manager of the Company (the “Manager”) that it is necessary to
commence the liquidation of the assets of the Company in order for the
liquidation of all of the assets to be completed in an orderly and businesslike
fashion prior to January 1, 2006, provided that the Manager may extend the
liquidation process in its discretion so long as the liquidation and dissolution
of the Company is completed by December 31, 2010; and
WHEREAS,
as of the date hereof, the Manager has made a determination that it is in the
best interest of the Company to complete the liquidation of the Company by
transferring all remaining assets of the Company (the “Retained Assets”) to a
liquidating trust (the “Trust”) with PLM Financial Services, Inc., serving as
its initial trustee (the “Trustee”), including a cash reserve set aside for the
contingent and existing obligations of the Company (the “Cash Reserve”); and
WHEREAS,
the Trustee shall administer the Liquidating Trust pursuant to the terms of
this
Agreement and, upon satisfaction of all liabilities and obligations of the
Company and the Liquidating Trust, the Trustee shall distribute the residue
of
the proceeds of the liquidation of the assets of the Company in accordance
with
the terms hereof;
NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency
of
which are hereby acknowledged, the Company hereby agrees to grant, release,
assign, convey and deliver unto the Trustee for the benefit of the Beneficiaries
(as hereinafter defined), all of the right, title and interest of the Company
in
and to the Retained Assets for the uses and purposes stated herein on the
Effective Date, subject to the terms and provisions set out below, and the
Trustee hereby agrees to accept such Retained Assets and such Trust, subject
to
the following terms and provisions:
-1-
ARTICLE
I
NAME
AND
DEFINITIONS
1.1 Name.
This
Trust shall be known as the Professional Lease Management Income Fund I
Liquidating Trust.
1.2 Certain
Terms Defined.
For all
purposes of this instrument, unless the context otherwise requires:
(a) “Affiliated
Person”
shall
mean a Person (i) who in his individual capacity is a director, trustee,
officer, partner or employee of the Manager or of a Person who controls, is
controlled by or is under common control with the Manager or (ii) who
controls, is controlled by or is under common control with the
Manager.
(b) “Agreement”
shall
mean this instrument as originally executed or as it may from time to time
be
amended pursuant to the terms hereof.
(c) “Beneficial
Interest”
shall
mean each Beneficiary’s proportionate share of the Trust Assets in the Trust
determined by the ratio of the number of Membership Interests held by each
Beneficiary on the close of business on the Record Date in the Company over
the
total number of Membership Interests existing on such Record Date in the Company
and thereafter each Beneficiary’s proportional beneficial interest in the Trust
represented by Trust Units.
(d) “Beneficiaries”
shall
mean the holders of Trust Units from time to time on or after the Record Date,
including the Initial Beneficiaries and the Subsequent
Beneficiaries.
(e) “Cash
Reserve”
shall
mean a cash reserve set aside by the Manager for the contingent and existing
obligations of the Company.
(f) “Grantor”
shall
mean the Company.
(g) “Initial
Beneficiaries”
shall
mean the initial holders of Trust Units.
(h) “Liquidating
Trust”
shall
mean the liquidating trust maintained by the Trustee holding the Trust Assets
of
the Company, identified as the “Professional Lease Management Income Fund I
Liquidating Trust”; also referred to herein as the “Trust.”
(i) “Manager”
shall
mean such Person or Persons who have been employed by, or who have contracted
with, the Trustee to assist in the management of the Trust, and for the
avoidance of doubt, such Person or Persons may include affiliates of the
Manager.
(j) “Membership
Interests”
shall
mean the Class A and Class B Membership Interests in the Company held
by each of the Beneficiaries as of the Record Date.
-2-
(k) “Person”
shall
mean an individual, a corporation, a Company, an association, a joint stock
company, a limited liability company, a trust, a joint venture, any
unincorporated organization, or a government or political subdivision
thereof.
(l) “Record
Date”
shall
mean the date selected by the Grantor for determination of the holders of
Membership Interests entitled to become Beneficiaries.
(m) “Related
Person”
shall
have the meaning set forth in Section 5.2.
(n) “Subsequent
Beneficiaries”
shall
mean Beneficiaries as reflected on the books and records of the Trust from
time
to time after the Effective Date, other than the Initial
Beneficiaries.
(o) “Trust”
shall
mean the Trust created by this Agreement.
(p) “Trust
Assets”
shall
mean all the property held from time to time by the Trustee under this
Agreement, which initially shall consist of the Retained Assets of the Company
granted, assigned and conveyed to the Trustee by the Company including, but
not
limited to, the Cash Reserve, and, in addition, shall thereafter include all
proceeds and other receipts of, from, or attributable to any assets, causes
of
actions or claims held by the Trust.
(q) “Trust
Units”
shall
mean those equal, undivided portions into which the Beneficial Interests in
the
Trust Assets are divided, as evidenced on the books and records of the
Trust.
(r) “Trustee”
shall
mean the original Trustee under this Agreement and its successor(s), if
any.
ARTICLE
II
NATURE
OF
TRANSFER
2.1 Purpose
of Trust.
(a) It
is
expected that the Company shall dissolve and liquidate prior to fully winding
up
its affairs, including, but not limited to, the sale of its remaining assets,
the collection of any receivables and the payment of any unsatisfied debts,
claims, liabilities, commitments, suits and other obligations, whether
contingent or fixed or otherwise (the “Liabilities”), except for such
Liabilities for which the Company has previously reserved by the allocation
of
the Cash Reserve as described in the recitals hereto. The Trust hereby is
organized for the sole purpose of winding up the affairs of the Company as
promptly as reasonably possible and with no objective to continue or engage
in
the conduct of a trade or business.
(b) The
Cash
Reserve and Retained Assets to be granted, assigned and conveyed to the Trustee
as of the Effective Date will be held in the Trust, and the Trustee will:
(i) further liquidate the Trust Assets as it deems necessary to carry out
the purpose of the Trust and facilitate distribution of the Trust Assets;
(ii) protect, conserve and manage the Trust Assets in accordance with the
terms and conditions hereof; and (iii) distribute the Trust Assets in
accordance with the terms and conditions hereof.
-3-
(c) It
is
intended that the granting, assignment and conveyance of the Cash Reserve and
the Retained Assets by the Company to the Trustee pursuant hereto shall be
treated for federal and state income tax purposes as if the Company made such
distributions directly to the holders of Membership Interests. It is further
intended that for federal, state and local income tax purposes the Trust shall
be treated as a liquidating trust under Treasury Regulation Section
301.7701-4(d) and any analogous provision of state or local law, and the
Beneficiaries shall be treated as the owners of their respective share of the
Trust pursuant to Sections 671 through 679 of the Code and any analogous
provision of state or local law and shall be taxed on their respective share
of
the Trust’s taxable income (including both ordinary income and capital gains)
pursuant to Section 671 of the Code and any analogous provision of state or
local law. The Trustee shall file all tax returns required to be filed with
any
governmental agency consistent with this position, including, but not limited
to, any returns required of grantor trusts pursuant to Section 1.671-4(a) of
the
Income Tax Regulations. The Company agrees that a transfer agent acting on
its
behalf may prepare and file applicable K-1’s respecting the Beneficiaries’
Membership income. To the extent that the Trustee becomes liable for the payment
of taxes, including withholding taxes, in respect of income derived from the
investment of funds held hereunder or any payment made hereunder (collectively,
the “Taxes”), the Trustee may pay such Taxes. The Trustee may withhold from any
payment of the Trust Assets such amount as the Trustee estimates to be
sufficient to provide for the payment of such Taxes not yet paid, and may use
the sum withheld for that purpose. The Trustee shall be indemnified and held
harmless against any liability for Taxes and for any penalties or interest
in
respect of Taxes on such investment income or payments in the manner provided
herein.
2.2 Prohibited
Activities.
(a) The
Trust shall not continue or engage in the conduct of any trade or business,
except as necessary for the orderly liquidation of the Trust Assets. The Trust’s
activities will be limited to the holding, collection and sale of the Trust
Assets.
(b) The
Trustee shall not take any action to facilitate or encourage any trading in
the
Beneficial Interests or in any instrument tied to the value of the Beneficial
Interests. Further, the Trustee will require each of its Affiliated Persons
to
refrain from taking any such action.
2.3 No
Reversion to the Company.
In no
event shall any part of the Trust Assets revert to or be distributed to the
Company.
2.4 Payment
of Liabilities.
To the
extent that there are available Trust Assets in the Trust, the Trust hereby
agrees to assume all Liabilities of the Company on the Effective Date. Should
any Liability be asserted against the Trust as the transferee of the Trust
Assets or as a result of the assumption made in this paragraph, the Trustee
may
use such part of the Trust Assets as may be necessary in contesting any such
Liability or in payment thereof. In no event shall the Trustee, Beneficiaries
or
employees or agents of the Trust be personally liable, nor shall resort be
had
to the private property of such Persons or to any other Trust Assets, in the
event the Trust Assets are not sufficient to satisfy the Liabilities asserted
against or payable out of the Company’s available Trust Assets in the
Trust.
-4-
2.5 ▇▇▇▇
of Sale, Assignment, Acceptance and Assumption Agreement; Instruments of Further
Assurance.
On the
Effective Date, the Company and the Trust shall execute a ▇▇▇▇ of Sale,
Assignment, Acceptance and Assumption Agreement conveying the Retained Assets,
Cash Reserve and Liabilities to the Trust, a form of which is attached as
Exhibit A
hereto.
After the dissolution of the Company, such Persons as shall have the right
and
power to so act, will, upon reasonable request of the Trustee, execute,
acknowledge, and deliver such further instruments and do such further acts
as
may be necessary or proper to carry out effectively the purposes of this
Agreement, to confirm or effectuate the transfer to the Trustee of any property
intended to be covered hereby, and to vest in the Trustee, its successors and
assigns, the estate, powers, instruments or funds in trust
hereunder.
2.6 Incidents
of Ownership.
The
holders of Membership Interests as of the Record Date shall be the Initial
Beneficiaries of the Trust as holders of Trust Units in the Trust, and the
Trustee shall retain only such incidents of legal ownership as are necessary
to
undertake the actions and transactions authorized herein.
2.7 Notice
to Unlocated Holders of Membership Interests.
If the
Trust holds Trust Assets for unlocated holders of any Membership Interests,
due
notice shall be given to such holders of Membership Interests in accordance
with
Delaware law.
ARTICLE
III
BENEFICIARIES
3.1 Beneficial
Interests.
(a) The
Beneficial Interest of each Initial Beneficiary hereof shall be determined
by
the Company in accordance with a certified copy of the Company’s list of holders
of Membership Interests as of the Record Date (the “List”). The Company will
deliver the certified copy of the List to the Trustee within a reasonable time
after the Record Date specifying the Beneficial Interests of each Initial
Beneficiary in the Company. For ease of administration, the List shall express
the Beneficial Interest of each Initial Beneficiary in terms of units and it
is
intended that each unit shall represent one Trust Unit in the
Trust.
(b) In
the
case of the holders of Membership Interests, customary institutional book-entry
or other records or any other evidence of ownership satisfactory to the Trustee
will be deemed to evidence the Beneficial Interest in the Trust of each such
Beneficiary.
(c) If
any
conflicting claims or demands are made or asserted with respect to the ownership
of any Trust Units, or if there should be any disagreement between the
transferees, assignees, heirs, representatives or legatees succeeding to all
or
part of the interest of any Beneficiary resulting in adverse claims or demands
being made in connection with such Trust Units, then, in any of such events,
the
Trustee shall be entitled, at its sole election, to refuse to comply with any
such conflicting claims or demands. In so refusing, the Trustee may elect to
make no payment or distribution with respect to such Trust Units, or to make
such payment to a court of competent jurisdiction or an escrow agent, and in
so
doing the Trustee shall not be or become liable to any of such parties for
their
failure or refusal to comply with any of such conflicting claims or demands,
nor
shall the Trustee be liable for interest on any funds which it may so withhold.
The Trustee shall be entitled to refrain and refuse to act until either
(i) the rights of the adverse claimants have been adjudicated by a final
judgment of a court of competent jurisdiction, (ii) all differences have
been adjusted by valid written agreement between all of such parties, and the
Trustee shall have been furnished with an executed counterpart of such
agreement, or (iii) there is furnished to the Trustee a surety bond or
other security satisfactory to the Trustee, as it shall deem appropriate, to
fully indemnify it as between all conflicting claims or demands.
-5-
3.2 Rights
of Beneficiaries.
Each
Beneficiary shall be entitled to participate in the rights and benefits due
to a
Beneficiary hereunder according to his Beneficial Interest. Each Beneficiary
shall take and hold the same subject to all the terms and provisions of this
Agreement. The interest of the Beneficiary hereby is declared and shall be
in
all respects personal property and upon the death of an individual Beneficiary,
his Beneficial Interest shall pass as personal property to his legal
representative and such death shall in no way terminate or affect the validity
of this Agreement, provided that the Trustee shall not be required to evidence
a
book entry transfer of a deceased Beneficiary’s Beneficial Interest to his legal
representative until the Trustee shall have received Letters Testamentary or
Letters of Administration and written notice of the death of the deceased
Beneficiary. A Beneficiary shall have no title to, right to, possession of,
management of, or control of, the Trust Assets except as herein expressly
provided. No widower, widow, heir, or devisee of any person who may be a
Beneficiary shall have any right of dower, homestead, or inheritance, or of
partition, or of any other right, statutory or otherwise, in any property
forming a part of Trust Assets but the whole title to the Trust Assets shall
be
vested in the Trustee and the sole interest of the applicable Beneficiaries
shall be the rights and benefits given to such Persons under this Agreement.
3.3 No
Transfer of Interests of Beneficiaries.
The
Beneficial Interest of a Beneficiary may not be transferred by any Beneficiary
in person or by a duly authorized agent or attorney, or by the properly
appointed legal representatives of the Beneficiary, nor may a Beneficiary have
authority or power to sell, assign, transfer, encumber, or in any other manner
dispose of his Beneficial Interest; provided, however, that the Beneficial
Interest shall be assignable or transferable by will, intestate succession,
or
operation of law.
Except
as
may be otherwise required by law, the Beneficial Interests of the Beneficiaries
hereunder shall not be subject to attachment, execution, sequestration or any
order of a court, nor shall such interests be subject to the contracts, debts,
obligations, engagements or liabilities of any Beneficiary, but the interest
of
a Beneficiary shall be paid by the Trustee to the Beneficiary free and clear
of
all assignments, attachments, anticipations, levies, executions, decrees and
sequestrations and shall become the property of the Beneficiary only when
actually received by such Beneficiary.
-6-
3.4 Trustee
as Beneficiary.
The
Trustee, either individually or in a representative or fiduciary capacity,
may
be a Beneficiary to the same extent as if it were not a Trustee hereunder and
shall have all the rights of a Beneficiary, including, without limitation,
the
right to vote and to receive distributions, to the same extent as if it was
not
the Trustee hereunder.
ARTICLE
IV
DURATION
AND TERMINATION OF TRUST
4.1 Duration.
The
existence of this Trust shall terminate upon the earliest of (i) a
termination required by the applicable laws of the State of Delaware,
(ii) the termination due to the distribution of all Trust Assets as
provided in Section 5.5, or (iii) June 30, 2008; provided, however,
that the Trustee, in its discretion, may extend the existence of this Trust
to
such later date as it may designate, if it determines that an extension is
reasonably necessary to pay or make provision for then known liabilities, actual
or contingent.
4.2 Other
Obligations of the Trustee upon Termination.
Upon
distribution of all the Trust Assets, the Trustee shall provide for the
retention of all necessary books, records, lists of holders of Trust Units
in
the Trust, certificates and files that shall have been delivered to or created
by the Trustee for a period of ten (10) years thereafter, at the Trustee’s
discretion, all of such records and documents may be destroyed. Except as
otherwise specifically provided herein, upon the distribution of all Trust
Assets in the Trust, the Trustee shall have no further duties or obligations
hereunder.
ARTICLE
V
ADMINISTRATION
OF TRUST ASSETS
5.1 Sale
of Trust Assets.
The
Trustee is hereby authorized and directed, at such times as it may deem
appropriate, to transfer, assign, or otherwise dispose of all or any part of
the
Trust Assets in the Trust as it deems appropriate at public auction or at
private sale for cash, securities or other property, or upon credit (either
secured or unsecured as the Trustee shall determine).
5.2 Transactions
with Related Persons.
Notwithstanding any other provisions of this Agreement, the Trustee shall not
knowingly, directly or indirectly, sell or otherwise transfer all or any part
of
any Trust Assets to, or contract with, (i) itself or any other Trustee or
an employee or agent (acting in its or their individual capacities) of this
Trust, or (ii) any Person of which any Trustee, employee or agent of this
Trust is an affiliate by reason of being a trustee, director, officer, partner
or direct or indirect beneficial owner of 5% or more of the outstanding capital
stock, shares or other equity interest of such Persons (each of the persons
referred to in (i) and (ii) above, a “Related Person”). Notwithstanding the
foregoing, in any circumstance where an asset or a direct or indirect interest
in an asset is jointly-owned by a Related Person and the Company on the date
hereof and such asset or the Company’s interest in such asset becomes a Trust
Asset, the Trustee may sell or otherwise transfer such Trust Asset to such
Related Person pursuant to any contractual arrangement with such Related Person,
or (ii) a pre-existing contractual arrangement exists with a Related Person
on
the date hereof, such contractual obligation shall continue to be in full force
and effect until terminated, and the Trustee may amend, modify or revoke such
arrangements in its discretion.
5.3 Payment
of Claims, Expenses and Liabilities.
Provided the Trustee has been advised in writing respecting such claims,
expenses, charges, liabilities and obligations, the Trustee shall pay from
the
Trust Assets in the Trust all claims, expenses, charges, liabilities, and
obligations of the Trust Assets and all Liabilities relating to the Trust Assets
and obligations which the Trustee specifically assumes and agrees to pay
pursuant to this Agreement and such transferee liabilities which the Trustee
may
be obligated to pay as transferees of the Trust Assets in the Trust, including
among the foregoing, and without limiting the generality of the foregoing,
interest, penalties, taxes, assessments, and public charges of every kind and
nature and the costs, charges, and expenses connected with or growing out of
the
execution or administration of this Trust and such other payments and
disbursements as are provided in this Agreement or which may be determined
to be
a proper charge against the Trust Assets in the Trust by the
Trustee.
-7-
5.4 Interim
Distributions.
At such
times as may be determined by it in its sole discretion, the Trustee shall
distribute, or cause to be distributed, to the Beneficiaries, in proportion
to
the number of Trust Units held by each Beneficiary relating to the Trust, such
cash or other property comprising a portion of the Trust Assets as the Trustee
may in its sole discretion determine may be distributed without detriment to
the
conservation and protection of the Trust Assets in the Trust.
5.5 Final
Distribution.
If the
Trustee determines that the Liabilities and all other claims, expenses, charges,
liabilities and obligations of the Trust have been paid or discharged, or if
the
existence of the Trust shall terminate pursuant to Section 4.1, the Trustee
shall, as expeditiously as is consistent with the conservation and protection
of
the Trust Assets, distribute the Trust Assets to the Beneficiaries in proportion
to the number of Trust Units held by each Beneficiary in the Trust based on
the
list submitted to the Trustee by the Company pursuant to Section 3.1 above,
as
such list may be amended. The Trustee shall hold in the Trust and thereafter
make disposition of all liquidating distributions and other payments due any
Beneficiaries who have not been located, in accordance with Delaware law,
subject to applicable state laws regarding escheat and abandoned property.
It is
understood that the Trustee and the Beneficiary’s bank in any funds transfer may
rely solely upon any account numbers or similar identifying number provided
by
the parties hereto to identify (i) the Beneficiary, (ii) the Beneficiary’s bank,
or (iii) an intermediary bank. The Trustee may apply any of the Trust Assets
for
any payment order it executes using any such identifying number, even where
its
use may result in a person other than the Beneficiary being paid, or the
transfer of funds to a bank other than the Beneficiary’s bank, or an
intermediary bank designated.
5.6 Reports
to Beneficiaries and Others.
As soon
as practicable after the end of each taxable year of the Trust and after
termination of the Trust, the Trustee shall submit a written report and account
to the Beneficiaries showing (i) the assets and liabilities of the Trust at
the end of such taxable year or upon termination and the receipts and
disbursements of the Trustee for such taxable year or period, (ii) any
changes in the Trust Assets which they have not previously reported, and
(iii) any action taken by the Trustee in the performance of its duties
under this Agreement which it has not previously reported and which, in its
opinion, materially affects the Trust Assets. The Trustee may submit similar
reports for such interim periods during the taxable year as it deems advisable
or as may be required by the Securities and Exchange Commission. The taxable
year of the Trust shall end on December 31 of each year unless the Trustee
deems it advisable to establish some other date as the date on which the taxable
year of the Trust shall end.
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5.7 Federal
Income Tax Information.
As soon
as practicable after the close of each taxable year, the Trustee shall direct
its transfer agent to mail to each Person who was a Beneficiary at the close
of
the year, a statement showing on a Trust Unit basis in the Trust the dates
and
amounts of all distributions made by the Trustee, if any, income earned on
assets held by the Trust, if any, such other information as is reasonably
available to the Trustee which the Trustee determines may be helpful in
determining the amount of gross income and expenses attributable to the Trust
that such Beneficiary should include in such Person’s federal income tax return
for the preceding year and any other information as may be required to be
furnished under the tax laws. In addition, after receipt of a written request
in
good faith, or in its discretion without such request or if required by
applicable law, such transfer agent (or if it cannot, the Trustee) shall furnish
to any Person who has been a Beneficiary at any time during the preceding year
a
statement containing such further information as is reasonably available to
the
transfer agent or Trustee, respectively, which shall be helpful in determining
the amount of taxable income which such Person should include in such Person’s
federal income tax return.
5.8 Employment
of Manager.
(a) The
Trustee shall be responsible for the general policies of the Trust and for
the
general supervision of the activities of the Trust conducted by all agents,
employees, advisors or managers of the Trust. However, the Trustee is not and
shall not be required personally to conduct the activities of the Trust, and
consistent with its ultimate responsibility as stated above, the Trustee shall
have the power to appoint, employ or contract with any Person or Persons
(including any corporation, company, or trust in which one or more of them
may
be directors, officers, shareholders, partners or trustees) as the Trustee
may
deem necessary or proper for the transaction of the activities of the Trust. The
Trustee may therefore employ or contract with such Person or Persons (herein
referred to as the “Manager”) and may grant or delegate such authority to the
Manager as the Trustee may in its sole discretion deem necessary or desirable
to
carry out the purpose of the Trust without regard to whether such authority
is
normally granted or delegated by trustees.
The
Trustee shall have the power to determine the terms and compensation of the
Manager or any other Person whom they may employ or with whom they may contract.
The Trustee may exercise broad discretion in allowing the Manager to administer
and regulate the operations of the Trust, to act as agent for the Trust, to
execute documents on behalf of the Trustee, and to make executive decisions
which conform to general policies and general principles previously established
by the Trustee.
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(b) The
Manager or other Persons shall not be required to administer the Trust as its
sole and exclusive function and may have other business interests and may engage
in other activities similar or in addition to those relating to the Trust,
including the rendering of advice or services of any kind to investors or any
other Persons and the management of other investments.
ARTICLE
VI
POWERS
OF
AND LIMITATIONS ON THE TRUSTEE
6.1 Limitations
on Trustee.
Except
as contemplated by this Agreement, the Trustee shall not at any time, on behalf
of the Trust or the Beneficiaries, enter into or engage in any trade or
business, and no part of any Trust Assets shall be used or disposed of by the
Trustee in furtherance of any trade or business. Except as the Trustee
reasonably believes is consistent with and in furtherance of its obligations
under this Agreement, the Trustee shall be restricted to the holding, collection
and sale of the Trust Assets and the payment and distribution thereof for the
purposes set forth in this Agreement and to the conservation and protection
of
the Trust Assets and the administration thereof in accordance with the
provisions of this Agreement. In no event shall the Trustee receive any
property, make any distribution, satisfy or discharge any claims, expenses,
charges, liabilities and obligations or otherwise take any action which is
inconsistent with a complete liquidation of the Company within the meaning
of
the Internal Revenue Code of 1986, as amended, Treasury Regulations promulgated
thereunder, and rulings, decisions and determinations of the Internal Revenue
Service and courts of competent jurisdiction, or take any action which would
jeopardize the status of the Trust as a “liquidating trust” for federal income
tax purposes within the meaning of Treasury Regulation Section 301.7701-4(d).
This limitation shall apply regardless of whether the conduct of any such trade
or business is deemed by the Trustee to be necessary or proper for the
conservation and protection of the Trust Assets. The Trustee shall not invest
any of the cash held as Trust Assets, except that the Trustee may invest in
(i) direct obligations of the United States of America or obligations of
any agency or instrumentality thereof which mature not later than one year
from
the date of acquisition thereof; (ii) money market deposit accounts,
checking accounts, savings accounts, or certificates of deposit, commercial
paper rated not less than A1P1, or other time deposit accounts which mature
not
later than one year from the date of acquisition thereof which are issued by
a
commercial bank, brokerage firm or savings institution organized under the
laws
of the United States of America or any state thereof; or (iii) other
temporary investments not inconsistent with the Trust’s status as a liquidating
trust for tax purposes (collectively, “Permitted Investments”). It is hereby
acknowledged that the Trustee shall not be required to maximize the investment
return on the Trust Assets during the term of this Agreement. The Trustee shall
be and hereby is relieved of all liability with respect to the purchasing,
holding or selling of Permitted Investments in accordance with the terms hereof.
The Trustee is not responsible for any losses to the Trust which may occur,
including, without limitation, by reason of bank failure or the amount of the
Trust exceeding the Federal Deposit Insurance Corporation limits.
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6.2 Specific
Powers of the Trustee.
Subject
to the provisions of Section 6.1, the Trustee shall have the following specific
powers in addition to any powers conferred upon them by any other Section or
provision of this Agreement or any statutory laws of the State of Delaware;
provided, however, that the enumeration of the following powers shall not be
considered in any way to limit or control the power of the Trustee to act as
specifically authorized by any other Section or provision of this Agreement
and
to act in such a manner as the Trustee may deem necessary or appropriate to
conserve and protect any Trust Assets or to confer on the Beneficiaries the
benefits intended to be conferred upon them by this Agreement:
(a) To
determine the nature and amount of the consideration to be received with respect
to the sale or other disposition of, or the grant of interests in, any Trust
Assets.
(b) To
collect, liquidate or otherwise convert into cash, or such other property as
the
Trustee deems appropriate, all property, assets and rights in any Trust Assets,
and to pay, discharge and satisfy all other claims, expenses, charges,
liabilities, and obligations existing with respect to any Trust Assets, the
Trust or the Trustee.
(c) To
elect,
appoint, engage, retain or employ any Persons as agents, representatives,
employees, or independent contractors (including without limitation real estate
advisors, investment advisors, accountants, transfer agents, custodians,
attorneys-at-law, managers, appraisers, brokers, or otherwise) in one or more
capacities, and to pay compensation from the Trust Assets for services in as
many capacities as such Person may be so elected, appointed, engaged, retained
or employed, to prescribe the titles, powers and duties, terms of service and
other terms and conditions of the election, appointment, engagement, retention
or employment of such Persons and, except as prohibited by law, to delegate
any
of the powers and duties of the Trustee to any one or more Trustees, agents,
representatives, employers, independent contractors or other
Persons.
(d) To
retain
and set aside such funds out of the Trust as the Trustee shall deem necessary
or
expedient to pay, or provide for the payment of (i) unpaid claims,
expenses, charges, liabilities, and obligations of the Trust or the Company,
except to the extent that liabilities for which the Company has previously
reserved Cash Reserve are satisfied with funds from said Cash Reserve;
(ii) contingencies; and (iii) the expenses of administering the Trust
Assets.
(e) To
do and
perform any and all acts necessary or appropriate for the conservation and
protection of the Trust Assets, including acts or things necessary or
appropriate to maintain Trust Assets held by the Trustee pending sale or other
disposition thereof or distribution thereof to the Beneficiaries.
(f) To
hold
legal title to property of the Trust in the name of the Trust, or in the name
of
the Trustee, or of any other Person, without disclosure of the interest of
the
Trust therein.
(g) To
cause
any investments of any part of the Trust Assets to be registered and held in
the
name of any one or more of its names or in the names of a nominee or nominees
without increase or decrease of liability with respect thereto.
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(h) To
institute or defend actions or declaratory judgments or other actions and to
take such other action, in the name of the Trust or the Company or as otherwise
required, as the Trustee may deem necessary or desirable to enforce any
instruments, contracts, agreements, causes of action, claims or rights relating
to or forming a part of the Trust Assets.
(i) To
determine conclusively from time to time the value of and to revalue the
securities and other property of the Trust, in accordance with independent
appraisals or other information as it deems necessary or
appropriate.
(j) To
cancel, terminate, or amend any instruments, contracts, agreements, obligations
or causes of action relating to or forming a part of any Trust Assets, and
to
execute new instruments, contracts, agreements, obligations or causes of action
notwithstanding that the terms of any such instruments, contracts, agreements,
obligations or causes of action may extend beyond the terms of this Trust,
provided that no such new instrument, contract, agreement, obligation or cause
of action shall permit the Trustee to engage in any activity prohibited by
Section 6.1.
(k) To
vote
by proxy or otherwise on behalf of the Beneficiaries and with full power of
substitution all shares of stock and all securities held by the Trustee
hereunder and to exercise every power, election, discretion, option and
subscription right and give every notice, make every demand, and to do every
act
or thing in respect to any shares of stock or any securities held by the Trustee
which the Trustee might or could do if the Trustee was the absolute owner
thereof.
(l) To
undertake or join in any merger, plan of reorganization, consolidation,
liquidation, dissolution, readjustment or other transaction of any corporation,
any of whose shares of stock or other securities, obligations, or properties
may
at any time constitute a part of any Trust Assets, and to accept the substituted
shares of stock, bonds, securities, obligations and properties and to hold
the
same in trust in accordance with the provisions hereof.
(m) In
connection with the sale or other disposition or distribution of any securities
held by the Trustee, to comply with the applicable federal and state securities
laws, and to enter into agreements relating to the sale or other disposition
or
distribution thereof.
(n) To
authorize transactions between corporations or other entities whose securities,
or other interests therein (either in the nature of debt or equity) are held
by
the Trustee as part of any Trust Assets.
(o) To
terminate and dissolve any entities owned by the Trust.
(p) To
have a
judicial settlement of its account of the Trust at any time to the extent it
determines necessary or advisable.
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(q) To
perform any act authorized, permitted, or required under any instrument,
contract, agreement, right, obligation or cause of action relating to or forming
a part of any Trust Assets whether in the nature of an approval, consent, demand
or notice thereunder or otherwise, unless such act would require the consent
of
the Beneficiaries in accordance with the express provisions of this
Agreement.
ARTICLE
VII
CONCERNING
THE TRUSTEE,
BENEFICIARIES,
EMPLOYEES AND AGENTS
7.1 Generally.
The
Trustee accepts and undertakes to discharge the Trust created by this Agreement,
upon the terms and conditions thereof on behalf of the Beneficiaries. The
Trustee shall exercise such of the rights and powers vested in it by this
Agreement, and use the same degree of care and skill in its exercise as a
prudent man would exercise or use under the circumstances in the conduct of
his
own affairs. No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own willful misconduct, knowingly and
intentionally committed in bad faith, except that:
(a) No
successor Trustee shall be in any way responsible for the acts or omissions
of
the Trustee in office prior to the date on which he or it becomes a
Trustee.
(b) The
Trustee shall not be liable for the performance of such duties and obligations
as are specifically set forth in this Agreement except for its bad faith or
willful misconduct, and no implied covenants or obligations shall be read into
this Agreement against the Trustee.
(c) The
Trustee may conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee and conforming to the requirements of this
Agreement.
(d) The
Trustee shall not be liable for any act which the Trustee may do or omit to
do
hereunder, or for any mistake of fact or law, or for any error of judgment,
or
for the misconduct of any employee, agent, representative or attorney appointed
by it, or for anything that it may do or refrain from doing in connection with
this Agreement while acting in good faith; unless caused by or arising from
gross negligence, willful misconduct, fraud or any other breach of fiduciary
duty of the Trustee or any of its employees, agents, representatives or
attorneys.
(e) The
duties and obligations of the Trustee shall be limited to and determined solely
by the express provisions of this Agreement, and no implied duties or
obligations shall be read into this Agreement against the Trustee.
7.2 Reliance
by Trustee.
Except
as otherwise provided in Section 7.1:
(a) The
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 it to be genuine and to have
been
signed or presented by the proper party or parties.
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(b) The
Trustee may consult with legal counsel, auditors or other experts to be selected
by it, including firms with which the Trustee may be an affiliate, and the
advice or opinion of such counsel, accountants, auditors or other experts shall
be full and complete protection to the Trustee, the employees and the agents
of
the Trustee in respect of any action taken or omitted or suffered by them in
good faith and in reliance on, or in accordance with, such advice or opinion.
(c) Persons
dealing with the Trustee shall look only to the Trust Assets to satisfy any
liability relating to the Trust Assets incurred by the Trustee to such Person
in
carrying out the terms of this Trust, and the Trustee shall have no obligation
to satisfy any such liability.
(d) As
far as
practicable and except as expressly permitted above, the Trustee shall cause
any
written instrument creating an obligation of the Trust to include a reference
to
this Agreement and to provide that neither the Beneficiaries, the Trustee nor
their agents shall be liable thereunder and that the other parties to such
instrument shall look solely to the Trust Assets for the payment of any claim
thereunder or the performance thereof; provided, however, that the omission
of
such provision from any such instrument shall not render the Beneficiaries,
the
Trustee, or their agents liable, nor shall the Trustee be liable to anyone
for
such omission.
7.3 Limitation
on Liability to Third Persons.
No
Beneficiary shall be subject to any personal liability whatsoever, in tort,
contract or otherwise, to any Person in connection with the Trust Assets or
the
affairs of this Trust; and neither the Trustee nor any employee or agent of
this
Trust shall be subject to any personal liability whatsoever, in tort, contract
or otherwise, to any Person in connection with any Trust Assets or the affairs
of this Trust, except for such Person’s own willful misconduct, knowingly and
intentionally committed in bad faith; and all such other Persons shall look
solely to any Trust Assets for satisfaction of claims of any nature arising
in
connection with the affairs of this Trust. The Trustee shall, at all times,
maintain insurance for the protection of all Trust Assets, its Beneficiaries,
the Trustee and its employees and agents in such amount as the Trustee shall
deem adequate to cover all foreseeable liability to the extent available at
reasonable rates.
7.4 Recitals.
Any
written instrument creating an obligation of this Trust shall be conclusively
taken to have been executed or done by the Trustee, or the employee or agent
of
this Trust only in its capacity as Trustee under this Agreement or in his
capacity as employee or agent of the Trust.
7.5 Indemnification.
The
Trustee and each of its employees and agents (each an “Indemnified Person” and
collectively, the “Indemnified Persons”) shall be indemnified out of all Trust
Assets against all liabilities and expenses, including amounts paid in
satisfaction of judgments, in compromise or as fines and penalties, and all
costs and expenses, including, but not limited to, reasonable counsel fees
and
disbursements paid or incurred in investigating or defending against any such
claim, demand, action, suit or proceeding by the Indemnified Persons in
connection with the defense or disposition of any action,
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suit
or
other proceeding by the Trust or any other Person, whether civil or criminal,
in
which the Indemnified Person may be involved or with which the Indemnified
Person may be threatened while in office or thereafter, by reason of its
or his
being or having been such a Trustee, employee or agent; provided, however,
that
the Indemnified Person shall not be entitled to such indemnification in respect
of any matter as to which the Indemnified Person shall have been adjudicated
to
have acted in bad faith or with willful misfeasance or in reckless disregard
of
the Indemnified Person’s duties. The rights accruing to any Indemnified Person
under these provisions shall not exclude any other right to which the
Indemnified Person may be lawfully entitled. The Trustee may make advance
payments in connection with indemnification under this Section, provided
that
the Indemnified Person shall have given a written undertaking to repay any
amount advanced to the Indemnified Person and to reimburse the Trust in the
event it is subsequently determined in a final adjudication by a court of
law
that the Indemnified Person is not entitled to such indemnification. The
Trustee
may purchase such insurance as it believes, in the exercise of its discretion,
adequately insures that each Indemnified Person shall be indemnified against
any
such loss, liability or damage pursuant to this Section. The rights accruing
to
any Indemnified Person by reason of the foregoing shall not be deemed to
exclude
any other right to which he may legally be entitled nor shall anything else
contained herein restrict the right of the Trustee to indemnify or reimburse
such Indemnified Person in any proper case even though not specifically provided
for herein, nor shall anything contained herein restrict the right of any
such
Indemnified Person to contribution under applicable law. As security for
the
timely and full payment and satisfaction of all of the present and future
obligations of the parties to the Trustee under this Agreement, including
without limitation the indemnity obligations hereunder, whether joint or
several, the Trust (and by accepting distributions hereunder, each Beneficiary)
hereby grants to the Trustee a continuing security interest in and to any
and
all of the Trust Assets, whether now existing or hereafter acquired or created,
together with the products and proceeds thereof, all payments and other
distributions with respect thereto, and any and all investments, renewals,
substitutions, modifications and extensions of any and all of the foregoing.
The
Trustee shall have all of the rights and remedies of a secured party under
the
Uniform Commercial Code. In addition, in the event the Trustee has not received
any payment, indemnity, reimbursement or other amount due it under this
Agreement, then, notwithstanding any other term or provision of this Agreement,
the Trustee may in its discretion set off and apply any of the Trust Assets
as
is required to pay and satisfy those obligations. Promptly after the receipt
by
the Trustee of notice of any demand or claim or the commencement of any action,
suit or proceeding, the Trustee shall, if a claim in respect thereof is to
be
made against any of the other parties hereto, notify such other parties thereof
in writing; but the failure by the Trustee to give such notice shall not
relieve
any party from any liability which such party may have to the Trustee hereunder.
Notwithstanding any obligation to make payments and deliveries hereunder,
the
Trustee may retain and hold for such time as it reasonably deems necessary
such
amount of the Trust Assets as it shall from time to time in its sole discretion
reasonably deem sufficient to indemnify itself for any such loss or expense
and
for any amounts due it hereunder. Except as required by law or as expressly
provided herein, the Trustee shall be under no duty to institute any suit,
or to
take any remedial procedures under this Agreement, or to enter any appearance
or
in any way defend any suit in which it may be made a defendant hereunder
until
it shall be indemnified as provided above, except as expressly set forth
herein.
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7.6 Rights
of Trustees, Employees, Independent Contractors and Agents to Own Trust Units
or
Other Property and to Engage in Other Business.
Any
Trustee, employee, independent contractor or agent may own, hold and dispose
of
Trust Units for its or his individual account, and may exercise all rights
thereof and thereunder to the same extent and in the same manner as if it were
not a Trustee, employee, independent contractor or agent. Any Trustee, employee,
independent contractor or agent may, in his personal capacity or in a capacity
of trustee, officer, director, shareholder, partner, member, advisor, employee
of any Person or otherwise, have business interests and holdings similar to
or
in addition to those relating to the Trust. Subject to the provisions of Article
V hereof, any Trustee, employee, independent contractor or agent of the Trust
may be a trustee, officer, director, shareholder, partner, member, advisor,
employee or independent contractor of, or otherwise have a direct or indirect
interest in, any Person who may be engaged to render advice or services to
the
Trust, and may receive compensation from such Person as well as compensation
as
Trustee, employee, independent contractor or agent or otherwise hereunder so
long as such interest is disclosed to the Trustee. None of these activities
in
and of themselves shall be deemed to conflict with its duties as Trustee,
employee, independent contractor or agent.
7.7 Contribution
Back. In
the
event any amount of Trust Assets released to a party under this Agreement is
invalidated, declared to be fraudulent or preferential or must otherwise be
restored or returned by the Trustee in connection with the insolvency,
bankruptcy or reorganization of such party, whether by order of or settlement
before any court or other authority or otherwise, such party shall contribute
back to the Trust an amount such that such party will be affected by that
invalidation, declaration, restoration or return ratably in proportion to the
distributions it received under this Agreement, together with any related
assignment, release or other instrument or document the Trustee may request
to
restore the status quo
ante.
ARTICLE
VIII
PROTECTION
OF PERSONS DEALING WITH THE TRUSTEE
8.1 Action
by Trustee.
All
action required or permitted to be taken by the Trustee, in its capacity as
Trustee, shall be taken by a written vote, resolution, or other writing signed
by the Trustee then serving.
8.2 Reliance
on Statements by the Trustee.
Any
Person dealing with the Trustee shall be fully protected in relying upon the
Trustee’s certificate or instrument signed by the Trustee that it has authority
to take any action under this Trust.
ARTICLE
IX
COMPENSATION
OF TRUSTEE
9.1 Amount
of Compensation.
The
compensation of the Trustee shall be in accordance with the terms specified
on
Schedule A
hereto
or upon such other terms and conditions as may be agreed upon by the Trustee
and
the Beneficiaries holding Trust Units representing at least a majority of the
aggregate Beneficial Interests. Schedule A
shall
apply only to the initial Trustee and, in the event a successor to the initial
Trustee shall serve, such schedule shall be deleted from this Agreement and
neither such deletion nor the substitution of a counterpart schedule applicable
to the successor Trustee shall constitute an amendment of this
Agreement.
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9.2 Dates
and Timing of Payment.
The
compensation payable to the Trustee pursuant to the provisions of Section 9.1
shall be in accordance with Schedule A
or, if
Schedule A
is no
longer in force, at such other times as the Trustee may determine.
9.3 Expenses.
The
Trustee shall be reimbursed from the Trust Assets for all expenses reasonably
incurred by it in the performance of its duties in accordance with this
Agreement including the reasonable compensation and out-of-pocket expenses
of
attorneys, accountants, appraisers, consultants and other persons retained
by
the Trustee or the Manager pursuant to the terms of this Agreement.
ARTICLE
X
THE
TRUSTEE AND SUCCESSOR TRUSTEE
10.1 Number
and Qualification of Trustees.
Subject
to the provisions of Section 10.3 relating to the period pending the appointment
of a successor Trustee, there shall be one Trustee of this Trust, which shall
be
a citizen and resident of or a corporation or other entity which is incorporated
or formed under the laws of a state of the United States and, if a corporation,
it shall be authorized to act as a corporate fiduciary under the laws of the
State of Delaware. The number of Trustees may be increased or decreased from
time to time by the Trustee.
If
any
corporate Trustee shall ever change its name, or shall reorganize or
reincorporate, or shall merge with or into or consolidate with any other
corporation or entity, bank or trust company, such corporate Trustee shall
be
deemed to be a continuing entity and shall continue to act as a Trustee
hereunder with the same liabilities, duties, powers, titles, discretions and
privileges as are herein specified for a Trustee.
10.2 Resignation
and Removal.
Any
Trustee may resign and be discharged from the Trust hereby created by giving
written notice thereof to any remaining Trustee or Trustees or by giving written
notice to the Beneficiaries holding Beneficial Interests representing an
aggregate of at least a majority of the total Beneficial Interests. Such
resignation shall become effective on the day specified in such notice or upon
the appointment of such Trustee’s successor and such successor’s acceptance of
such appointment, whichever is earlier. Any Trustee may be removed at any time,
with or without cause, by Beneficiaries having an aggregate Beneficial Interest
of at least a majority of the total Beneficial Interests in the Trust. All
obligations of the Trustee hereunder shall cease and terminate on the effective
date of its resignation and its sole responsibility thereafter shall be to
hold
the Trust Assets for a period of thirty (30) calendar days following the
effective date of resignation, at which time, if a successor Trustee shall
have
been appointed and have accepted such appointment in a writing to the
Beneficiaries, then upon written notice thereof given by a representative of
the
Beneficiaries to the resigning Trustee, the
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resigning
Trustee shall deliver the Trust Assets to the successor Trustee. If a successor
Trustee shall not have been appointed within a thirty (30) day period from
the
predecessor Trustee’s resignation, for any reason whatsoever, the resigning
Trustee shall deliver the Trust Assets to a court of competent jurisdiction
in
the county in which the Trust Assets are there being held and give written
notice of the same to the parties hereto.
The
resigning Trustee shall be entitled to payment of any unpaid fees (which shall
be pro-rated as of the effective date of the resignation) and expenses and
to
reimbursement by the Beneficiaries out of the Trust Assets for any expenses
incurred in connection with the transfer of the Trust Assets pursuant to and
in
accordance with the provisions of this section.
10.3 Appointment
of Successor.
Should
at any time a Trustee resign or be removed, die, become mentally incompetent
or
incapable of action (as determined by the Beneficiaries holding Trust Units
representing an aggregate of at least a majority of the total Beneficial
Interests in the Trust), or be adjudged bankrupt or insolvent, unless any
remaining Trustees shall decrease the number of Trustees of the Trust pursuant
to Section 10.1 hereof, a vacancy shall be deemed to exist and a successor
shall
be appointed by any remaining Trustees. If such a vacancy is not filled by
any
remaining Trustees within ninety (90) days, the remaining Trustees must notify
the Beneficiaries of their inability to fill such vacancy, and the Beneficiaries
may, pursuant to Article XII hereof, call a meeting to appoint a successor
Trustee by Beneficiaries holding Trust Units representing an aggregate of at
least a majority of the total Beneficial Interests in the Trust. Pending the
appointment of a successor Trustee, the remaining Trustee or Trustees then
serving may take any action in the manner set forth in Section 8.1.
10.4 Acceptance
of Appointment by Successor Trustee.
Any
successor Trustee appointed hereunder shall execute an instrument accepting
such
appointment hereunder and shall deliver one counterpart thereof to each of
the
other Trustees and, in case of a resignation, to the resigning Trustee.
Thereupon such successor Trustee shall, without any further act, become vested
with all the estates, properties, rights, powers, trusts and duties of his
or
its predecessor in the Trust hereunder with like effect as if originally named
therein; but the resigning Trustee shall nevertheless, when requested in writing
by the successor Trustee or by the remaining Trustees, execute and deliver
an
instrument or instruments conveying and transferring to such successor Trustee
upon the trust herein expressed, all the estates, properties, rights, powers
and
trusts of such resigning Trustee, and shall duly assign, transfer and deliver
to
such successor Trustee all property and money held by it hereunder.
10.5 Bonds.
No bond
shall be required of the original Trustee hereunder, and no bond shall be
required of any successor Trustee hereunder. If a bond is required by law,
no
surety or security with respect to such bond shall be required unless required
by law.
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ARTICLE
XI
CONCERNING
THE BENEFICIARIES
11.1 Evidence
of Action by Beneficiaries.
Whenever in this Agreement it is provided that the Beneficiaries may take any
action (including the making of any demand or request, the giving of any notice,
consent, or waiver, the removal of a Trustee, the appointment of a successor
Trustee, or the taking of any other action), the fact that at the time of taking
any such action such Beneficiaries have joined therein may be evidenced
(i) by any instrument or any number of instruments of similar tenor
executed by Beneficiaries in person or by agent or attorney appointed in
writing, or (ii) by the record of the Beneficiaries voting in favor thereof
at any meeting of Beneficiaries duly called and held in accordance with the
provisions of Article XII.
11.2 Limitation
on Suits by Beneficiaries.
No
Beneficiary shall have any right by virtue of any provision of this Agreement
to
institute any action or proceeding at law or in equity against any party other
than the Trustees upon or under or with respect to any Trust Assets or the
agreements relating to or forming part of any Trust Assets, and the
Beneficiaries do hereby waive any such right.
11.3 Requirement
of Undertaking.
The
Trustee may request any court to require, and any court may in its discretion
require, in any suit for the enforcement of any right or remedy under this
Agreement, or in any suit against the Trustee for any action taken or omitted
by
it as Trustee, the filing by any party litigant in such suit of an undertaking
to pay the costs of such suit, and such court may in its discretion assess
reasonable costs, including reasonable attorneys’ fees, against any party
litigant in such suit, having due regard to the merits and good faith of the
claims or defenses made by such party litigant; provided, however, that the
provisions of this Section shall not apply to any suit by the
Trustee.
ARTICLE
XII
MEETING
OF BENEFICIARIES
12.1 Purpose
of Meetings.
A
meeting of the Beneficiaries may be called at any time and from time to time
pursuant to the provisions of this Article for the purposes of taking any action
which the terms of this Agreement permit a Beneficiary having a specified
aggregate Beneficial Interest to take either acting alone or with the
Trustee.
12.2 Meeting
Called by Trustee.
The
Trustee may at any time call a meeting of the Beneficiaries of the Trust to
be
held at such time and at such place within the State of Delaware (or elsewhere
if so determined by a majority of the Trustees) as the Trustee shall determine.
Written notice of every meeting of the Beneficiaries shall be given by the
Trustee (except as provided in Section 12.3), which written notice will set
forth the time and place of such meeting and in general terms the action
proposed to be taken at such meeting, and shall be mailed not more than sixty
(60) nor less than ten (10) days before such meeting is to be held to all of
the
Beneficiaries of record not more than sixty (60) days before the date of such
meeting. The notice shall be directed to the Beneficiaries at their respective
addresses as they appear in the records of the Trust.
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12.3 Meeting
Called on Request of Beneficiaries.
Within
thirty (30) days after written request to the Trustee by Beneficiaries holding
Trust Units representing at least a majority of the aggregate Beneficial
Interests to call a meeting of all of the Beneficiaries, which written request
shall specify in reasonable detail the action proposed to be taken, the Trustee
shall proceed under the provisions of Section 12.2 to call a meeting of the
Beneficiaries, and if the Trustee fails to call such meeting within such thirty
(30) day period then such meeting may be called by Beneficiaries holding Trust
Units representing at least a majority of the aggregate Beneficial
Interests.
12.4 Persons
Entitled to Vote at Meeting of Beneficiaries.
Each
Beneficiary shall be entitled to vote at a meeting of the Beneficiaries of
the
Trust either in person or by his proxy duly authorized in writing. The vote
of
each Beneficiary shall be weighted based on the number of Trust Units in the
Trust held by each Beneficiary determined pursuant to the list described in
Section 3.1, as such list is amended hereby. The signature of the Beneficiary
on
such written authorization need not be witnessed or notarized.
12.5 Quorum.
At any
meeting of Beneficiaries, the presence of Beneficiaries holding Trust Units
representing at least a majority of the aggregate Beneficial Interests
sufficient to take action on any matter for the transaction of which such
meeting was called shall be necessary to constitute a quorum; but if less than
a
quorum be present, Beneficiaries having aggregate Beneficial Interests of more
than 50% of the total Beneficial Interests in the Trust of all Beneficiaries
represented at the meeting may adjourn such meeting with the same effect and
for
all intents and purposes as though a quorum had been present.
12.6 Adjournment
of Meeting.
Subject
to Section 12.5 hereof, any meeting of Beneficiaries of the Trust may be
adjourned from time to time and a meeting may be held at such adjourned time
and
place without further notice.
12.7 Conduct
of Meetings.
The
Trustee shall appoint the Chairman and the Secretary of the meeting. The vote
upon any proposal submitted to any meeting of Beneficiaries shall be by written
ballot. An Inspector of Votes, appointed by the Chairman of the meeting, shall
count all votes cast at the meeting for or against any proposal and shall make
and file with the Secretary of the meeting its verified written
report.
12.8 Record
of Meeting.
A
record of the proceedings of each meeting of Beneficiaries of the Trust shall
be
prepared by the Secretary of the meeting. The record shall be signed and
verified by the Secretary of the meeting and shall be delivered to the Trustee
to be preserved by it. Any record so signed and verified shall be conclusive
evidence of all the matters therein stated.
ARTICLE
XIII
AMENDMENTS
13.1 Consent
of Beneficiaries.
At the
direction or with the consent of Beneficiaries holding Trust Units representing
at least a majority of the aggregate Beneficial Interests, or such greater
percentage as shall be specified in this Agreement for the taking of an action
by the Beneficiaries under the affected provision of this Agreement, the Trustee
shall promptly make and execute a declaration amending this
-20-
Agreement
for the purpose of adding any material provisions to or changing in any material
manner or eliminating any of the material provisions of this Agreement or
amendments thereto as they apply to the Trust; provided, however, that no
such
amendment shall permit the Trustee to engage in any activity prohibited by
Section 6.1 hereof or affect the Beneficiaries’ rights to receive their
pro
rata
shares
of the Trust Assets at the time of distribution; provided further, however,
that
no consent of the Beneficiaries shall be required with respect to any amendment
made solely for the purpose of facilitating the transferability by Beneficiaries
of Trust Units or to comply with applicable laws, including tax laws, so
long as
such amendment has been approved by the Trustee. Further, the Trustee may
amend
this Trust Agreement as it deems reasonably necessary for the purpose of
(i) obtaining no-action letter or similar relief from the Securities and
Exchange Commission; and/or (ii) making changes to this Agreement that do
not adversely affect the rights of the Beneficiaries.
13.2 Notice
and Effect of Amendment.
Promptly after the execution by the Trustee of any such declaration of
amendment, the Trustee shall give notice of the substance of such amendment
to
the Beneficiaries or, in lieu thereof, the Trustee may send a copy of the
amendment to each Beneficiary. Upon the execution of any such declaration of
amendment by the Trustee, this Agreement shall be deemed to be modified and
amended in accordance therewith and the respective rights, limitations of
rights, obligations, duties, and immunities of the Trustee and the Beneficiaries
under this Agreement with respect to the Trust shall thereafter be determined,
exercised and enforced hereunder subject in all respects to such modification
and amendments, and all the terms and conditions of any such amendment shall
be
thereby deemed to be part of the terms and conditions of this Agreement for
any
and all purposes.
13.3 Trustee’s
Declining to Execute Documents.
If, in
the reasonable opinion of the Trustee, any document required to be executed
pursuant to the terms of Section 13.2 hereof adversely affects any right,
obligation, immunity or indemnity in favor of the Trustee under this Agreement,
the Trustee may in its discretion decline to execute such document.
ARTICLE
XIV
MISCELLANEOUS
PROVISIONS
14.1 Filing
Documents.
This
Agreement shall be filed or recorded in such office or offices as the Trustee
may determine to be necessary or desirable. A copy of this Agreement and all
amendments thereof shall be maintained in the office of the Trustee and shall
be
available at all times during regular business hours for inspection by any
Beneficiary or his duly authorized representative. The Trustee shall file or
record any amendment of this Agreement in the same places where the original
Agreement is filed or recorded. The Trustee shall file or record any instrument
which relates to any change in the office of the Trustee in the same places
where the original Agreement is filed or recorded.
14.2 Intention
of Parties to Establish Trust.
This
Agreement is not intended to create and shall not be interpreted as creating
a
corporation, association, Company, or joint venture of any kind for purposes
of
federal income taxation or for any other purpose.
-21-
14.3 Beneficiaries
Have No Rights or Privileges as Holders of Membership Interests.
Except
as expressly provided in this Agreement or under applicable law, the
Beneficiaries shall have no rights or privileges attributable to their former
status as holders of Membership Interests.
14.4 Laws
as to Construction.
THE
TRUSTEE, AND THE BENEFICIARIES (BY THEIR ACCEPTANCE OF ANY DISTRIBUTIONS MADE
TO
THEM PURSUANT TO THIS AGREEMENT), CONSENT AND AGREE THAT THIS AGREEMENT SHALL
BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE
OF
DELAWARE, WITHOUT REFERENCE TO THE CHOICE OF LAW PRINCIPLES THEREOF. EACH OF
THE
PARTIES HERETO IRREVOCABLY SUBMITS TO THE EXCLUSIVE JURISDICTION OF THE COURTS
OF THE STATE OF DELAWARE AND THE UNITED STATES DISTRICT COURT FOR ANY DISTRICT
WITHIN SUCH STATE FOR THE PURPOSE OF ANY SUIT, ACTION, PROCEEDING OR JUDGMENT
RELATING TO OR ARISING OUT OF THIS AGREEMENT AND THE TRANSACTIONS CONTEMPLATED
HEREBY. SERVICE OF PROCESS IN CONNECTION WITH ANY SUCH SUIT, ACTION OR
PROCEEDING MAY BE SERVED ON EACH PARTY HERETO ANYWHERE IN THE WORLD BY THE
SAME
METHODS AS ARE SPECIFIED FOR THE GIVING OF NOTICES UNDER THIS AGREEMENT. EACH
OF
THE PARTIES HERETO IRREVOCABLY CONSENTS TO THE JURISDICTION OF ANY SUCH COURT
IN
ANY SUCH SUIT, ACTION OR PROCEEDING AND TO THE LAYING OF VENUE IN SUCH COURT.
EACH PARTY HERETO IRREVOCABLY WAIVES ANY OBJECTION TO THE LAYING OF VENUE OF
ANY
SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH COURTS AND IRREVOCABLY WAIVES
ANY CLAIM THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT
HAS
BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE PARTIES HERETO AGREES THAT
A
FINAL JUDGMENT IN ANY ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. ALL PARTIES WAIVE THE RIGHT TO A JURY TRIAL OF ALL SUCH
DISPUTES, CLAIMS AND DEMANDS.
14.5 Severability.
In the
event any provision of this Agreement or the application thereof to any Person
or circumstances shall be finally determined by a court of proper jurisdiction
to be invalid or unenforceable to any extent, the remainder of this Agreement,
or the application of such provision to persons or circumstances other than
those as to which it is held invalid or unenforceable, shall not be affected
thereby, and each provision of this Agreement shall be valid and enforced to
the
fullest extent permitted by law.
14.6 Notices.
Any
notice or other communication by the Trustee to any Beneficiary shall be deemed
to have been sufficiently given, for all purposes, if deposited, postage
prepaid, in a post office or letter box addressed to such Person at his address
as shown in the records of the Trust.
-22-
All
notices and other communications hereunder shall be in writing and shall be
deemed to have been duly given if delivered personally or sent by cable,
telegram, facsimile transmission or telex to the Trustee at the following
address or at such other addresses as shall be specified by the
Trustee:
If
to the
Trustee:
PLM
Financial Services, Inc.
▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇
▇▇▇
▇▇▇▇,
▇▇ ▇▇▇▇▇
Fax:
(▇▇▇) ▇▇▇-▇▇▇▇
14.7 Counterparts.
This
Agreement may be executed in any number of counterparts, each of which shall
be
an original, but such counterparts shall together constitute but one and the
same instrument.
[The
remainder of this page is intentionally blank.]
-23-
IN
WITNESS WHEREOF, the Manager of the Grantor has caused this Agreement to be
executed by an authorized officer, and the Trustee hereunder has executed this
Agreement, as Trustee and not as an individual, as of the date first set forth
herein.
|
GRANTOR:
|
PROFESSIONAL
LEASE MANAGEMENT INCOME FUND I,
L.L.C.
|
By: PLM
Financial Services, Inc., its Manager
By:
s/s ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇ ▇▇▇▇▇, Chief
Financial Officer
TRUSTEE: PLM
FINANCIAL SERVICES, INC.
By:
s/s ▇▇▇▇▇▇▇ ▇ ▇▇▇▇▇
▇▇▇▇▇▇▇
▇ ▇▇▇▇▇, Chief
Financial Officer
SCHEDULE
A
SCHEDULE
OF FEES
to
act
as
TRUSTEE,
REGISTRAR, TRANSFER AGENT AND DISTRIBUTION AGENT
OF
THE
LIQUIDATING TRUST
The
Trustee shall receive no compensation for its services hereunder other than
an
amount equivalent to the compensation and other payments that the Trustee would
have received as Manager of the Company for the same or similar services
undertaken by the Trustee hereunder if the Manager had undertaken such services
on behalf of the Company. The Trustee shall be entitled to receive such
compensation at the times and in the manner that it would have received such
compensation as Manager of the Company.
EXHIBIT
A
FORM
OF
▇▇▇▇
OF SALE, ASSIGNMENT, ACCEPTANCE
AND
ASSUMPTION AGREEMENT
This
▇▇▇▇
OF SALE, ASSIGNMENT, ACCEPTANCE AND ASSUMPTION AGREEMENT, made, executed and
entered into as of ___________, 2006, by and among Professional Lease Management
Income Fund I, L.L.C., a Delaware limited liability company (the “Assignor”),
and PLM Financial Services, Inc. a Delaware corporation, not in its individual
capacity or in its capacity as the manager of the Assignor, but solely as
trustee (the “Trustee”)
of the
Professional Lease Management Income Fund I Liquidating Trust (the
“Liquidating
Trust”).
RECITALS
WHEREAS,
the Trustee and the Assignor are parties to a Liquidating Trust Agreement dated
as of the date hereof (the “Agreement”), pursuant to which the Assignor has
created the Liquidating Trust and engaged the Trustee as trustee to administer
the Liquidating Trust pursuant to the terms of a Plan of Liquidation and
Dissolution of even date herewith (the “Plan”); and
WHEREAS,
the Agreement contemplates that the Assignor will place, as of the date hereof
and in accordance with the Plan,
all
of its unliquidated and/or undistributed assets, including but not limited
to,
cash, equipment and securities, along with certain Cash Reserve subject to
disbursement for the Assignor’s contingent liabilities and the Liquidating
Trust’s contingent liabilities, into the Liquidating Trust established to
receive said assets and reserves; and
WHEREAS,
the Trustee and the Assignor now desire to carry out the intent and purpose
of
the Agreement by the execution and delivery to the Trustee by the Assignor
of
this instrument evidencing the conveyance, assignment, transfer, sale and
delivery to the Trustee of the Transferred Assets (as hereinafter defined)
and
the acceptance by the Trustee of the Assumed Obligations (as hereinafter
defined);
NOW,
THEREFORE, in consideration of the foregoing premises and for $10 and other
good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged:
ASSIGNMENT
The
Assignor does hereby convey, assign, transfer, sell and deliver unto the Trustee
and its successors and assigns, forever, for the benefit of the Liquidating
Trust, all of Assignor's right, title and interest in, to and under all of
the
assets of the Assignor (including but not limited to those set forth and more
fully described by category of asset and more fully enumerated by Assignor
on
Exhibit A
hereto),
including, without limitation any accounts receivable, limited partnership
interests, beneficial interests, rights in litigation, security interests,
contract rights or agreements, rights to payment or distributions or similar
rights that the Assignor may possess in same (together, the “Transferred
Assets”).
-A1-
ACCEPTANCE
AND ASSUMPTION
The
Trustee accepts the foregoing conveyance, assignment, transfer and delivery
of
the Transferred Assets and agrees to assume all liabilities and obligations
relating to the Transferred Assets to the extent specifically set forth in
the
Agreement (the “Assumed
Obligations”).
TO
HAVE
AND TO HOLD the Transferred Assets and the Assumed Obligations unto the Trustee,
its successors and assigns, FOREVER, for the benefit of the Liquidating
Trust.
The
Assignor hereby constitutes and appoints the Trustee and its successors and
assigns as its true and lawful attorneys-in-fact in connection with the
transactions contemplated by this instrument, with full power of substitution,
in the name and stead of the Assignor but on behalf of and for the benefit
of
the Trustee and its successors and assigns, to demand and receive any and all
of
the assets, properties, rights and business hereby conveyed, assigned, and
transferred or intended so to be, and to give receipt and releases for and
in
respect of the same and any part thereof, and from time to time to institute
and
prosecute, in the name of the Assignor or otherwise, for the benefit of the
Trustee or its successors and assigns, proceedings at law, in equity, or
otherwise, which the Trustee or its successors or assigns reasonably deem proper
in order to collect or reduce to possession or endorse any portion of the
Transferred Assets and to do all acts and things in relation to the assets
which
the Trustee or its successors or assigns reasonably deem desirable.
This
instrument shall be binding upon and shall inure to the benefit of the
respective successors and assigns of the Assignor and the Trustee.
This
instrument shall be construed and enforced in accordance with the laws of the
State of Delaware, without regard to conflicts of law.
[The
remainder of this page is intentionally blank.]
-A2-
IN
WITNESS WHEREOF, the undersigned have executed this ▇▇▇▇ of Sale, Assignment,
Acceptance and Assumption Agreement under seal on the date first above
written.
ASSIGNOR
Professional
Lease Management Income Fund I, L.L.C.
By: PLM
Financial Services, Inc., its manager
By:
___________________________________
▇▇▇▇▇▇▇
▇
▇▇▇▇▇, Chief Financial Officer
TRUSTEE
PLM
Financial Services, Inc.,
not in
its individual capacity
but
solely as trustee of the Liquidating Trust
By:
___________________________________
▇▇▇▇▇▇▇
▇
▇▇▇▇▇, Chief Financial Officer
-A3-
Exhibit
A
to
▇▇▇▇
of
Sale, Assignment, Acceptance and Assumption Agreement
Transferred
Assets