Exhibit 99.1
PACIFIC GULF
LIQUIDATING TRUST AGREEMENT
Dated August 23, 2001
TABLE OF CONTENTS
Page
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ARTICLE I. NAME AND DEFINITIONS................................................2
1.1 NAME...............................................................2
1.2 CERTAIN TERMS DEFINED..............................................2
1.3 MEANING OF OTHER TERMS.............................................3
ARTICLE II. NATURE OF TRANSFER.................................................4
2.1 PURPOSE AND OBJECTIVE OF LIQUIDATING TRUST.........................4
2.2 APPOINTMENT AND ACCEPTANCE OF TRUSTEE..............................4
2.3 TRANSFER OF ASSETS TO TRUST........................................4
2.4 NO REVERSION TO THE CORPORATION....................................4
2.5 INSTRUMENTS OF FURTHER ASSURANCE...................................5
2.6 ASSUMPTION OF THE CORPORATION'S LIABILITIES........................5
2.7 ASSIGNMENT FOR BENEFIT OF BENEFICIARIES............................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
ARTICLE IV. DURATION AND TERMINATION OF LIQUIDATING TRUST......................6
4.1 DURATION...........................................................6
4.2 TERMINATION BY BENEFICIARIES.......................................7
4.3 NO TERMINATION FOR THREE MONTHS OR DURING PENDENCY OF
CLAIMS.............................................................7
4.4 CONTINUANCE OF TRUSTEE'S AUTHORITY AFTER TERMINATION...............7
ARTICLE V. ADMINISTRATION OF LIQUIDATING TRUST ESTATE..........................7
5.1 SALE OF LIQUIDATING TRUST ESTATE...................................7
5.2 CONTINUING EFFORTS TO RESOLVE CLAIMS AND LIABILITIES...............7
5.3 CONTINUED COLLECTION OF PROPERTY OF LIQUIDATING TRUST
ESTATE.............................................................7
5.4 PAYMENT OF CLAIMS, EXPENSES AND LIABILITIES........................8
5.5 INTERIM DISTRIBUTIONS.............................................10
5.6 FINAL DISTRIBUTION................................................10
5.7 EXCESS CASH BALANCES..............................................10
5.8 FISCAL YEAR.......................................................11
5.9 ANNUAL REPORTS TO BENEFICIARIES; FEDERAL INCOME TAX
INFORMATION.......................................................11
5.10 INTERIM REPORTS TO BENEFICIARIES..................................11
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5.11 SEC FILINGS.......................................................12
ARTICLE VI. POWERS AND LIMITATIONS OF THE TRUSTEE.............................12
6.1 LIMITATIONS ON TRUSTEE............................................12
6.2 SPECIFIC POWERS OF TRUSTEE........................................12
ARTICLE VII. TRUSTEE..........................................................14
7.1 GENERALLY.........................................................14
7.2 RELIANCE BY TRUSTEE...............................................15
7.3 INDEMNIFICATION OF TRUSTEE........................................15
7.4 NO DUTY NOT TO COMPETE............................................15
ARTICLE VIII. PROTECTION OF PERSONS DEALING WITH THE TRUSTEE..................16
8.1 ACTION BY TRUSTEE.................................................16
8.2 RELIANCE ON STATEMENT BY TRUSTEE..................................16
8.3 APPLICATION OF MONEY PAID OR TRANSFERRED TO TRUSTEE...............16
ARTICLE IX. COMPENSATION OF TRUSTEE...........................................16
9.1 AMOUNT OF COMPENSATION............................................16
9.2 EXPENSES..........................................................16
ARTICLE X. TRUSTEE AND SUCCESSOR TRUSTEE......................................16
10.1 NUMBER OF TRUSTEES................................................16
10.2 RESIGNATION AND REMOVAL...........................................17
10.3 APPOINTMENT OF SUCCESSOR..........................................17
10.4 ACCEPTANCE OF APPOINTMENT BY SUCCESSOR TRUSTEE....................17
10.5 BONDS.............................................................17
ARTICLE XI. CONCERNING THE BENEFICIARIES......................................17
11.1 EVIDENCE OF ACTION BY BENEFICIARIES...............................17
11.2 LIMITATIONS ON SUITS BY BENEFICIARIES.............................18
11.3 REQUIREMENT OF UNDERTAKING........................................18
ARTICLE XII. MEETING OF BENEFICIARIES.........................................18
12.1 PURPOSE OF MEETINGS...............................................18
12.2 MEETING CALLED BY TRUSTEE.........................................18
12.3 MEETING CALLED ON REQUEST OF BENEFICIARIES........................19
12.4 PERSONS ENTITLED TO VOTE AT MEETING OF BENEFICIARIES..............19
12.5 QUORUM............................................................19
12.6 ADJOURNMENT OF MEETING............................................19
12.7 CONDUCT OF MEETINGS...............................................19
12.8 RECORD OF MEETING.................................................19
12.9 ACTION WITHOUT A MEETING..........................................19
12.10 WAIVER OF NOTICE..................................................19
12.11 REQUIRED VOTE.....................................................20
ARTICLE XIII. AMENDMENTS; OTHER RIGHTS........................................20
13.1 CONSENT OF BENEFICIARIES..........................................20
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13.2 NOTICE AND EFFECT OF AMENDMENT....................................20
13.3 RIGHTS OF THE CORPORATION.........................................21
ARTICLE XIV. LIABILITY ADMINISTRATION.........................................21
14.1 CERTAIN PROCEDURES................................................21
ARTICLE XV. MISCELLANEOUS PROVISIONS..........................................23
15.1 FILING DOCUMENTS..................................................23
15.2 INTENTION OF PARTIES TO ESTABLISH LIQUIDATING TRUST;
FEDERAL INCOME TAX INTENTIONS.....................................23
15.3 TAX WITHHOLDING...................................................23
15.4 LAWS AS TO CONSTRUCTION...........................................23
15.5 SEPARABILITY......................................................24
15.6 NOTICES...........................................................24
15.7 COUNTERPARTS......................................................24
15.8 ENTIRE AGREEMENT..................................................24
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SCHEDULES
Schedule A Assets
Schedule B Purchase Agreement Liabilities
Schedule B-1 Other Liabilities
Schedule C Post-Merger Adjustments
Schedule D Transfer Documents
Schedule E Trustee Compensation
Schedule E-1 Consultant Compensation
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LIQUIDATING TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST by and among ▇▇▇▇▇ Fargo Bank
Minnesota, National Association (the "Trustee"), and Pacific Gulf Properties
Inc., a Maryland corporation (the "Corporation").
WHEREAS, on November 9, 2000, the shareholders of the Corporation
approved the liquidation of the Corporation and, in furtherance thereof, it is
contemplated that this liquidating trust (the "Liquidating Trust") will be
composed of some or all assets of the Corporation to be administered and
liquidated for the benefit of the Corporation Shareholders;
WHEREAS, the Corporation has entered into an Agreement and Plan of
Merger, dated as of March 1, 2001 (as amended from time to time, the "Merger
Agreement"), with FountainGlen Properties LLC, a Delaware limited liability
company ("FGP"), pursuant to which, on the terms and subject to the conditions
set forth therein, the Corporation will be merged with and into FGP (the
"Merger") on the closing date specified in such Merger Agreement (the "Merger
Closing Date");
WHEREAS, as a condition to the consummation of the Merger, the
Corporation has agreed, among other things, that it will (i) transfer to the
Liquidating Trust the assets listed on Schedule A attached hereto (the
"Assets"), (ii) cause this Liquidating Trust to assume all of the liabilities
(whether such liabilities are or will be absolute, accrued, asserted or
unasserted, fixed, contingent or otherwise) of the Corporation arising out of
the ownership by the Corporation of the Assets, other than with respect to the
lawsuit filed against the Corporation by Commerce Job Journal regarding the
Sacramento property, as to which the Liquidating Trust shall provide no
indemnification and as to which the Liquidating Trust shall assume no liability
(such liabilities being referred to herein as the "Trust Property Liabilities");
(iii) cause this Liquidating Trust to assume all of the liabilities of the
Corporation listed on Schedule B attached hereto (such liabilities being
referred to herein as the "Purchase Agreement Liabilities"), and (iv) cause this
Liquidating Trust to assume all of the liabilities of the Corporation listed on
Schedule B-1 attached hereto (such liabilities being referred to herein as the
"Other Liabilities");
WHEREAS, it is a condition precedent to the consummation of the
transactions contemplated by the Merger Agreement that this Liquidating Trust
assume certain duties, rights and obligations of the Corporation under the
Merger Agreement to effectuate potential post-merger adjustments more
particularly described on Schedule C attached hereto that may occur subsequent
to the date of the consummation of the transactions contemplated by the Merger
Agreement (collectively, the "Post-Merger Adjustments"); and
WHEREAS, the Board of Directors of the Corporation believes that the
Assets will, as of the Transfer Date, represent an amount in excess of the
amount required to pay the maximum potential liability under (i) the Trust
Property Liabilities, (ii) the Purchase Agreement Liabilities, (iii) the
Post-Merger Adjustments, (iv) the Other Liabilities, (v) the administrative
expenses of the Liquidating Trust created hereby, and (vi) any other liabilities
that may be incurred by the Liquidating Trust.
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NOW THEREFORE, in consideration of the premises and other valuable
consideration, the receipt and sufficiency of which are hereby acknowledged and
confessed, subject to the terms and provisions set out below, the Corporation
hereby grants, releases, assigns, transfers, conveys and delivers unto the
Trustee all of its right, title and interest in the Assets in trust for the uses
and purposes stated herein and the Trustee hereby assumes, and undertakes to
perform and discharge, the Trust Property Liabilities, the Purchase Agreement
Liabilities, the Other Liabilities and the Post-Merger Adjustments.
TO HAVE AND TO HOLD in trust, in accordance with the terms and
provisions, and subject to the conditions, of this Agreement of Trust, until the
date of termination of the Trust in accordance with the provisions of Article V
hereof, the Trustee hereby accepts such Assets and such Liquidating Trust,
subject to the same terms, provisions and conditions, to wit:
ARTICLE I.
NAME AND DEFINITIONS
1.1 NAME. This trust shall be known as the Pacific Gulf Properties
Liquidating Trust (the "Liquidating Trust").
1.2 CERTAIN TERMS DEFINED. For all purposes of this instrument, unless
the context otherwise requires:
(a) "Agreement" or "Agreement of Trust" shall mean this
instrument as originally executed or as it may from time to time be amended
pursuant to the terms hereof.
(b) "Asserted Liability" shall mean a Liability, of which the
Trustee has actual knowledge, which has been asserted in writing or otherwise
has been overtly asserted or identified as a claim against the Liquidating Trust
Estate.
(c) "Beneficiaries" shall mean (i) until the Distribution
Date, the Corporation and (ii) after the Distribution Date, the Corporation
Shareholders (as defined herein), and their legal representatives, who in
accordance with the terms hereof, shall have received appropriate Beneficial
Interests (as defined herein) in the Liquidating Trust Estate (as defined
herein).
(d) "Beneficial Interest" shall mean the share of each
Beneficiary in the Liquidating Trust Estate. On the Distribution Date (as
defined herein) each Corporation Shareholder shall receive a Beneficial Interest
in the Liquidating Trust Estate determined by the ratio of the number of shares
of Common Stock (as defined herein) held by such Corporation Shareholder on the
Distribution Date to the aggregate number of issued and outstanding shares of
Common Stock held by all Corporation Shareholders on the Distribution Date.
(e) "Common Stock" shall mean the Common Stock, par value
$0.01 per share, of the Corporation outstanding on the date hereof.
(f) "Corporation Shareholder" shall mean each record holder of
Common Stock on the Distribution Date that is listed in the Corporation
Shareholder List that is held by
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the Corporation's transfer agent, Computershare Investor Services; it being
agreed that a number of Corporation Shareholders may hold Beneficial Interests
in street name for beneficial holders.
(g) "Distribution Date" shall mean August 23, 2001, which is
the date on which the Beneficial Interests are to be distributed to the
Corporation Shareholders.
(h) "Final Liability" shall mean a Litigation Liability which
is evidenced by a final non-appealable judgment, order or other determination;
or an Asserted Liability or a Litigation Liability which the Trustee determines
should be accepted or settled and paid out from the Liquidating Trust Estate.
(i) "Liabilities" shall mean any unsatisfied debts, claims,
judgments, decrees, suits or other payment obligations related to Trust Property
Liabilities, Purchase Agreement Liabilities, Other Liabilities and/or
Post-Merger Adjustments, or to indemnity claims with respect to Losses, whether
contingent or fixed, acknowledged or disputed as to validity, or identified or
asserted prior to or after creation of the Trust.
(j) "Liquidating Trust Estate" shall mean all the property
held from time to time by the Trustee under this Agreement of Trust including
but not limited to (i) the Assets, (ii) the proceeds (including rents, sales
payments and recoveries of claims) from such property held, or from the sale
thereof, (iii) dividends and other cash distributions received from any
corporation, (iv) interest earned on any monies or securities held by the
Trustee under this Agreement of Trust, and (v) any royalties or income of any
kind.
(k) "Litigation Liability" shall mean a Liability which
involves any legal action for which the Trustee has received service of process.
(l) "Losses" shall mean any and all losses, liabilities,
damages, penalties, fines, judgments, awards, settlements, taxes, costs, fees,
expenses (including reasonable attorneys' fees) and disbursements actually
sustained by FGP.
(m) "Transfer Date" shall mean the date on which the Assets
are transferred into, and the Trust Property Liabilities, the Purchase Agreement
Liabilities, the Other Liabilities and the Post-Merger Adjustments are assumed
by, the Liquidating Trust.
(n) "Trustee" shall mean the original Trustee or any
successors to it from time to time in accordance with the provisions of this
Agreement.
1.3 MEANING OF OTHER TERMS. Except where the context otherwise
requires, words importing the masculine gender include the feminine and the
neuter, if appropriate, words importing the singular number shall include the
plural number and vice versa, and words importing persons shall include firms,
associations, and corporations. All references herein to Articles, Sections, and
other subdivisions refer to the corresponding Articles, Sections, and other
subdivisions of this Agreement; and the words herein, hereof, hereby, hereunder,
and words of similar import, refer to this Agreement as a whole and not to any
particular Article, Section, or subdivision of the Agreement.
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ARTICLE II.
NATURE OF TRANSFER
2.1 PURPOSE AND OBJECTIVE OF LIQUIDATING TRUST. The sole purpose and
objective of this Liquidating Trust is to liquidate the Liquidating Trust Estate
in a manner calculated to conserve and protect the Liquidating Trust Estate
until such time as the proceeds can be distributed, and to collect and
distribute the income and proceeds therefrom to the Beneficiaries in as prompt
and orderly a fashion as possible after the payment of expenses and liabilities
and the making of reasonable provision for claims and contingent liabilities,
including without limitation any Trust Property Liabilities, the Purchase
Agreement Liabilities, the Other Liabilities and the Post-Merger Adjustments.
The Liquidating Trust shall have no objective to continue or engage in the
conduct of a trade or business.
2.2 APPOINTMENT AND ACCEPTANCE OF TRUSTEE. ▇▇▇▇▇ Fargo Bank Minnesota,
National Association, is hereby named, constituted, and appointed as Trustee, to
act and serve as Trustee of the Liquidating Trust and to perform the powers and
functions of Trustee to accomplish the objective of the Liquidating Trust as
provided in this Agreement. The Trustee is willing, and does hereby accept the
appointment, to act and serve as Trustee of the Liquidating Trust and to hold
the Liquidating Trust Estate and administer the Liquidating Trust pursuant to
the terms of this Agreement.
2.3 TRANSFER OF ASSETS TO TRUST. All right, title, and interests of the
Corporation in and to the Assets are hereby vested in the Liquidating Trust for
the benefit of the Beneficiaries. From and after the Transfer Date, all of the
Assets shall be administered by the Trustee on behalf of the Beneficiaries.
Prior to the creation of the Liquidating Trust, the Corporation shall have
executed or caused to be executed and delivered to, or upon the order of, the
Trustee, any and all documents and other instruments as may be necessary or
useful to convey the Assets to, and to confirm title to the Assets in, the
Liquidating Trust (a list of such documents is set forth on Schedule D attached
hereto). The Corporation 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 transfer to the Trustee any portion of the Assets
intended to be conveyed hereby and to vest in the Trustee the powers,
instruments or funds in trust hereunder. The Corporation and the Trustee
acknowledge that an amount of cash that would otherwise have been transferred to
the Trustee as Assets shall be loaned from the Liquidating Trust to the
Corporation pursuant to that certain Promissory Note Secured by Deed of Trust,
dated as of the date hereof, in the original principal amount of $10,750,000,
with such Promissory Note to be secured by that certain Deed of Trust with
Assignment of Rents as Additional Security, dated as of the date hereof
(collectively, the "Note Documents"), and the Trustee is hereby directed to
accept such Note Documents on behalf of the Liquidating Trust in the form and
with the terms as executed by the Corporation and delivered to the Trustee
immediately following execution and delivery of this Agreement. The cash not
transferred to the Trustee in the amount $10,750,000 shall be retained in the
possession of the Corporation to fund such loan.
2.4 NO REVERSION TO THE CORPORATION. The Liquidating Trust shall be
revocable at the election of the Corporation until such time as the Beneficial
Interests are
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distributed to the Corporation Shareholders. Following such time, the
Liquidating Trust shall be irrevocable and no part of the Liquidating Trust
Estate shall revert to the Corporation.
2.5 INSTRUMENTS OF FURTHER ASSURANCE. The Corporation and its officers
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 transfer and vest in
the Trustee the Assets in trust hereunder.
2.6 ASSUMPTION OF THE CORPORATION'S LIABILITIES. The Trustee (in its
capacity as trustee and not personally) hereby assumes all of the Trust Property
Liabilities (including those with respect to contingent or unliquidated claims),
the Purchase Agreement Liabilities, the Other Liabilities and the Post-Merger
Adjustments, subject to Section 7.2(c), and agrees hereafter to cause the
Liquidating Trust to pay, discharge and perform when due all of the Trust
Property Liabilities, the Purchase Agreement Liabilities, the Other Liabilities
and the Post-Merger Adjustments and to indemnify, defend and hold harmless FGP
from and against any and all Losses that result from any of the Trust Property
Liabilities, the Purchase Agreement Liabilities, the Other Liabilities and the
Post-Merger Adjustments. The Liquidating Trust will, upon reasonable request of
FGP, execute, acknowledge and deliver such further instruments, undertakings and
other agreements and do such further acts as may be necessary or proper to cause
and effect the assumption of the Trust Property Liabilities, the Purchase
Agreement Liabilities, the Other Liabilities and the Post-Merger Adjustments by
the Liquidating Trust. Should any liability be asserted against the Trustee as
the transferee of the Liquidating Trust Estate or as a result of the assumption
made in this Section, the Trustee may use such part of the Liquidating Trust
Estate as it deems necessary or appropriate in contesting any such liability or
in payment thereof. Notwithstanding anything set forth herein other than Section
4.1, the indemnification obligations of the Liquidating Trust and the Trustee to
FGP under this Section 2.6 shall terminate upon the termination of the
Liquidating Trust, provided that there is no pending or asserted claim for
indemnification pursuant to Section 5.4 or Section 2.6.
2.7 ASSIGNMENT FOR BENEFIT OF BENEFICIARIES. The Trustee hereby
declares and agrees that it is holding the Liquidating Trust Estate solely for
the benefit of the Beneficiaries of the Liquidating Trust, and retains only such
incidents of ownership as are necessary to undertake the actions and
transactions authorized herein.
ARTICLE III.
BENEFICIARIES
3.1 BENEFICIAL INTERESTS.
(a) Prior to the Distribution Date, the Corporation shall
retain all of the Beneficial Interests. After the Distribution Date, the
Beneficial Interest of each Corporation Shareholder shall be determined by the
Trustee in accordance with Section 1.2(c) above. Such determination shall be
based upon a certified copy of the list of Corporation Shareholders as of the
Distribution Date (the "Corporation Shareholder List"). To be able to determine
the appropriate Beneficial Interest of each Corporation Shareholder, on (or
promptly after) the
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Distribution Date, the Corporation will cause the transfer agent of the
Corporation to deliver a certified copy of the Corporation Shareholder List to
the Trustee.
(b) After the Distribution Date, Beneficial Interests in the
Liquidating Trust shall not be represented by certificates, and no Beneficiary
shall be entitled to such a certificate.
3.2 RIGHTS OF BENEFICIARIES. Each Beneficiary shall be entitled to
participation 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 of Trust. The
Beneficial Interest of each Beneficiary is hereby declared and shall be in all
respects personal property and upon the death of an individual Beneficiary his
Beneficial Interest shall pass to his legal representative and heirs, as
applicable, and such death shall not terminate or affect the validity of this
Agreement. A Beneficiary shall have no title to, possession of, management of,
or control of, the Liquidating Trust Estate except as herein expressly provided.
No widower, widow, heir, or devisee or 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 whatever forming a part of
the Liquidating Trust Estate, but the whole title to all the Liquidating Trust
Estate shall be vested in the Trustee and the sole interest of the Beneficiaries
shall be the rights and benefits given to such persons under this Agreement of
Trust. The Beneficiaries will be treated as the grantors and deemed owners of
the Liquidating Trust for federal income tax purposes, and they will be treated
for federal income tax purposes as owning undivided interests in its assets.
3.3 NO TRANSFER OF INTERESTS OF BENEFICIARIES. After the Distribution
Date, the Beneficial Interest of a Beneficiary may not be transferred either by
the 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 anticipate or dispose of his Beneficial Interest in the
Liquidating Trust; provided, however, that the Beneficial Interest of a
Beneficiary shall be assignable or transferable by will, intestate succession,
or operation of law.
ARTICLE IV.
DURATION AND TERMINATION OF LIQUIDATING TRUST
4.1 DURATION. Subject to Section 4.2 and Section 4.3, the existence of
the Liquidating Trust shall terminate on August 21, 2004 unless an earlier
termination is required by the applicable laws of the State of New York or upon
the action of the Beneficiaries as provided in Section 4.2, or unless earlier
terminated by the distribution of all of the Liquidating Trust Estate as
provided in Section 5.6; provided that in any event the Liquidating Trust shall
terminate no later than August 21, 2021. However, notwithstanding the foregoing,
if there remains any contingent or unliquidated claims or any other outstanding
contingent liabilities for which the Liquidating Trust may be responsible, the
Liquidating Trust term shall be extended, solely with respect to such claims and
liabilities, for a period that is reasonably necessary to resolve such claims
and liabilities; provided further, that in order for the life of the Liquidating
Trust to extend beyond three years from the Transfer Date, the Trustee shall
have received an opinion of counsel to the Liquidating Trust regarding the
registration and reporting requirements of the Liquidating
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Trust under the Securities Act of 1933, as amended, the Securities Exchange Act
of 1934, as amended, and any other matters, including tax matters, the Trustee
shall request with regard to compliance by the Liquidating Trust with applicable
federal securities and tax laws.
4.2 TERMINATION BY BENEFICIARIES. The Liquidating Trust may be
terminated at any time by the action of Beneficiaries having more than 66.7% of
the aggregate Beneficial Interests as evidenced in the manner provided in
Article XII; provided, however, that the Liquidating Trust may not be terminated
pursuant to such action of Beneficiaries (i) in violation of Section 4.3, (ii)
unless prior to any such termination, all Assets consisting of real property
shall have been sold for cash and (iii) unless prior to any such termination,
the Trustee has determined, in accordance with Article XIV, that there remains
no contingent or unliquidated claims or other outstanding contingent liabilities
for which the Liquidating Trust may be responsible.
4.3 NO TERMINATION FOR THREE MONTHS OR DURING PENDENCY OF CLAIMS.
Notwithstanding Section 4.1, Section 4.2 or Section 5.6, no termination shall
occur prior to the date that is three months after the Merger Closing Date,
which time period shall be extended to the extent of and for the time period of
any pending or asserted claim for indemnification pursuant to Section 5.4 or
Section 2.6.
4.4 CONTINUANCE OF TRUSTEE'S AUTHORITY AFTER TERMINATION. After the
termination of the Liquidating Trust and for the purpose of winding up the
affairs of the Liquidating Trust, the Trustee shall continue to have the
authority to act as such until its duties have been fully performed. Except as
otherwise specifically provided herein (including the preceding sentence), upon
the termination of the Liquidating Trust, the Trustee shall have no further
duties or obligations hereunder.
ARTICLE V.
ADMINISTRATION OF LIQUIDATING TRUST ESTATE
5.1 SALE OF LIQUIDATING TRUST ESTATE. The Trustee may, at such times
and for such amounts as it may deem appropriate, transfer, assign, or otherwise
dispose of all or any part of the Liquidating Trust Estate that it deems
appropriate at public auction or at private sale for cash securities.
5.2 CONTINUING EFFORTS TO RESOLVE CLAIMS AND LIABILITIES. In accordance
with Article XIV, the Trustee will make continuing efforts to resolve any
contingent or unliquidated claims and outstanding contingent liabilities for
which the Liquidating Trust may be responsible, dispose of the Liquidating Trust
Estate, make timely distributions, and not unduly prolong the duration of the
Liquidating Trust.
5.3 CONTINUED COLLECTION OF PROPERTY OF LIQUIDATING TRUST ESTATE. All
property that is determined to be a part of the Liquidating Trust Estate shall
continue to be collected by the Trustee and held as a part of the Liquidating
Trust Estate. The Trustee shall hold the Liquidating Trust Estate without being
obligated to provide for or pay any interest thereon to any Beneficiary, except
to the extent of such Beneficiary's share of interest
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actually earned by the Liquidating Trust after payment of the Liquidating
Trust's liabilities and expenses as provided in Section 5.4.
5.4 PAYMENT OF CLAIMS, EXPENSES AND LIABILITIES.
(a) In accordance with Article XIV, the Trustee shall pay from
the Liquidating Trust Estate all claims, expenses, charges, liabilities, and
obligations of the Liquidating Trust Estate, including the Trust Property
Liabilities, the Purchase Agreement Liabilities, the Other Liabilities and the
Post-Merger Adjustments and other liabilities and obligations that the Trustee
specifically assumes and agrees to cause the Liquidating Trust to pay pursuant
to this Agreement of Trust and such transferee liabilities that the Trustee may
be obligated to pay as transferees of the Liquidating Trust Estate, including
among the foregoing, and without limiting the generality of the foregoing,
interest, 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 the Liquidating 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 Liquidating Trust Estate by the Trustee. The Trustee
may, in its discretion, make reasonable provision, by reserve or otherwise out
of the Liquidating Trust Estate, for such amount as the Trustee in good faith
may reasonably determine to be necessary or desirable to meet current or future
claims and liabilities of the Liquidating Trust, whether fixed or contingent.
(b) Notwithstanding the foregoing, any payments to FGP for or
on account of the Purchase Agreement Liabilities, the Other Liabilities or the
Trust Property Liabilities under the indemnification provisions of Section 2.6
shall be made pursuant to the following provisions only:
(i) If FGP shall believe that it is entitled to
indemnification pursuant to this Agreement in respect of the Trust Property
Liabilities, the Purchase Agreement Liabilities, the Other Liabilities or the
Post-Merger Adjustments (subject to the terms and conditions of the Merger
Agreement), FGP shall give the Trustee prompt written notice thereof. Any such
notice shall set forth in reasonable detail and to the extent then known the
basis and amount for such claim for indemnification. The failure of FGP to give
notice of any claim for indemnification promptly shall not adversely affect
FGP's right to indemnity hereunder except to the extent that such failure
adversely affects the right of the Liquidating Trust to assert any reasonable
defense to such claim. The Liquidating Trust shall have twenty (20) business
days following its receipt of such notice either to (A) acquiesce to such claim
by giving FGP written notice of such acquiescence or (B) object to the claim
either by giving FGP written notice of the objection or by failing to acquiesce
to such claim in writing within said time period (which failure shall be deemed
to be an objection to such claim). If the Liquidating Trust acquiesces in
writing to such claim within such twenty (20) business day period, FGP shall be
entitled to be indemnified for all Losses related to the Trust Property
Liabilities, the Other Liabilities or the Purchase Agreement Liabilities
reasonably and proximately incurred by FGP in respect of such claim. If the
Liquidating Trust does not acquiesce in writing to such claim within such twenty
(20) business day period, then FGP and the Liquidating Trust shall attempt, in
good faith, to resolve such dispute within ten (10) business days after
expiration of such twenty (20) business day period. If FGP and the Liquidating
Trust are unable to resolve their dispute within such ten
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(10) business day period (or such additional period of time as may be mutually
agreed to by them), the claim shall be resolved in a manner consistent with
Section 5.4(b)(iii) hereof.
(ii) In connection with any claim that may give rise
to indemnity under this Agreement resulting from or arising out of any claim
against FGP by a person that is not a party hereto, the Liquidating Trust may,
but shall not be obligated to (unless FGP elects not to seek indemnity hereunder
for such claim), upon written notice to FGP, assume the defense of any such
claim if the Liquidating Trust acknowledges to FGP the right of FGP to indemnity
hereunder and shall either, at the discretion of the Trustee, promptly pay such
claim or provide assurances, reasonably satisfactory with respect to such claim
to FGP, that the Liquidating Trust will be financially able to satisfy such
claim to the extent provided herein if such claim is decided adversely. If the
Liquidating Trust assumes the defense of any such claim, the Liquidating Trust
shall select counsel reasonably acceptable to FGP (provided that any counsel
selected by an insurer that has accepted the obligation to defend such claim
shall be deemed acceptable to FGP) to conduct the defense of such claim, shall
take all steps reasonably necessary in the defense or settlement thereof and
shall at all times diligently and promptly pursue the resolution thereof. If the
Liquidating Trust shall have assumed the defense of any claim in accordance with
this Section 5.4(b)(ii), the Liquidating Trust shall be authorized to consent to
a settlement of, or the entry of any judgment arising from, any such claim,
without the prior written consent of FGP; provided, however, that the
Liquidating Trust shall not be authorized to encumber any of the assets of FGP
or to agree to any restriction that would apply to FGP or to its conduct of
business; and provided further, that a condition to any such settlement shall be
a complete release of FGP and its affiliates, directors, officers, employees and
agents with respect to such claim, including any reasonably foreseeable
collateral consequences thereof. FGP shall be entitled to participate in (but
not control) the defense of any such action, with its own counsel and at its own
expense. FGP shall, and shall cause each of its affiliates, directors, officers,
employees and agents to, cooperate fully with the Liquidating Trust in the
defense of any claim being defended by the Liquidating Trust pursuant to this
Section 5.4(b)(ii). If the Liquidating Trust does not assume the defense of any
claim resulting therefrom in accordance with the terms of this Section
5.4(b)(ii), or the Liquidating Trust fails to diligently and promptly pursue the
resolution of such claim, FGP may defend against or prosecute such claim in such
manner as it may deem appropriate, including settling such claim after giving at
least five (5) business days prior notice of the same to the Liquidating Trust,
on such terms as FGP may deem appropriate, provided that any such settlement
shall be subject to either (i) the consent of the Liquidating Trust, such
consent not to be unreasonably withheld, or (ii) the complete release by the
third party claimant of the Liquidating Trust and the Trustee and their
respective affiliates, directors, officers, employees and agents with respect to
such claim, including any foreseeable collateral consequences thereof. In such
circumstances, the Liquidating Trust will, at its sole cost and expense, provide
reasonable cooperation to FGP and its counsel in defending or prosecuting the
claim; and in circumstances in which FGP is ultimately determined in a court of
law to be entitled to indemnification hereunder, the Liquidating Trust shall
reimburse FGP for all Losses reasonably and proximately incurred by FGP in
respect of such claim.
(iii) With respect to any dispute under this Section
5.4, including, without limitation, a dispute under Section 5.4(b)(i), the
Trustee, the Corporation (on behalf of the Corporation Shareholders) and FGP
each hereby irrevocably and unconditionally consents to submit to the exclusive
jurisdiction of the courts of the Borough of Manhattan, City and State of New
York and of the United States of America located in the Borough of Manhattan,
City and State of
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New York (the "New York Courts") for any litigation arising out of or relating
to the Trust and the transactions contemplated hereby (and agrees not to
commence any litigation relating thereto except in such courts), waives any
objection to the laying of venue of any such litigation in the New York Courts
and agrees not to plead or claim in any New York Court that such litigation
brought therein has been brought in an inconvenient forum.
5.5 INTERIM DISTRIBUTIONS. At such time as may be determined by the
Trustee, the Trustee shall distribute, or cause to be distributed, to the
Beneficiaries on the close of business on such record date as the Trustee shall
determine, in proportion to the respective Beneficial Interests of the
Beneficiaries in the Liquidating Trust Estate, (i) an amount which represents
the income from investments and (ii) cash comprising the Liquidating Trust
Estate; provided, however, that the amount described in (i) and (ii) shall be
reduced by the retention of reasonable amounts of cash and property determined
in the sole discretion of the Trustee to be sufficient to meet claims, expenses
and contingent liabilities.
5.6 FINAL DISTRIBUTION. If the Trustee determines that all claims,
debts, liabilities and obligations of the Liquidating Trust have been paid,
discharged or otherwise reserved for (except those of Beneficiaries with respect
to their interests herein), or if the existence of the Liquidating Trust shall
terminate pursuant to Sections 4.1 or 4.2, the Trustee shall, as expeditiously
as is consistent with the conservation and protection of the Liquidating Trust
Estate, distribute the Liquidating Trust Estate to each Beneficiary of record on
the close of business on such record date as the Trustee may determine, in
proportion to each Beneficiary's Beneficial Interest therein.
5.7 EXCESS CASH BALANCES. In furtherance of, and without limiting, the
obligations of the Liquidating Trust to FGP under Section 5.4 of this Agreement,
the Liquidating Trust agrees that for a period ending on the later of three
months following the Merger Closing Date or for so long as any matters related
to the Post-Merger Adjustments are pending, the Liquidating Trust agrees that it
will maintain Excess Cash Balances (as herein defined) of not less than
$5,000,000. In addition to the obligations of the Liquidating Trust under the
preceding sentence, the Liquidating Trust agrees that for a period ending
(subject to Section 4.1) on the earlier of (i) the final settlement, dismissal,
resolution or judgment with respect to the lawsuit filed by Child Abuse
Prevention and Volunteer Center against the Corporation (the "CAP Lawsuit") or
(ii) the date upon which the Liquidating Trust obtains a loss mitigation
insurance policy with respect to the CAP Lawsuit, with a coverage amount of at
least $10,000,000 and on terms substantially similar to those obtained by the
Corporation in its loss mitigation insurance policy, issued on or about the date
hereof, with respect to the Commerce Job Journal lawsuit against the Corporation
(if any such date occurs, the "CAP Insurance Date"), the Liquidating Trust
agrees that it will maintain Excess Cash Balances of not less than $10,000,000,
it being agreed that the Excess Cash Balance requirement set forth in the first
sentence of this Section 5.7 and the Excess Cash Balance requirement set forth
in the second sentence of this Section 5.7 shall be mutually exclusive and
independent of each other. Notwithstanding the foregoing, the Liquidating Trust
shall be under no obligation to obtain any such insurance with respect to the
CAP Lawsuit. For this purpose, the "Excess Cash Balance" of the Liquidating
Trust shall mean the cash and cash equivalents (it being agreed that cash
equivalents shall include, without limitation, the amounts due to the
Liquidating Trust under the Promissory Note Secured by Deed
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of Trust made by FGP in favor of the Liquidating Trust as set forth on Schedule
A hereto) held by the Liquidating Trust in excess of the amount of cash and cash
equivalents that the Liquidating Trust is holding to satisfy its other claims,
expenses, charges, liabilities and obligations (including contingent or
unliquidated claims). At the Merger Closing Date and from time to time
thereafter during the pendency of the Liquidating Trust's obligations under this
Section 5.7, upon the reasonable request of FGP, the Trustee shall provide to
FGP a certification, in form and substance reasonably satisfactory to FGP,
setting forth the Excess Cash Balances of the Liquidating Trust and the basis of
such calculation.
5.8 FISCAL YEAR. The fiscal year of the Liquidating 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 fiscal year of the Liquidating Trust shall
end.
5.9 ANNUAL REPORTS TO BENEFICIARIES; FEDERAL INCOME TAX INFORMATION. As
soon as practicable after the close of each fiscal year (including the year in
which the Liquidating Trust terminates as provided in Article IV or this Article
V), and in any event within 90 days after the close of each fiscal year
(including the year in which the Liquidating Trust terminates as provided in
Article IV or this Article V), the Trustee shall prepare and mail to each
Beneficiary an Annual Report on Form 10-K or a report for such fiscal year
showing the assets and liabilities of the Liquidating Trust at the end of each
such fiscal year and the receipts and disbursements of the Liquidating Trust for
the period, including dates and amounts of distributions made by the Trustee and
information regarding interest income received by the Trustee on any obligations
owing to the Liquidating Trust or the Trustee, and such other information for
such fiscal year as is reasonably available to the Trustee which may be
necessary or useful in determining the amount of taxable income from the
Liquidating Trust that such Beneficiary may be required to include in his
federal income tax return for such year. Such report shall also describe the
changes in the Liquidating Trust's assets during the period and the actions
taken by the Trustee during the period. The financial statements contained in
such report shall be prepared in accordance with generally accepted accounting
principles, but need not be audited by an independent public accountant. In
addition, after receipt of a request in good faith, or in their discretion
without such request, the Trustee may furnish to any person who has been a
Beneficiary at any time during the fiscal year preceding the then current fiscal
year a statement containing such further information as is reasonably available
to the Trustee which may be helpful to such person for federal, state or local
income tax purposes. The Trustee shall file returns as a grantor trust pursuant
to U.S. Treasury Regulation Section 1.671-4(a).
5.10 INTERIM REPORTS TO BENEFICIARIES. During the course of a fiscal
year, whenever a material event relating to the Liquidating Trust's assets
occurs, the Trustee shall, within a reasonable period of time after such
occurrence, prepare and mail to the Beneficiaries a Current Report on Form 8-K
or an interim report describing such event. The occurrence of a material event
need not be reported on an interim report if an annual report pursuant to
Section 5.9 will be issued at approximately the same time that such interim
report would be issued and such annual report describes the material event as it
would be discussed in an interim report. The occurrence of a material event will
be determined solely by the Trustee. The Trustee shall mail a copy of each such
report concurrently to FGP.
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5.11 SEC FILINGS. The Trustee shall cause the Liquidating Trust to file
Annual Reports on Form 10-K and Current Reports on Form 8-K using the
Corporation's file number with the Securities and Exchange Commission; provided
that nothing herein shall prohibit or restrict FGP, after the Effective Time,
from causing the termination of the registration of the common stock of the
Corporation under the Securities Exchange Act of 1934, as amended.
ARTICLE VI.
POWERS AND LIMITATIONS OF THE TRUSTEE
6.1 LIMITATIONS ON TRUSTEE. The Trustee shall not at any time, on
behalf of the Liquidating Trust or the Beneficiaries, enter into or engage in
any business, except to the extent that the conduct of the business activities
is necessary to conserve or maintain the Liquidating Trust Estate, to resolve,
contest, settle, satisfy or discharge the Liabilities, and to facilitate
expeditious liquidation of the Liquidating Trust Estate. The Trustee shall have
no power to invest or reinvest any of the funds held in the Liquidating Trust
Estate, except that the Trustee, or its affiliated investment advisor, may, on a
temporary basis or for purposes of retaining a reasonable amount of property to
meet expenses, obligations, claims and contingent liabilities, invest any
portion of the Liquidating Trust Estate in demand and time deposits at savings
institutions, investment grade commercial paper, short-term certificates of
deposit or Treasury bills, securities with short-term original or remaining
maturities issued by state or local governments (or agencies or
instrumentalities thereof), or AAA rated money market funds if, in the opinion
of nationally recognized tax counsel to the Liquidating Trust, such investment
would not cause the Liquidating Trust to fail to qualify as a liquidating trust
for U.S. federal tax purposes. The Trustee shall be restricted to the holding
and collection of the Liquidating Trust Estate, to the payment and distribution
thereof for the purposes set forth in this Agreement and to the conservation and
protection of the Liquidating Trust Estate and the administration thereof in
accordance with the provisions of this Agreement. The Trustee shall not be under
any duty to reinvest such part of the Liquidating Trust Estate as may be in
cash, or as may be converted into cash, nor shall the Trustee be chargeable with
interest thereon except to the extent that interest may be paid to the Trustee
on such cash amounts. In no event shall the Trustee receive any property, make
any distribution, satisfy or discharge any obligation, claim, liability or
expense or otherwise take any action which is inconsistent with a complete
liquidation of the Liquidating Trust.
6.2 SPECIFIC POWERS OF TRUSTEE. Subject to the provisions herein, the
Trustee shall have the following specific powers in addition to any powers
conferred upon it by any other Section or provision of this Agreement of Trust;
provided, however, that 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 or
to act in such a manner as the Trustee may deem necessary or appropriate to
carry out the purpose of the Liquidating Trust or to confer on the Beneficiaries
the benefits intended to be conferred upon them by this Agreement.
(a) To determine the terms on which assets comprising the
Liquidating Trust Estate should be sold or otherwise disposed of and to cause
the sale of such assets;
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(b) To collect and receive any and all money and other
property of whatsoever kind or nature due to or owing or belonging to the
Liquidating Trust and to give full discharge and acquittance therefor;
(c) Pending sale or other disposition or distribution, to
retain all or any assets constituting part of the Liquidating Trust Estate;
(d) To retain and set aside such funds of the Liquidating
Trust Estate as the Trustee shall deem necessary or expedient to pay or provide
for the payment of (i) unpaid claims, liabilities, debts or other obligations of
the Liquidating Trust, (ii) contingencies, and (iii) the expenses of
administering the Liquidating Trust Estate;
(e) To do and perform any acts or things necessary or
appropriate to carry out the purpose of the Liquidating Trust, including acts or
things necessary or appropriate to maintain assets held by the Trustee pending
sale or other disposition thereof or distribution thereof to the Beneficiaries;
(f) To employ such agents and advisors (which may include the
Trustee, one or more of the Beneficiaries, or corporations or partnerships owned
or controlled by the Trustee or Beneficiaries (including Pacific Gulf Properties
Inc.) or former officers, employees, agents and property managers of Pacific
Gulf Properties Inc., (including, without limitation, the engagement of ▇▇.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ as a consultant to the Trustee with compensation as set forth on
Schedule E-1 hereto)), and to confer upon them such authority as the Trustee may
deem necessary, appropriate or expedient, and to pay reasonable compensation
therefor from the Liquidating Trust Estate; provided that any such agreements or
arrangements with a person or entity affiliated with the Trustee shall be on
terms no less favorable to the Liquidating Trust than those available to the
Liquidating Trust in similar agreements or arrangements with unaffiliated third
parties, and such agreements or arrangements shall be terminable, without
penalty, on 60 days' prior written notice by the Liquidating Trust;
(g) To cause any investments of the Liquidating Trust Estate
to be registered and held in the name of the Trustee or in the names of a
nominee or nominees without increase or decrease of liability with respect
thereto;
(h) To institute or defend actions or declaratory judgments or
other actions and to take such other action, in the name of the Liquidating
Trust or of the Corporation if otherwise required, as the Trustee may deem
necessary or desirable to enforce any instruments, contracts, agreements, or
causes of action relating to or forming a part of the Liquidating Trust Estate;
(i) To cancel, terminate, or amend any instruments, contracts,
or agreements relating to or forming a part of the Liquidating Trust Estate, and
to execute new instruments, contracts or agreements, notwithstanding that the
terms of any such instruments, contracts, or agreements may extend beyond the
terms of the Liquidating Trust, provided that no such new instrument, contract
or agreement shall permit the Trustee to engage in any activity prohibited
hereunder;
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(j) In the event any of the property which is or may become a
part of the Liquidating Trust Estate is situated in any state or other
jurisdiction in which the Trustee is not qualified to act as Trustee, to
nominate and appoint an individual or corporate trustee qualified to act in such
state or other jurisdiction in connection with the property situated in that
state or other jurisdiction as a trustee of such property and require from such
trustee such security as may be designated by the Trustee. The trustee so
appointed shall have all the rights, powers, privileges and duties and shall be
subject to the conditions and limitations of this Liquidating Trust, except as
limited by the Trustee and except where the same may be modified by the laws of
such state or other jurisdiction (in which case, the laws of the state or other
jurisdiction in which such trustee is acting shall prevail to the extent
necessary). Such trustee shall be answerable to the Trustee herein appointed for
all monies, assets and other property which may be received by it in connection
with the administration of such property. The Trustee hereunder may remove such
trustee, with or without cause, and appoint a successor trustee at any time by
the execution by the Trustee of a written instrument declaring such trustee
removed from office, and specifying the effective date of removal;
(k) To perform any act authorized, permitted, or required
under any instrument, contract, agreement, or cause of action relating to or
forming a part of the Liquidating Trust Estate, 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;
(l) To contest, defend, settle and compromise any and all
claims, suits or other actions that are or may be brought by or against the
Liquidating Trust or the Trustee relating to the Assets, the Liquidating Trust,
the Trustee or Liquidating Trust Estate; and
(m) To initiate and seek judicial approvals and other relief
under trustee instruction court proceedings as available under Minnesota
Statutes ss. 501B.16-23, regarding administration of the Liquidating Trust and
the Liquidating Trust Estate.
ARTICLE VII.
TRUSTEE
7.1 GENERALLY. The Trustee accepts and undertakes to discharge the
Liquidating Trust created by this Agreement, upon the terms and conditions
thereof. The Trustee shall not be subject to any personal liability whatsoever
to any person in connection with the Liquidating Trust Estate or the affairs of
this Liquidating Trust, except for its own misconduct knowingly and
intentionally committed in bad faith. No provision of this Agreement shall be
construed to relieve the Trustee from liability for its own misconduct knowingly
and intentionally committed in bad faith, except that:
(a) The Trustee shall not be required to perform any duties or
obligations except for the performance of such duties and obligations as are
specifically set forth in this Agreement, and no implied covenants or
obligations shall be read into this Agreement against the Trustee.
14
(b) In the absence of bad faith on the part of the Trustee,
the Trustee may conclusively rely, as to the truth, accuracy and completeness
thereof, on the statements and certificates or opinions furnished to the Trustee
and conforming to the requirements of this Agreement.
(c) The Trustee shall not be liable for any error of judgment
made in good faith.
(d) The Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in accordance with (i) a written opinion of
legal counsel addressed to the Trustee or (ii) the direction of Beneficiaries
having aggregate Beneficial Interests of more than 66.7% of all Beneficial
Interests relating to the exercise by the Trustee of any trust or power
conferred upon the Trustee under this Agreement.
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.
(b) The Trustee may consult with legal counsel to be selected
by it, and the Trustee shall not be liable for any action taken or suffered by
it in accordance with the advice of such counsel.
(c) Persons dealing with the Trustee shall look only to the
Liquidating Trust Estate to satisfy any liability incurred by the Trustee in
good faith to any such person in carrying out the terms of this Liquidating
Trust, and the Trustee shall have no personal or individual obligation to
satisfy any such liability.
7.3 INDEMNIFICATION OF TRUSTEE. The Trustee shall be indemnified by and
receive reimbursement from the Liquidating Trust Estate against and from any and
all claims, losses, liabilities or damages which such Trustee may incur or
sustain, in the good faith exercise and performance of any of the powers and
duties of such Trustee under this Agreement; however, no party other than the
Trustee shall have the right to cause the Liquidating Trust to indemnify the
Trustee. The Trustee shall purchase with assets of the Liquidating Trust Estate,
such insurance as it determines, in the exercise of its discretion, adequately
insures that it shall be indemnified against any such loss, liability or damage
pursuant to this Section.
7.4 NO DUTY NOT TO COMPETE. The Trustee, in its individual capacity or
through corporations, partnerships or other entities which it controls or in
which it has an interest, may engage in or possess any interest in any business
venture, including, but not limited to, the ownership, financing, management of
real property, or the investment of securities, or the provision of any services
in connection with such activities, whether or not in competition with any part
of the Liquidating Trust Estate. The Trustee has no duty to present any business
opportunity to the Liquidating Trust before taking advantage of such opportunity
either in its individual capacity or through participation in any entity.
15
ARTICLE VIII.
PROTECTION OF PERSONS DEALING
WITH THE TRUSTEE
8.1 ACTION BY TRUSTEE. Except as otherwise provided by resolution
adopted or approved by the Trustee, all action with respect to the disposition
and distribution of the Liquidating Trust Estate required or permitted to be
taken by the Trustee, in its capacity as Trustee, may be taken by approval,
consent, vote or resolution authorized by the Trustee then serving.
8.2 RELIANCE ON STATEMENT BY TRUSTEE. Any person dealing with the
Trustee shall be fully protected in relying upon the Trustee's certificate
signed by the Trustee that the Trustee has authority to take any action under
this Liquidating Trust. Any person dealing with the Trustee shall be fully
protected in relying upon the Trustee's certificate setting forth the facts
concerning the calling of any meeting of the Beneficiaries, the giving of notice
thereof, and the action taken at such meeting, including the aggregate
Beneficial Interests of Beneficiaries taking such action.
8.3 APPLICATION OF MONEY PAID OR TRANSFERRED TO TRUSTEE. No person
dealing with the Trustee shall be required to follow the application by the
Trustee of any money or property which may be paid or transferred to the
Trustee.
ARTICLE IX.
COMPENSATION OF TRUSTEE
9.1 AMOUNT OF COMPENSATION. In lieu of commissions or other
compensation fixed by law for Trustee, the Trustee shall receive as compensation
for its services as Trustee hereunder while it is serving as Trustee the amounts
set forth in Schedule E attached hereto, or such different compensation proposed
by the Trustee as may subsequently be approved by Beneficiaries having aggregate
Beneficial Interests of more than 66.7% of all Beneficial Interests.
9.2 EXPENSES. The Trustee shall be reimbursed from the Liquidating
Trust Estate for all out-of-pocket expenses reasonably incurred by it or any of
its affiliates in the performance of its duties in accordance with this
Agreement, including the payment of reasonable fees and/or expenses to agents,
advisors or legal counsel.
ARTICLE X.
TRUSTEE AND SUCCESSOR
TRUSTEE
10.1 NUMBER 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 the Liquidating Trust.
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10.2 RESIGNATION AND REMOVAL. The Trustee may resign and be discharged
from the Liquidating Trust hereby created by delivering at least thirty (30)
days prior written notice to each Beneficiary; provided that such resignation
shall not become effective until a qualified successor Trustee has been
appointed hereunder under Section 10.3 and such successor has accepted its
appointment in writing delivered to the resigning Trustee under Section 10.4.
Any Trustee may be removed at any time, with or without cause, by Beneficiaries
having aggregate Beneficial Interests of more than 66.7% of all Beneficial
Interests.
10.3 APPOINTMENT OF SUCCESSOR. If at any time the Trustee shall resign
or be removed, or die or become incapable of action, or be adjudged a bankrupt
or insolvent, a vacancy shall be deemed to exist and a successor may be
appointed by Beneficiaries having aggregate Beneficial Interests of more than
67% of all Beneficial Interests. If such vacancy is not so filled by the
Beneficiaries within 60 days, the resigning Trustee may apply to a court of
competent jurisdiction for an order of such court appointing a qualified
successor Trustee.
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 the
Beneficiaries in the next report delivered to the Beneficiaries pursuant to
Article V hereof and, in the case of a resignation, to the resigning Trustee.
Thereupon such successor trustee shall, without any further act, become vested
with all the estate, properties, rights, powers, trusts, and duties of his
predecessor in the Liquidating Trust hereunder with like effect as if originally
named therein, but the retiring 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 upon the trust
herein expressed, all of the estates, properties, rights, powers and trusts of
such retiring Trustee, and shall duly assign, transfer, and deliver to such
successor trustee all property and money held by him hereunder.
10.5 BONDS. No bond shall be required of the original Trustee
hereunder. Unless required by the remaining Trustee(s) or a vote of the
Beneficiaries holding in the aggregate more than 66.7% of all Beneficial
Interests prior to a successor trustee's acceptance of an appointment as such
pursuant to Section 10.4, or unless a bond is required by law, 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 or unless required by the Beneficiaries (in the case of a successor
trustee). If a bond is required by a vote of the Beneficiaries holding in the
aggregate more than 66.7% of all Beneficial Interests, the Beneficiaries shall
determine whether, and to what extent, a surety or security with respect to such
bond shall be required.
ARTICLE XI.
CONCERNING THE BENEFICIARIES
11.1 EVIDENCE OF ACTION BY BENEFICIARIES. Whenever in this Agreement it
is provided that the Beneficiaries may take any action (including any vote, 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
17
taking any such action, such holders have joined therein may be evidenced (i) by
any instrument or any number of instruments of similar tenor executed by the
Beneficiaries in person or by agent or attorney appointed in writing, or (ii) by
the record of a meeting of the Beneficiaries duly called and held in accordance
with the provisions of Article XII.
11.2 LIMITATIONS ON SUITS BY BENEFICIARIES. No Beneficiary shall have
any right by virtue of any provision in this Agreement to institute any action
or proceeding at law or in equity against any party other than the Trustee, upon
or under or with respect to the Liquidating Trust Estate or any agreements
relating to or forming parts of the Liquidating Trust Estate, 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, that the provisions of this Section shall not apply to any suit by the
Trustee, and such undertaking shall not be required from the Trustee or
otherwise required in any suit by any Beneficiary or group of Beneficiaries
having aggregate Beneficial Interests of more than 66.7% of all Beneficial
Interests.
11.4 DISCLOSURE OF BENEFICIARIES. If requested in writing by a
Beneficiary, the Trustee shall deliver a list of the Beneficiaries (reflecting
names and addresses as shown on the records of the Trustee) and the share of
each Beneficiary in the Liquidating Trust Estate) of the Trust to such
Beneficiary.
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
Beneficiaries having specified aggregate Beneficial Interests to take either
acting alone or with the Trustee.
12.2 MEETING CALLED BY TRUSTEE. The Trustee then serving may at any
time call a meeting of the Beneficiaries to be held at such time and at such
place within or outside the State of New York as the Trustee shall determine.
Written notice of every meeting of the Beneficiaries shall be given by the
Trustee (or the Beneficiaries as provided in Section 12.3), which written notice
will set forth the time and place of such meeting and in general terms the
action proposed to be taken at such meeting and shall be mailed not more than 60
nor less than 10 days before such meeting is to be held to all of the
Beneficiaries of record not more than 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 Trustee.
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12.3 MEETING CALLED ON REQUEST OF BENEFICIARIES. Within 30 days after
written request to the Trustee by Beneficiaries having aggregate Beneficial
Interests of 10% or more of all Beneficial Interests to call a meeting of all
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 30-day period then such meeting may be called by
the Beneficiaries having aggregate Beneficial Interests of 10% or more of all
Beneficial Interests or by their designated representative.
12.4 PERSONS ENTITLED TO VOTE AT MEETING OF BENEFICIARIES. Each
Beneficiary retaining rights to distributions from the Liquidating Trust Estate
on the record date shall be entitled to vote at a meeting of the Beneficiaries
either in person or by his proxy duly authorized in writing. 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 having aggregate Beneficial Interests sufficient to take action on
any matter for the transaction of which such meeting was called shall be
necessary to constitute a quorum, but if less than a quorum be present,
Beneficiaries having aggregate Beneficial Interests of more than 66.7% of the
aggregate Beneficial Interests 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. Any meeting of Beneficiaries at which a
quorum is present 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 resolution submitted to any
meeting of Beneficiaries shall be by written ballot. The Chairman of the meeting
shall count all votes cast at the meeting for or against any resolution and
shall make and file with the Secretary of the meeting his verified written
report.
12.8 RECORD OF MEETING. A record of the proceedings of each meeting of
Beneficiaries shall be prepared by the Secretary of the meeting. The record
shall be signed and verified by the Secretary of the meeting and shall be
delivered to the Trustee to be preserved by them. Any record so signed and
verified shall be conclusive evidence of all the matters therein stated.
12.9 ACTION WITHOUT A MEETING. Any action may be taken by the
Beneficiaries without a meeting, without prior notice and without a vote, if a
consent in writing, setting forth the action so taken, shall be signed by
Beneficiaries having aggregate Beneficial Interests not less than the percentage
that would be necessary to authorize or take such action at a meeting at which
all Beneficiaries were present.
12.10 WAIVER OF NOTICE. Whenever notice is required to be given under
this Article, a written waiver thereof, signed by the person entitled to notice,
whether before or after
19
the time stated in such Article for such notice, shall be deemed equivalent to
notice. Attendance of a person at a meeting shall constitute a waiver of notice
of such meeting. Neither the business to be transacted at, nor the purpose of,
any meeting of Beneficiaries need be specified in any written waiver of notice.
12.11 REQUIRED VOTE. Unless specified elsewhere in this Agreement, a
vote of Beneficiaries holding aggregate Beneficial Interests of more than 66.7%
of all Beneficial Interests is required to approve of any action or proposal
submitted to the Beneficiaries for a vote at a meeting.
ARTICLE XIII.
AMENDMENTS; OTHER RIGHTS
13.1 CONSENT OF BENEFICIARIES. At the direction or with the consent
(evidenced in the manner provided in Section 11.1) of Beneficiaries having
aggregate Beneficial Interests of more than 66.7% of all Beneficial Interests,
the Trustee shall promptly make and execute a declaration amending this
Agreement for the purpose of adding any provisions to or changing in any manner
or eliminating any of the provisions of this Agreement or amendments hereto,
provided, however, that no such amendment shall permit the Trustee to engage in
any activity prohibited hereunder or affect the Beneficiaries' rights to receive
their pro rata shares of the Liquidating Trust Estate at the time of
distribution or otherwise materially and adversely affect the rights of the
Beneficiaries and further provided, that no amendment hereto adverse to the
rights of the Trustee shall be effective unless expressly approved in writing by
the Trustee. In addition to any amendments otherwise authorized herein, this
Agreement may be amended from time to time by the Trustee, without the consent
of any of the Beneficiaries, (i) to add to the representations, duties or
obligations of the Trustee or surrender any right or power granted to the
Trustee herein; and (ii) to cure any ambiguity, to correct or supplement any
provision herein which may be inconsistent with any other provision herein, or
to make any other provisions with respect to matters or questions arising under
this Agreement which will not be inconsistent with the provisions of this
Agreement; provided, however, that no amendment shall be adopted pursuant to
this Section 13.1 unless the adoption thereof (1) is for the benefit of or not
adverse to the interests of the Beneficiaries; and (2) does not alter the
interest of a Beneficiary in any way without the consent of the Beneficiaries
adversely affected thereby.
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 shall thereafter be determined,
exercised, and enforced hereunder subject in all respects to such modification
and amendment, and all the terms and conditions of any such amendment shall be
thereby deemed to be part of the terms and conditions of this Agreement for any
and all purposes.
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13.3 RIGHTS OF THE CORPORATION. The Corporation and its
successors-in-interest, including FGP, shall have the right to enforce the terms
of the Trust at law and equity. Furthermore, notwithstanding anything to the
contrary contained in this Article XIII, unless the Merger Agreement is
terminated in accordance with the terms thereof, no amendment to this Agreement
that materially and adversely affects the rights or interests of FGP hereunder
may be made unless consented to in writing by FGP.
ARTICLE XIV.
LIABILITY ADMINISTRATION
14.1 CERTAIN PROCEDURES. The Trustee shall act in accordance with the
following procedures:
(a) To facilitate the administration and disposition of Liabilities
pursuant to this Agreement the Corporation shall deliver, or make readily
available from time to time, to the Trustee copies of the records, files and
documents in the possession of the Corporation which are related to the Assets,
the Liabilities assumed hereunder or the Merger Agreement.
(b) When administering Liabilities involving claims or legal actions
against the Assets, the Trustee shall observe, subject to the other applicable
provisions of this Agreement, the following procedures:
(i) Asserted Liability: The Trustee will review and
analyze each Asserted Liability and determine whether
to accept and pay or to dispute and contest the
Liability based upon the Trustee's determination of
the Liability's legal validity (whether the claim as
asserted is legally enforceable) and amount (whether
correct and due); and
(ii) Litigation Liability: The Trustee will contest and
defend each Litigation Liability to final judgment,
and contest each disputed indemnity claim for Losses
to final resolution under Section 5.4(b)(iii) hereof,
including appropriate appeals, or settle as an
appropriate resolution of the Litigation Liability or
the indemnity claim for Losses, as it may determine
in its discretion to be in the best interests of the
Beneficiaries, but subject to the requirements of
this Agreement.
(c) In determining whether to contest or settle any Asserted Liability
or Litigation Liability, the Trustee shall consider, among other things, the
following criteria:
(i) Cost of defense (including, without limitation, all
legal fees and expenses attributable to such
Liability and defense of a legal action seeking to
enforce such Liability) and whether any insurance
coverage is available to the Liquidating Trust on
account of such Liability) compared to the amount of
the Asserted Liability;
21
(ii) Likelihood of the Liability claimant prevailing under
the asserted legal theory or cause of action and then
known facts (including proof considerations);
(iii) Precedential effect on administration of other
Liabilities or potential Liabilities claiming against
the Assets; and
(iv) Whether the amount of the Liability is or is not
supported by known facts regarding actual damages.
(d) In evaluating whether to contest or settle, the Trustee shall apply
the reasonable business judgment rule (i.e., the Trustee would be responsible
for diligent identification of the legal issues, factual considerations and
related risks and uncertainties presented by the Asserted Liability or
Litigation Liability, relying on advice and evaluations of legal counsel, which
may include counsel retained by Corporation prior to the creation of the Trust
to defend such Liability, and other professional advisors or consultants), and
then exercising reasonable judgment after consideration of all relevant factors
and information. In the selection of legal counsel for any matter, the Trustee
shall consider the amount and complexity of the matter in relation to the
appropriate experience, resources, reputation and fees and costs of selected
counsel; provided, however, that if insurance coverage is available to the
Liquidating Trust on account of such Liability, the Trustee shall have the right
to accept counsel selected by any insurer which undertakes the defense of such
Liability.
(e) The Trustee shall have the right to defend any Liability claim or
legal action against the Trust and may assert counterclaims in such actions, and
upon advice of counsel, the Trustee may initiate any legal proceeding against a
third party regarding any Liability. In any action taken by the Trustee, the
Trustee shall be deemed to represent the interests of all of the Beneficiaries,
and it shall not be necessary to make any Beneficiary a party to such action. It
is understood that in representing the interests of any such Beneficiary, the
Trustee is authorized only to represent such Beneficiary in its or that person's
capacity as a Beneficiary hereunder and not in any other capacity. The Trustee
may file such proofs of claim and other papers as may be necessary or
appropriate in order to have the claims of the Trustee or Beneficiaries allowed
in any judicial proceeding.
(f) Whenever the Trustee, after consultation with counsel, consultants
or other professional advisors, determines that there is a reasonable prospect
that the Liquidating Trust Estate will not be sufficient to satisfy all
outstanding Liabilities and reasonably anticipated Liabilities and the
compensation and expenses of the Trustee, the Trustee may issue, by written
notice to all Beneficiaries, a Determination of Anticipated Insolvency, based
upon the Trustee's assessment of available information. The Trustee may also
revoke, by written notice to all Beneficiaries, any such Determination at any
time if it determines that certain facts or circumstances, material to its
previous determination, have changed. Notwithstanding anything to the contrary
in this Agreement, upon notice of a Determination of Anticipated Insolvency, and
so long as such Determination has not been revoked by the Trustee, no payments
shall be made by the Trustee in respect of Liabilities.
22
ARTICLE XV.
MISCELLANEOUS PROVISIONS
15.1 FILING DOCUMENTS. The Trustee, in its discretion, may elect to
file or record this Agreement in the office of the Recorder of Deeds of Orange
County, California, and in such other office or offices as the Trustee may
determine to be necessary or desirable. A copy of this Agreement and all
amendments thereof shall be available at all reasonable times for inspection by
any Beneficiary or his duly authorized representative at ▇▇▇▇▇ Fargo Bank
Minnesota, National Association, Customized Fiduciary Services, MAC ▇▇▇▇▇-▇▇▇,
▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇ (or the
address of any successor trustee, which address shall be inserted herein at the
time of such succession). 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, if any, where the original
Agreement is filed or recorded.
15.2 INTENTION OF PARTIES TO ESTABLISH LIQUIDATING TRUST; FEDERAL
INCOME TAX INTENTIONS. This Agreement is not intended to create and shall not be
interpreted as creating an association, partnership, corporation or joint
venture of any kind. It is intended as a trust to be governed and construed in
all respects as a trust. It is intended that the Liquidating Trust be classified
for federal income tax purposes as a "liquidating trust" within the meaning of
U.S. Treasury Regulation ss. 301.7701-4(d). The Beneficiaries are intended to be
treated for federal income tax purposes as having received the Assets from the
Corporation and then as having contributed the Assets to the Liquidating Trust ,
and such transfer of the Assets is intended to be treated as a distribution to
the shareholders of the Corporation pursuant to the Corporation's plan of
complete liquidation. The Beneficiaries will be treated as the grantors and
deemed owners of the Liquidating Trust and they will be treated for federal
income tax purposes as owning undivided interests in its assets.
15.3 TAX WITHHOLDING. The Trustee may withhold from any amount held on
behalf of or distributable from the Trust at any time to any Beneficiary, and
may deposit such amounts withheld with the applicable taxing authority, such sum
or sums as the Trustee determines are required by law to be withheld in respect
of any taxes or other charges with respect to such Beneficiary. The Trustee may
require any Beneficiary to provide, in the manner required by the Trustee, such
information that the Trustee determines is required to satisfy the Trustee's
obligations under applicable tax law, and the Trustee may condition any
distribution to any Beneficiary upon compliance with such requirement. Amounts
withheld pursuant to this Section 15.3 with respect to a Beneficiary shall be
treated as having been distributed to such Beneficiary for purposes of
determining the distributions which such Beneficiary has received and is
entitled to receive hereunder.
15.4 LAWS AS TO CONSTRUCTION. The validity, interpretation,
construction and performance of this Agreement and disputes and controversies
arising with respect to the transactions contemplated herein shall be governed
by the laws of the State of New York, irrespective of New York's choice-of-law
principles that would apply the law of any other
23
jurisdiction, and the Corporation, the Trustee and the Corporation Shareholders
consent and agree that this Agreement shall be governed by and construed in
accordance with such laws.
15.5 SEPARABILITY. 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.
15.6 NOTICES. Any notice or other communication by the Trustee to any
Beneficiary shall be deemed to have been sufficiently given, for all purposes,
if given by U.S. mail addressed to such person at his address as shown in the
records of the Trustee.
15.7 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.
15.8 ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties hereto.
24
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, sealed and acknowledged, effective this 23rd day of August, 2001.
TRUSTEE:
▇▇▇▇▇ FARGO BANK MINNESOTA,
NATIONAL ASSOCIATION
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
----------------------------
Its Vice President
----------------------------
PACIFIC GULF PROPERTIES INC.
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------
Its Executive Vice President
----------------------------
S-1
SCHEDULE A
ASSETS
1. City of Industry industrial property, together with related Purchase and
Sale Agreement and Joint Escrow Instructions, dated as of August 17, 2001
by and among Westcore Industrial Properties AC, LLC and the Corporation.
Legal Description of such property is included in such Purchase and Sale
Agreement and Joint Escrow Instructions.
2. Sacramento industrial property, together with related Purchase and Sale
Agreement and Joint Escrow Instructions, dated as of August 15, 2001 by and
among PGP Partners, Inc. and the Corporation. Legal Description of such
property is included in such Purchase and Sale Agreement and Joint Escrow
Instructions.
3. Wire Transfer of $13,256,330.32.
4. All rights, titles and obligations of the Corporation under that certain
Amended and Restated Management Agreement among FGP Partners, Inc., and the
Corporation, dated as of August 22, 2001.
5. Each permit, contract, lease and other right or agreement (including the
back rents as set forth in the attached document) of the Corporation
pertaining to either of the properties referred to in items 1 or 2 above.
6. All rights, titles, interests and obligations of the Liquidating Trust
under that certain Letter Agreement, dated as of August 22, 2001, by and
among the Corporation, FGP and the Liquidating Trust (the "Letter
Agreement").
7. Certified Corporation Shareholder List, as well as a DTC list, each of
which shall be delivered as promptly as possible to the Trustee.
8. The rights of the Liquidating Trust under all insurance policies as to
which the Liquidating Trust is an insured or an additional insured.
SCHEDULE B
PURCHASE AGREEMENT LIABILITIES
The obligation of the Corporation and FGP with respect to claims by the
purchasers against the Corporation or FGP under those certain purchase and sale
agreements for the 611 Cerritos, Daisy 7, Mountain Avenue, Geneva (Phoenix),
Sacramento, City of Industry and Sunnyvale real properties (copies of such
agreements have been delivered to the Trustee).
SCHEDULE B-1
OTHER LIABILITIES
1. All obligations owing from the Liquidating Trust to the Corporation or FGP
under the Letter Agreement.
SCHEDULE C
POST-MERGER ADJUSTMENTS
The obligations to make the payments, if any, required under Section 4.2(c),
Section 4.3(a) or Section 4.3(b)(i) of the Merger Agreement.
SCHEDULE D
TRANSFER DOCUMENTS
1. Deed of Trust with respect to City of Industry Property
2. Deed of Trust with respect to Sacramento Property
3. Assignment and Assumption regarding PGP Partners Management Agreement
4. Letter Agreement
SCHEDULE E
TRUSTEE COMPENSATION
1. $10,000 payable upon execution of the liquidating trust agreement.
2. $100,000 payable with respect to the fiscal year ending , 2001 ("Year
One").
3. $60,000 payable with respect to each fiscal year following Year One (the
"Subsequent Years"), such payment to be made .
4. With respect to Year One, hourly fees for each work hour, to the extent in
excess of 200 such work hours, of the Trustee billable or allocable to the
Liquidating Trust in accordance with the following hourly rates: Senior
Account Manager: $175.00, Account Manager: $150.00, Account Representative:
$90.00, and Administrative Assistant $75.00.
5. With respect to each Subsequent Year, hourly fees for each work hour, to
the extent in excess of 125 such work hours in any Subsequent Year, of the
Trustee billable or allocable to the Liquidating Trust, in accordance with
the following hourly rates: Senior Account Manager $175.00, Account
Manager: $150.00, Account Representative: $90.00, and Administrative
Assistant: $75.00.
6. Annual Fees for cash management, if any, shall be determined as follows:
0.20% on the first $25,000,000 of assets, 0.15% on the next $25,000,000 and
0.10% on the remaining balance.
7. The following Registrar, Transfer and Paying Agent Fees:
Receipt of Certified Creditors List (Electronic Format) $2.50/Holder
Reconcilement of All Disbursement Checks Issued and
Presented $50.00/month
IRS Form 1065 (K-1) Reporting to Creditors $4.00/Form
IRS Form 1099 Reporting to Creditors, if applicable $2.50/Form
Out-of-Pocket Expenses Billed at Cost
Transfer and Paying Agent Services
Per Holder account maintained per year $ 5.00
Per Certificate sent $ 5.00
Per Routine transfer $20.00
Per Restricted or rush transfer $75.00
Payment to Beneficiaries $ 3.75
Wire transfer of funds $25.00
Other payments as directed by Trustee $10.00
Check stop payment and reissue $25.00
SCHEDULE E-1
CONSULTANT COMPENSATION
$250 per hour
