Exhibit 99.1
SECOND AMENDED AND RESTATED TRUST AGREEMENT FOR THE
BENEFIT OF THE SHAREHOLDERS OF MEGA-C POWER CORPORATION
This Second Amended and Restated Trust Agreement for the Benefit of the
Shareholders of Mega-C Power Corporation (the "SAT Agreement"), dated as of this
21st day of November, 2006, by and between Axion Power International, Inc., as
grantor, Xxxxx Xxxxxx, as Trustee of the Trust for the Benefit of the
Shareholders of Mega-C Power Corporation (the "Shareholders Trust") and Xxxxxxx
X. Xxxxx, in his capacity as Chapter 11 Trustee for Mega-C Power Corporation
("Xxxxx" or "Chapter 11 Trustee"), is entered solely to facilitate the
implementation of (a) the Second Plan of Reorganization filed with the
Bankruptcy Court (as defined below) in the Bankruptcy Case (as defined below) on
November 1, 2006, for Mega-C Power Corporation Jointly Proposed by Xxxxxxx X.
Xxxxx, Chapter 11 Trustee, Axion Power International, Inc., Axion Power
Corporation; Xxxxxx Xxxxxxx, Xxxxxx Picirrilli, Canadian Consultants Bureau,
LLC, Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx,
Xxx Xxxxxx, Xxxx Xxxxxxx and Xxxxxx Xxxxxxxxx (the "Plan") that provides for
this amendment of the Shareholders Trust and the preservation and distribution
of Trust Assets (as defined below) by the Trustee, all for the benefit of the
holders of Allowed Equity Securities as defined in the Plan (collectively, the
"Beneficiaries"); and (b) the investigation, prosecution and/or compromise of
objections or other contests to Claims and Equity Securities, as well as
prosecution, settlement or waiver as the successor to and representative of the
Debtor's bankruptcy estate of any and all Litigation Claims, claims and causes
of action that are or become part of the Trust Assets pursuant to the Plan by
the Trustee, as successor to and representative of the Debtor's bankruptcy
estate in accordance with section 1123(b)(3)(B) of the United States Bankruptcy
Code, 11 U.S.C. ss.101-1330, as amended (the "Bankruptcy Code"), as required by
the Plan.(1)
WHEREAS, Axion Power International, Inc., formerly known as Tamboril
Cigar Company ("Axion"), as grantor, formed the Shareholders Trust pursuant to
the Trust Agreement for the Benefit of the Shareholders of Mega-C Power
Corporation dated December 31, 2003 (the "Trust Agreement"); and
WHEREAS, pursuant to a Succession Agreement Pursuant to the Provisions
of the Trust Agreement for the Benefit of the Shareholders of Mega-C Power
Corporation, dated March 24, 2004, Xxxxx Xxxxxx ("Xxxxxx") became the successor
Trustee of the Shareholders Trust and has continued to serve in that capacity
since; and
WHEREAS, on April 6, 2004, an involuntary petition for relief under
chapter 11 of the Bankruptcy Code was filed against Mega-C Power Corporation
("Debtor" or "Mega-C"), a Nevada corporation, in the United States Bankruptcy
Court for the District of Nevada ("Bankruptcy Court") as case number
BK-N-04-50962-GWZ (the "Bankruptcy Case"); and
WHEREAS, on May 13, 2004, the Bankruptcy Court entered an order
granting Debtor relief under chapter 11 of the Bankruptcy Code; and
WHEREAS, on February 26, 2005, Axion, as grantor, and Xxxxxx, as
trustee, executed the First Amended and Restated Trust Agreement for the Benefit
of the Shareholders of Mega-C Power Corporation (the "Amended Trust Agreement");
and
(1) Terms not otherwise defined in this SAT Agreement shall have the meanings as
provided for in the Plan.
WHEREAS, on March 2, 2005, the Bankruptcy Court entered its Order
Approving U.S. Trustee's Appointment of Chapter 11 Trustee, appointing Xxxxx as
the Chapter 11 Trustee of the Debtor's case; and
WHEREAS, on February 1, 2006, the Bankruptcy Court entered its Order
Approving Motion to Approve Settlement Agreement With Axion Et Al. Pursuant to
Fed. R. Bankr. Pro. 9019; and
WHEREAS, the Plan was confirmed by the Bankruptcy Court on November 8,
2006 in accordance with the Order Confirming Plan of Reorganization for Mega-C
Power Corporation Jointly Proposed by Xxxxxxx X. Xxxxx, Chapter 11 Trustee;
Axion Power International, Inc.; Axion Power Corporation; Xxxxxx Xxxxxxx, Xxxxxx
Picirrilli, Canadian Consultants Bureau, LLC, Xxxxx Xxxxx, Xxxxx Xxxxx, Xxxxxx
Xxxxxxx, Xxxxx Xxxxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxx, Xxxx Xxxxxxx and Xxxxxx
Xxxxxxxxx (the "Confirmation Order"); and
WHEREAS, the Plan and the Confirmation Order provide for this amendment
of the Shareholders Trust on the Effective Date; and
WHEREAS, the Trust Agreement and the Amended Trust Agreement expressly
provide for amendment at any time for the purpose of modifying the terms,
conditions, and provisions thereof or incorporating different terms, conditions
and provisions that are not inconsistent with the intent of the parties and
requested by Axion, as grantor, and Xxxxxx, as Trustee; and
WHEREAS, the Mega-C Liquidation Trust Agreement (the "Liquidation Trust
Agreement") was executed on the Effective Date, the Liquidation Trust was
created, and Xxxxxxx Xxxxxxx was appointed as the Liquidation Trust Trustee;
NOW, THEREFORE, in consideration thereof, the parties hereto agree as
follows:
ARTICLE I
ESTABLISHMENT OF TRUST
1.1 CREATION AND NAME. The Second Amended Shareholders Trust is hereby
created, in accordance with P. 6.4 ET SEQ. of the Plan, which supersedes,
replaces and amends the Trust Agreement and the Amended Trust Agreement, and
which is deemed effective on the Effective Date.
1.2 DECLARATION OF SECOND AMENDED SHAREHOLDERS TRUST. In order to
declare the terms and conditions of the Second Amended Shareholders Trust, and
in consideration of the Plan and the Confirmation Order under the Bankruptcy
Code, Axion, the Trustee and Chapter 11 Trustee have executed this SAT
Agreement, effective on the Effective Date of the Plan, as defined therein. The
Trustee on behalf of the Second Amended Shareholders Trust shall have and hold
all rights, title and interest in the Trust Assets; nevertheless, under and
subject to the obligations under the Plan, including the obligation to fund the
Liquidation Trust, and to make disbursements for the benefit of the holders of
Allowed Equity Securities of Mega-C.
1.3 PURPOSE OF SECOND AMENDED SHAREHOLDERS TRUST. The purpose of the
Second Amended Shareholders Trust is to hold and effectuate an orderly
distribution of the Trust Assets in accordance with the Plan, which includes
payment in full of all Allowed Unclassified Claims (including reserves for all
Unclassified Claims incurred but not yet Allowed) and Allowed Claims, and the
establishment of all Operating Reserves and Disputed Claims Reserves as required
by the Plan to assure payment of all Claims as required by the Plan and the
Confirmation Order; to distribute the Axion Settlement Shares to Axion on the
Effective Date; to investigate, prosecute and/or compromise objections or other
contests to Claims to cooperate in good faith with the Liquidation Trustee and
Equity Securities; to pursue, litigate, settle or waive, as a successor to and
representative of the Debtor's bankruptcy estate, any and all claims and causes
of action that are or become part of the Second Amended Shareholders Trust; and
to distribute in accordance with the Plan the Trust Assets to holders of Allowed
Equity Securities of the Debtor, with no objective or authority to engage in any
trade or business. In furtherance of these purposes, the Trustee shall be
responsible for transferring to the Liquidation Trust sufficient Plan Funding
Shares to meet the Liquidation Trust obligations as required by the Plan and
establishing the appropriate reserve accounts, and to perform all obligations
specified for the SAT Trustee under the Plan and this SAT Agreement. In the
event of any inconsistency between the recitation of the duties and powers of
the Trustee as set forth in the SAT Agreement and the Plan, the provisions of
the Plan shall govern.
1.4 ACCEPTANCE OF TRUST. The Trustee accepts the trust imposed by this
SAT Agreement and agrees to observe and perform that trust, on and subject to
the terms and conditions set forth in this SAT Agreement, until her successor is
appointed as provided herein as required by Section 6.2 of this SAT Agreement
and paragraph 6.4.2 of the Plan. Upon acceptance of appointment, the successor
trustee accepts the trust imposed by this SAT Agreement and agrees to observe
and perform that trust, on and subject to the terms and conditions set forth in
this SAT Agreement and the Plan.
ARTICLE II
DEFINITIONS
The capitalized terms used but not defined in this SAT Agreement shall
have the meanings given to them in the Plan.
2.1 AXION SETTLEMENT SHARES means the 2,127,500 shares of the Axion
Stock allocated from the Shareholder Trust to Axion pursuant to the Plan, minus
up to 627,500 shares required to fund the reasonably necessary fees and costs of
the Shareholder Trust up to the Effective Date.
2.2 BENEFICIARIES means those holders of Allowed Equity Securities of
Mega-C who are entitled to distributions of the Trust Assets pursuant to the
Plan.
2.3 TRUST BOARD means the board that is to be created pursuant to
paragraph 6.4.2 of the Plan for the purpose of selecting a successor trustee to
Xxxxxx and advising and/or directing the Trustee with respect to actions and
decisions affecting the Second Amended Shareholders Trust.
2.4 TRUST ASSETS include the following assets to be irrevocably
transferred to the Second Amended Shareholders Trust:
(a) the balance of the Plan Funding Shares after the funding
of the Liquidation Trust as provided for in paragraph 6.3 of the Plan for the
benefit of the Beneficiaries; and
(b) any Cash, Litigation Claims or Plan Funding Shares
delivered to the Liquidation Trust Trustee which remain after payment in full of
all Allowed Unclassified Claims, Effective Date cash conditions and Allowed
Priority Claims and Allowed General Unsecured Claims, and which shall be
delivered to the Second Amended Shareholders Trust for distribution, in
accordance with the Plan and P. 4.5 of the Liquidation Trust Agreement.
2.5 TRUST EXPENSES means all reasonable costs, expenses and fees
incurred or to be incurred (as estimated by the Trustee in consultation with the
Trust Board) by the Trustee in the administration of duties or as contemplated
pursuant to this SAT Agreement.
2.6 TRUSTEE means Xxxxxx and her successor, as selected by the Trust
Board.
ARTICLE III
DISTRIBUTION OF TRUST ASSETS
3.1 DISTRIBUTION TO AXION. On the Effective Date, the Trustee shall
distribute the Axion Settlement Shares to Axion.
3.2 DISTRIBUTION TO BENEFICIARIES. Only after payment of all Allowed
Unclassified Claims and Allowed Claims and the establishment of the Operating
Reserves and Disputed Claims Reserves by the Liquidation Trustee and
establishment of an Expense Reserve and a Disputed Interest Reserve by the
Trustee, shall distributions to Beneficiaries of Plan Funding Shares be made in
accordance with Articles 4, 5 6 and 8 of the Plan, in proportion to the
Beneficiaries' Allowed Equity Securities in the Debtor.
3.3 EXPENSE RESERVE. Before the Initial Distribution to Beneficiaries,
as defined in the Plan and pursuant to section 3.2 of this SAT Agreement, the
Trustee shall establish an expense reserve ("Expense Reserve") from the Trust
Assets for the payment of all reasonable administrative expenses, debts,
charges, liabilities and obligations with respect to the Second Amended
Shareholders Trust, including (i) all costs and expenses, including the payment
of professionals retained by the Trustee, incurred in connection with any
litigation, including the Litigation Claims and the objections to Disputed
Claims and Disputed Equity Securities; (ii) the Trustee's compensation as
provided in this SAT Agreement; (iii) all costs, expenses and/or reserves
incurred or set aside in connection with indemnifying the Trustee as provided in
this SAT Agreement and/or necessary to secure appropriate insurance with respect
to such obligations; (iv) all fees and expenses, including those of
professionals and other agents and employees retained by the Second Amended
Shareholders Trust, incurred in connection with the Trustee's duties and
obligations, including fees incurred in connection with holding, collecting
upon, liquidating, or otherwise disposing of the Trust Assets, all applicable
taxes and all expenses of effectuating distributions hereunder and under the
Plan; (v) all fees and expenses, including those of professionals and other
agents and employees retained by the Trustee, incurred in connection with
winding up the Second Amended Shareholders Trust, rendering accountings, and
storing and disposing of books, records and files; and (vi) all reasonable fees
and expenses of the Trust Board, including those of professionals and other
agents and employees retained by the Trust Board, as provided in this SAT
Agreement, but excluding any professionals, agent or employees retained by
individual members of the Trust Board. The fees, costs and expenses of
administering the Second Amended Shareholders Trust shall be satisfied in full
before final distribution of the Trust Assets to the Beneficiaries.
3.4 FUNDING THE EXPENSE RESERVE. The Expense Reserve shall be funded
from time to time by the Trustee out of the Trust Assets consisting of Plan
Funding Shares, the net proceeds of sale of Plan Funding Shares, or Cash
received from the Liquidation Trust. Any balance remaining in the Expense
Reserve after payment of all expenses, debts, charges, liabilities and
obligations of the Second Amended Shareholders Trust, shall be distributed to
Beneficiaries, as provided in section 3.2 of the SAT Agreement and the Plan. Any
monies deposited in the Expense Reserve shall be invested in interest-bearing
deposits or investments that satisfy the requirements of the Trustee's fiduciary
duties, and the interest earned shall be credited to the Expense Reserve.
3.5 INCREASE OF EXPENSE RESERVE. If at any time, the Trustee, in its
sole discretion, determines that the funds in the Expense Reserve are or may
become insufficient, the Trustee, in its sole discretion, may from time to time
add assets to the Expense Reserve in such amount or amounts as the Trustee, in
its sole discretion, determines to be necessary or advisable to satisfy all
current and anticipated obligations of the Second Amended Shareholders Trust. In
no event shall the Trustee be required to use personal funds or assets for such
purposes.
3.6 DISPUTED INTEREST RESERVE. If an Equity Security is disputed, the
Trustee will withhold an amount of Plan Funding Shares and thereby establish a
Disputed Interest Reserve, consisting of Plan Funding Shares equal to the
aggregate amount of Plan Funding Shares as provided for in the Plan that would
have been distributed on a Distribution Date on account of a Disputed Equity
Security or as otherwise provided by the Plan or the Final Order.
3.7 DELIVERY OF CERTIFICATES. As a condition to the distribution of
Plan Funding Shares from the Second Amended Shareholders Trust, each Equity
Security Holder must have an Allowed Equity Security. In addition, solely in
order to facilitate the distribution of Plan Funding Shares in consideration for
Allowed Equity Securities, Equity Security Holders who either attached to or
claimed in their proof of Equity Security that they possess Equity Securities,
shall be required to deliver their Stock Certificates to the Trustee. No
distribution of Plan Funding Shares shall be made to or on behalf of any such
Equity Security Holders unless and until the instrument evidencing their Equity
Securities is received by the Trustee, the unavailability of such instrument is
reasonably established to the satisfaction of the Trustee, or the Bankruptcy
Court orders a distribution despite the lack of a certificate. In the event any
Equity Security Holder seeks to establish the unavailability of a Stock
Certificate, the Trustee, shall, within thirty (30) business days after receipt
of the Equity Security Holder's evidence of unavailability and statement of
indemnity of the Trustee and the Second Amended Shareholders Trust (i) provide
the Equity Security Holder, in writing with a detailed description regarding the
non-acceptance of such evidence and statement of indemnity; or (ii) deliver to
the Equity Security Holder its Pro Rata share of Plan Funding Shares. Any such
Equity Security Holder who fails to deliver or cause to be delivered its Stock
Certificate, fails to execute and deliver an affidavit of loss and indemnity
reasonably satisfactory to the Trustee or fails to obtain a Final Order ordering
a distribution despite the lack of a Stock Certificate prior to the first
anniversary of the Effective Date, shall be deemed to have forfeited all rights
and claims with respect to such Equity Security and shall not participate in any
distribution under this SAT Agreement or the Plan, and all property in effect of
such forfeited distribution, shall be distributed to Allowed Equity Security
Holders as provided for in the Plan and this SAT Agreement. This delivery of
Share Certificates is not an exchange for Axion stock, but simply a means to
collect the cancelled Stock Certificates of the dissolved Debtor pursuant to
paragraph 5.2.3 of the Plan.
3.8 FRACTIONAL EQUITY SECURITIES. Notwithstanding any other provision
of the Plan or this SAT Agreement, no payments or distributions under or
pursuant to the Plan or on account of fractions of Plan Funding Shares will be
made on account of Allowed Equity Securities. When any distribution of or on
account of a fraction of any Plan Funding Shares to any holder of an Allowed
Equity Security would otherwise be required, the actual payment or distribution
will reflect a rounding of such fraction to the nearest whole number (up or
down).
3.9 MANNER OF DISTRIBUTIONS. All distributions to Beneficiaries to be
made by the Trustee from the Second Amended Shareholders Trust to its
Beneficiaries shall be made by first class United States mail, with postage
fully prepaid. Distributions are deemed made on the date of mailing.
3.10 ADDRESSES FOR DISTRIBUTIONS. Distributions to holders of Allowed
Equity Securities shall be made by the Trustee from the Second Amended
Shareholders Trust as follows: (i) at the addresses set forth on the proofs of
interest on file with the Bankruptcy Court, or at the last known address of such
holders if the Debtor or Xxxxx has been notified of a change of address; or (ii)
at the addresses set forth in any written notices of address changes delivered
to the Trustee. If any Beneficiary's distribution is returned as undeliverable,
no further distributions to such Beneficiary shall be made unless and until the
Trustee is notified by the Beneficiary of its then-current address, at which
time all missed distributions shall be made to such Beneficiary. Plan Funding
Shares in respect of undeliverable distributions shall be returned to the Second
Amended Shareholders Trust until such distributions are claimed. All claims for
undeliverable distributions shall be made on or before the second anniversary of
the Effective Date. After such date, all unclaimed Plan Funding Shares shall
revert to the Second Amended Shareholders Trust and the Interest of any holder
or successor to such holder with respect to such property shall be discharged
and forever barred notwithstanding any federal or state escheate laws to the
contrary. Nothing contained in the Plan or the SAT Agreement shall require the
Trustee to attempt to locate any holder of an Allowed Equity Security.
3.11 MODIFICATION OF TREATMENT. The Trustee has the right to modify the
treatment of any Allowed Equity Security in any manner adverse only to the
holder thereof upon the prior written consent obtained after the Effective Date
of the holder of the Allowed Equity Security whose treatment is being adversely
affected.
ARTICLE IV
TRUST ADMINISTRATION
4.1 CONSULTATION WITH THE TRUST BOARD. The Trustee shall regularly
consult with the Trust Board when carrying out the purposes of the SAT Agreement
and shall obtain approvals or recommendations of the Trust Board as required
under this SAT Agreement.
4.2 STATEMENTS. The Trustee shall maintain a record of the names and
addresses of all Equity Security Holders as of the Record Date for purposes of
mailing Distributions to them. The Trustee may rely on the name and address set
forth in the proofs of Equity Security regarding Equity Security Holders as of
the Record Date as being true and correct unless and until notified in writing
by the holder of the Equity Security Holder.
4.3 REPORTS. Beginning on the date that is no later than 90 days after
the Effective Date, and no later than 30 days at the end of each six month
period thereafter, the Trustee shall file with the Bankruptcy Court and serve on
the Office of the United States Trustee, the Liquidation Trustee, and any
Creditor or holder of an Equity Security who makes written request, a written
report and account showing (i) the assets, liabilities, receipts and
disbursements of the Second Amended Shareholders Trust at the end of the period
being reported; (ii) any changes in the Trust Assets or to the allowance of
Disputed Equity Security Interests which have not been previously reported;
(iii) a general description of the activities of the Second Amended Shareholders
Trust; (iv) the amount and calculation of net litigation recoveries received
during the period reported; (iv) the amount of compensation paid to the Trustee
for the period reported; and (v) any other information as the Trustee deems
appropriate for inclusion or as reasonably requested by parties to whom such
reports are to be submitted. The Trustee, as in its sole discretion deems
advisable, may submit similar reports for any interim period. In addition, the
Trustee shall [may?] establish and maintain a web site for the Second Amended
Shareholders Trust, which will contain the information set forth in this section
on the status the Second Amended Shareholders Trust, a copy of the Trustee's
most recent report, periodic reports from the Trust Board and any other
information the Trustee, in its discretion, and the Trust Board, in its
discretion, deem necessary or appropriate.
4.4 RECORD DATE. The Record Date for determining the Beneficiaries of
the Second Amended Shareholders Trust shall be the Bar Date. After the Record
Date, the Trustee and the Second Amended Shareholders Trust shall have no
obligation to recognize any transfer of any Equity Security Interest or the
right as a Beneficiary and shall be entitled instead to recognize, and deal
with, for all purposes under the Plan and this SAT Agreement, those
Beneficiaries existing as of the Effective Date.
4.5 TAX FILINGS AND NOTICES. The Trustee shall prepare and provide to,
or file with, the appropriate parties such notices, tax returns and other
filings, including all federal, state and local tax returns for the Shareholders
Trust and the Second Amended Shareholders Trust, as may be required under the
Internal Revenue Code, the Plan, or as may be required by applicable law of
other jurisdictions including, if required under applicable law, notices
required to report interest or dividend income. The Trustee shall, when
specifically requested by a Beneficiary in writing, provide such Beneficiary
with such tax information as is reasonably necessary for the preparation by such
Beneficiary of its income tax return.
4.6 COMPLIANCE WITH SECURITIES LAWS AND COOPERATION WITH AXION. The
Trustee shall file with the Securities and Exchange Commission and other
applicable federal and state governmental agencies the necessary reports and
other documents and take any other actions necessary to comply with United
States federal or state securities laws. The Trustee shall cooperate with Axion,
at Axion's expense, with respect to Axion's filings with the Securities and
Exchange Commission or any other federal and state governmental agencies.
4.7 AXION RIGHT OF FIRST REFUSAL.
Axion shall have a right of first refusal on any proposed disposition of Plan
Funding Shares by the Trustee that is neither an open market resale at
prevailing prices or effected in connection with an underwritten transaction
involving a sale to the general public. Provided however, the Trustee shall
consult with Axion from time to time regarding any anticipated disposition of
Plan Funding Shares so as not to necessarily negatively affect the value of
Axion shares in the public market, and at least thirty (30) days before a
disposition of more than 750,000 shares of Axion stock, notify Axion in writing
(the "Notice") of the Trustee's intention to dispose of more than 750,000 shares
of Axion stock in one transaction (or in multiple transactions if Trustee knows
or reasonably believes that the sales are to or for the benefit of a single
entity or multiple affiliated entities). The date of the Notice shall be the
"Notice Date." After the Notice Date, Axion may inform the Trustee that Axion
shall exercise its right to acquire all or a portion of the shares which are the
subject of the Notice only as follows:
(a) If the amount of shares referred to in the Notice is more than
750,000 but less than 1,000,000, Axion shall have the right to
advise the Trustee in writing within five (5) days of the
Notice Date of its commitment to buy all of said shares, and
Axion shall conclude for cash the share purchase transaction
within ten (10) days of the Notice Date.
(b) If the amount of shares referred to in the Notice is between
1,000,000 and 2,000,000, Axion shall have the right to advise
the Trustee in writing within ten (10) days of the Notice Date
of its commitment to buy all of said shares, and Axion shall
conclude for cash the share purchase transaction within
fifteen (15) days of the Notice Date.
(c) If the amount of shares referred to in the Notice is more than
2,000,000, Axion shall have the right to advise the Trustee in
writing within twenty (20) days of the Notice Date of its
commitment to buy all of said shares, and Axion shall conclude
for cash the share purchase transaction within twenty-five
(25) days of the Notice Date.
With each Notice, the Trustee shall provide Axion with the Trustee's best
estimate of the minimum and maximum consideration that the Trustee anticipates
receiving from the proposed disposition. As the condition to the exercise by
Axion of its right of first refusal, Axion agrees to pay the minimum
consideration that the Trustee estimates receiving from the proposed
disposition. If Axion does not timely exercise its right to purchase shares
described in a particular Notice as provided herein, then it shall have no
further rights to acquire the shares that are the subject of the Notice,
provided however, that the Trustee concludes the proposed disposition for no
less than the minimum consideration within 30 days of the last day Axion had to
exercise the right of first refusal or else the Plan Funding Shares the subject
of the Notice will be subject to a new right of first refusal as provided for
herein. If Axion exercises its right to purchase the shares described in a
particular Notice but fails to conclude the transaction within the time provided
herein, the sole remedy of the Trustee shall be the right to seek damages from
Axion for the difference between the exercise price and the proceeds ultimately
received by Trustee from the sale of said Axion shares.
4.8 RIGHT TO VOTE AXION SHARES. The Trustee shall proportionally have
the right to vote the shares of Plan Funding Shares held by the Second Amended
Shareholders Trust, whether or not held in a Disputed Equity Security Reserve,
in an amount equal to the lesser of the number of shares of Axion common stock
held by the Second Amended Shareholders Trust or number of shares of Axion
common stock held by the Founders and their spouses and dependents on the record
date for determining the identity of equity security holders entitled to vote at
any meeting of Axion's equity security holders.
ARTICLE V
GENERAL POWERS, RIGHTS AND OBLIGATIONS OF THE TRUSTEE
5.1 APPOINTMENT OF TRUSTEE. On the Effective Date, Xxxxxx and, upon
completion of the procedures described in the Plan and this SAT Agreement, her
successor, shall upon approval of the Bankruptcy Court become the Trustee of the
Second Amended Shareholders Trust.
5.2 LEGAL TITLE. The Trustee shall hold legal title to the Trust
Assets.
5.3 GENERAL POWERS. Except as otherwise provided in this SAT Agreement
or the Plan, and subject to the retained jurisdiction of the Bankruptcy Court as
provided in this SAT Agreement and the Plan, but without prior or further
authorization, the Trustee may control and exercise authority over the Trust
Assets, over the acquisition, management and disposition thereof and over the
management and conduct of the business and purposes of the Second Amended
Shareholders Trust, including objections to allowance of Claims and Equity
Security Interests and the prosecution of any and all litigation, to the same
extent as if the Trustee were the sole owner of the Trust Assets in its own
right. No person dealing with the Trustee shall be obligated to inquire into the
Trustee's authority in connection with the acquisition, management or
disposition of Trust Assets or the business and purposes of the Second Amended
Shareholders Trust.
In addition and except as expressly limited in the SAT Agreement, the
Plan or the Confirmation Order, the Trustee shall have the power to take any and
all actions as are necessary or advisable to effectuate the purposes of the
Second Amended Shareholders Trust, including, without limitation, the power and
authority:
(i) to accept the Trust Assets;
(ii) to distribute and withhold distribution of the Plan Funding
Shares in accordance with the terms of the Plan and this SAT
Agreement;
(iii) to sell, transfer or dispose of Plan Funding Shares as the
Trustee, in its discretion, deems necessary to fund and
satisfy the expenses of the Second Amended Shareholders Trust,
including the Expense Reserve and the Disputed Interest
Reserve in accordance with the Plan, upon consultation with
Axion prior to any anticipated disposition of Plan Funding
Shares so as not to necessarily negatively affect the value of
Axion shares in the public market;
(iv) to request that Axion file such amendments to the registration
statement for the Plan Funding Shares as may be necessary or
desirable under the circumstances;
(v) to investigate proofs of claim and proofs of interest filed as
of the Record Date and to object to or contest those proofs of
claim or interest the Trustee deems should be disallowed;
(vi) to defend the interests of those holders of Equity Securities
the Trustee determines should be Allowed Equity Securities;
(vii) to prosecute the Litigation Claims transferred from the
Liquidation Trust and objections to Claims and Equity Security
Interests;
(viii) to compromise the Litigation Claims transferred from the
Liquidation Trust and objections to Equity Security Interests
without notice and a hearing and without approval of the
Bankruptcy Court;
(ix) to sell, convey, transfer, assign, liquidate, collect or
abandon the Litigation Claims transferred from the Liquidation
Trust;
(x) to engage in all acts that would constitute ordinary course of
business in performing the obligations of a trustee under a
trust of this type;
(xi) to establish the funds, reserves and accounts within the
Second Amended Shareholders Trust as deemed by the Trustee, in
its discretion, to be useful in carrying out the purposes of
the Second Amended Shareholders Trust;
(xii) to xxx and be sued and to participate, as a party or
otherwise, in any judicial, administrative, arbitration or
other proceeding;
(xiii) in accordance with this SAT Agreement, to indemnify (and to
purchase insurance indemnifying) the Trustee, the Trust Board,
and the employees, agents and representatives of the Trust,
the Trustee and the Trust Board to the fullest extent that a
corporation organized under the laws of the state of Nevada is
from time to time entitled to indemnify its directors,
officers, employees, agents and representatives;
(xiv) subject to approval of the Bankruptcy Court, to delegate any
or all of the discretionary power and authority herein
conferred at any time with respect to all or any portion of
the Trust to any one or more reputable individuals or
recognized institutional advisors or investment managers
without liability for any action taken or omission made
because of such delegations, except for such liability as
provided in this SAT Agreement;
(xv) to consult with the Liquidation Trust Trustee at such time and
with respect to such issues relating to the conduct of the
Second Amended Shareholders Trust as the Trustee considers
appropriate;
(xvi) in connection with any Distribution to a minor, to transfer
and pay over all or any portion of the property to the minor,
or to a guardian of the minor's property, whenever appointed,
without requiring ancillary guardianship, or to the minor's
parent or the person with whom the minor resides, or to any
custodian under any Uniform Gifts to Minors Action or Uniform
Transfer to Minors Act, without any obligations to see to the
use or application of the Distributions or to make inquiry
with respect to any other property available for the use of
the minor, the receipt by such minor, guardian, parent, person
or custodian to be a complete discharge as to such transfer or
payment;
(xvii) to employ legal counsel, accountants, experts, brokers or
other professionals on a contingency basis or otherwise,
subject to Bankruptcy Court approval prior to the Effective
Date and thereafter without Bankruptcy Court approval;
(xviii) to exercise offsets as provided by law;
(xix) to estimate Equity Security Interests for the purposes of
Distribution, as the Trustee deems advisable;
(xx) to request that Axion register the Plan Funding Shares at
Axion's sole cost and expense;
(xxi) to cause any investments of Trust Assets to be registered and
held in the Trustee's name, as Trustee for the Second Amended
Shareholders Trust, or in the name of a nominee without
increase or decrease of liability with respect thereto;
(xxii) to seek such orders, judgments, injunctions and rulings, as
the Trustee deems necessary to carry out the intentions and
purposes of the Second Amended Shareholders Trust and to give
full effect to the provisions of the Plan;
(xxiii) consistent with the Plan, to perform any act authorized,
permitted or required under any instrument, contract,
agreement, claim or cause of action constituting or relating
to the Trust Assets, whether in the nature of an approval,
consent, demand or notice hereunder or otherwise, unless such
act would require the consent of the Beneficiaries in
accordance with the express provisions of this SAT Agreement;
(xxiv) to perform such other actions and undertake such other conduct
as the Trustee believes is necessary to carry out the purposes
and intent of the Second Amended Shareholders Trust;
(xxv) subject to the express limitations contained herein and in the
Plan, the Trustee shall have, and may exercise with respect to
the Trust Assets, or any part thereof, and to the
administration and distribution of the Trust Assets, all
powers now or hereafter conferred on trustees by the laws of
the State of Nevada. The powers conferred herein in no way
limit any power conferred on the Trustee by any other
provision of this SAT Agreement but shall be in addition
thereto; provided however, that these powers are conferred and
may be exercised only and solely within the limitations and
for the limited purposes imposed and expressed in the Plan and
this SAT Agreement;
(xxvi) to carry out any duty or obligation imposed by the Plan or
this SAT Agreement, including reporting and maintenance of a
web site for the Second Amended Shareholders Trust.
(xxvii) To transfer to Axion any choses in action transferred to the
Second Amended Shareholders Trust pursuant to the Settlement
Agreement or the Plan.
The Trustee shall not at any time, on behalf of the Second Amended Shareholders
Trust or the Beneficiaries, engage in any trade or business, and the Trustee
shall not use or dispose of any part of the Trust Assets in furtherance of any
trade or business. The Trustee shall not sell property to or borrow property
from the Trust.
5.4 RETENTION OF ATTORNEYS, ACCOUNTANTS AND OTHER PROFESSIONALS.
Subject to the approval of the Trust Board, the Trustee may retain professionals
to aid in the performance of its responsibilities pursuant to the Plan and this
SAT Agreement, including attorneys and accountants and such experts, advisors,
consultants, investigators, appraisers, auctioneers or other professionals as
are advisable to carry out the purposes of the Second Amended Shareholders
Trust. Subject to the approval of the Trust Board, the Trustee may commit the
Second Amended Shareholders Trust and shall pay all such persons or entities
reasonable compensation from the Trust Assets for services rendered and expenses
incurred.
5.5 COMPENSATION OF TRUSTEE. The Trustee shall be paid from the Trust
Assets: (i) a base fee consisting of hourly fee of $200.00 for services rendered
or such other reasonable amount as determined by the Bankruptcy Court; and (ii)
reimbursement of all reasonable and necessary expenses incurred. All payments in
respect of compensation and reimbursement for expenses shall be made to the
Trustee without any further need for Bankruptcy Court approval.
The reasonableness of the Trustee's fees and expenses shall include
overall effective rates including the time and hourly rates charged by the
Trustee's employees.
5.6 COMPENSATION OF TRUSTEE'S EMPLOYEES AND RETAINED PROFESSIONALS. The
Trustee's employees and professionals retained on behalf of the Second Amended
Shareholders Trust shall be paid from the Trust Assets as follows:
(i) the Trustee's employees shall be paid reasonable
compensation, subject to the approval of the Trust Board, on such
periodic basis as the Trustee deems appropriate and approved by the
Trust Board;
(ii) the professionals retained by the Second Amended
Shareholders Trust shall submit monthly billing statements to the
Trustee and the Trust Board, for review. The Trustee and the Trust
Board shall have 15 days after receipt of the statements to object by
serving an objection setting forth the precise nature of the objection
and the amount at issue on the Trustee's professional. At the
expiration of the 15 day period, the Trustee shall promptly pay that
portion of the monthly billing statements to which no objection has
been made. The parties shall attempt to consensually resolve
objections, if any, to any monthly statement. If the parties are unable
to reach a consensual resolution of any such objection, the party who
received an objection to its fees may seek payment of such fees by
filing a motion with the Bankruptcy Court and providing notice to the
Trustee and the Trust Board. Any professional who fails to submit a
monthly statement shall be ineligible to receive further payment of
fees and expenses as provided in this SAT Agreement until the monthly
statement is submitted.
5.7 STANDARD OF CARE; EXCULPATION. The Trustee accepts and undertakes
to discharge the Second Amended Shareholders Trust upon the terms and conditions
of this SAT Agreement and the Plan. The Trustee shall exercise those rights and
powers granted by this SAT Agreement and the Plan. The Trustee shall use the
same degree of care and skill in the exercise of the Trustee's powers and
responsibilities as a prudent person would exercise or use under the
circumstances in the conduct of its own affairs. Neither the Trustee, nor any of
the Trustee's officers, directors, employees, agents or professionals, shall be
liable to any Beneficiary or the Second Amended Shareholders Trust or to any
other third party other than for proven acts of gross negligence or willful
misconduct in the exercise or performance of duties under this SAT Agreement and
the Plan, or in the case of the Trustee's officers, directors, employees, agents
or professionals proven acts of gross negligence or willful misconduct in the
exercise or performance of its duties on behalf of the Trustee or the Trust. The
Trustee may consult with and rely on the advice of legal counsel and such other
experts, advisors, consultants, or other professionals and shall be fully
protected in respect of any action taken or suffered by the Trustee in good
faith in accordance with such advice.
5.8 BOND REQUIREMENT; EXERCISE OF POWERS. The Trustee shall not be
required to furnish a bond to secure the performance of the Trustee's duties and
obligations. Except as otherwise expressly provided in this SAT Agreement, Plan
or Confirmation Order, the Trustee shall not be required to procure
authorization from the Bankruptcy Court in the exercise of any power conferred
upon the Trustee by this SAT Agreement.
5.9. TRANSFEREE LIABILITIES. If any liability shall be asserted against
the Second Amended Shareholders Trust or the Trustee as the transferee of the
Trust Assets, on account of any claimed liability of or through the Debtor or
the Beneficiaries, the Trustee may use such part of the Trust Assets as may be
necessary in contesting any such claimed liability and in payment, compromise,
settlement and discharge thereof on terms reasonably satisfactory to the Trustee
in its discretion. In no event shall the Trustee be required to use the
Trustee's personal funds or assets for such purposes.
5.10. INDEMNIFICATION. The Trustee, any of its officers, directors,
employees, agents, and professionals, and any professionals or independent
contractors of the Second Amended Shareholders Trust (collectively, the
"Indemnified Parties"), shall be indemnified by and receive reimbursement from
the Second Amended Shareholders Trust against and from any and all loss,
liability or damage, including payment of attorneys' fees and other defense
costs, which the Trustee or the other Indemnified Parties may incur or sustain
other than as a result of proven acts of gross negligence or willful misconduct
in the exercise or performance of its duties under this SAT Agreement and under
the Plan. The Trustee may reserve from Trust Assets a reasonable amount for
purposes of funding any future indemnification liability and costs. The Trustee
may purchase with assets of the Trust, such insurance as it reasonably believes,
in the exercise of its judgment and discretion, adequately insures that the
Trustee and the other Indemnified Parties shall be indemnified against any such
loss, liability or damage pursuant to this Section. Expenses (including
attorneys' fees) and other costs of the Trustee and the other Indemnified
Parties' defense (unless resulting from the applicable Indemnified Party's gross
negligence or willful misconduct) shall be paid by the Second Amended
Shareholders Trust. The terms of this section shall continue to apply to any
former Indemnified Party. The expenses Indemnified Parties incurred in defending
an action or proceeding shall be paid by the Second Amended Shareholders Trust
as incurred and in advance of the final disposition of the action or proceeding
upon receipt of an undertaking by or on behalf of Indemnified Party to repay the
amount if it is ultimately determined by the Bankruptcy Court that the
Indemnified Party is not entitled to be indemnified by the Trust. The provisions
of this Section do not affect any rights to advancement of expenses that
Indemnified Parties may be entitled under any contract or otherwise.
5.11. NO IMPLIED DUTIES. The Trustee shall not manage, control, use,
sell, dispose, collect or otherwise deal with the Second Amended Shareholders
Trust or the Trust Assets or otherwise take any action hereunder except as
expressly provided herein, and no implied duties or obligations shall be read
into this SAT Agreement against the Trustee. The Trustee nevertheless agrees
that it will promptly take such actions as may be necessary to duly discharge
any liens or encumbrances on the Trust Assets, or any portion thereof which
result from claims against the Trustee not related to (i) the ownership or
administration of the Trust Assets, (ii) any other transaction pursuant to this
SAT Agreement, or (iii) any document included in the Trust Assets.
5.12 NO PERSONAL LIABILITY. Persons dealing with the Second Amended
Shareholders Trust shall look solely to the Second Amended Shareholders Trust or
the Trust Assets for the enforcement of any claims against the Second Amended
Shareholders Trust or to satisfy any liability incurred by the Trustee to such
persons in carrying out the terms of this Trust, and neither the Trustee, nor
any of its officers, directors, employees, agents, professionals or independent
contractors of the Trustee or the Trust, shall have any personal liability or
individual obligation to satisfy any such liability.
5.13. BANKRUPTCY COURT APPROVAL. The Trustee and/or the Trust Board
shall have, in either's sole discretion, the right to seek approval of the
Bankruptcy Court for any proposed transaction.
5.14. RELIANCE BY TRUSTEE. The Trustee may rely, and shall be fully
protected personally in acting upon any resolution, statement, certificate,
instrument, opinion, report, notice, request, consent, order or other instrument
or document that it has no reason to believe to be other than genuine and to
have been signed or presented other than by a proper party or parties or, in the
case of facsimile transmissions, to have been sent other than by the proper part
or parties, in each case without obligation to satisfy itself that the same was
given in good faith and without responsibility for errors in delivery,
transmission or receipt. In the absence of its bad faith, willful misconduct,
gross negligence, willful disregard of its duties or material breach of this SAT
Agreement, the Trustee may rely as to the truth of statements and correctness of
the facts and opinions expressed therein and shall be fully protected personally
in acting thereon. The Trustee may consult with legal counsel and shall be fully
protected in response of any action taken or suffered by it in accordance with
the written opinion of legal counsel. Except as otherwise required by the Plan,
the Trustee may at any time seek instructions from the Bankruptcy Court
concerning any aspect of administration of the Second Amended Shareholders Trust
or disposition of the Trust Assets, including but not limited to establishing
the Expense Reserve, Disputed Interest Reserve, and making Distributions.
ARTICLE VI
THE TRUST BOARD
6.1 ESTABLISHMENT OF TRUST BOARD. On the Effective Date, the Trust
Board shall be established, using the procedure described in the Plan. Prior to
appointment, the members of the Trust Board shall disclose to the Bankruptcy
Court, Trustee and all other members of the Trust Board any and all Claims or
Equity Securities held, owned or asserted by that member personally, by any
relative or other entity with which they are employed, associated or affiliated,
and whether any Claim or Equity Security Interest that is held by them
personally, by any relative or other entity with which they are employed,
associated or affiliated, has been sold, transferred or otherwise assigned,
disposed of or satisfied by any entity other than the Liquidation Trust or the
Second Amended Shareholders Trust.
6.2 GENERAL POWERS. The Trust Board shall have the power to take any
and all actions as are necessary or advisable to effectuate the purposes of the
Second Amended Shareholders Trust, including, without limitation, the power and
authority:
(i) as soon as practicable but in no event later than 30 days after the
Effective Date, to select the successor Trustee to Xxxxxx, based on a majority
vote of the members of the Trust Board to be approved by the Bankruptcy Court
upon motion brought by the Trust Board as provided for in section 6.7 below;
(ii) to remove the Trustee as provided in this Article;
(iii) in the event of death, dissolution, resignation or removal of the
Trustee, to select a replacement Trustee as provided in this Article;
(iv) to make recommendations to, advise and consult with the Trustee;
(v) to regularly communicate the status of the Second Amended
Shareholders Trust to the holders of Equity Securities;
(vi) to take any and all actions not inconsistent with this SAT
Agreement and the Plan that further, promote and advance the purposes of the
Second Amended Shareholders Trust and on matters arising in the administration
and disposition of Trust Assets and to seek a Bankruptcy Court ruling or
intervention in this regard
6.3 COMPOSITION; REPLACEMENT. The Trust Board shall consist of five
members who are Equity Security Holders. In the case of inability to serve or
unwillingness of any member of the Trust Board to serve, such member shall be
replaced by designation and majority vote of the remaining members of the Trust
Board upon consultation with the Trustee. The Trust Board or the Trustee, may,
in their discretion, seek Bankruptcy Court approval upon written motion by a
majority of the members of the Trust Board or the Trustee and upon notice and a
hearing to the Trustee, the Liquidation Trustee and all Equity Security Holders
whose interests have not yet been disallowed.
6.4 BY-LAWS. The Trust Board may govern its proceedings through the
adoption of by-laws, which the Trust Board may adopt by majority vote. No
provision of such by-laws shall supersede any express provision of the Plan or
this SAT Agreement.
6.5 ADVICE AND DIRECTION TO THE TRUSTEE. The Trust Board shall provide
advice, instruction and direction on matters arising in the administration and
the disposition and distribution of Trust Assets and the purposes of the Second
Amended Shareholders Trust.
6.6 RESIGNATION AND REMOVAL OF TRUSTEE. Xxxxxx shall serve as Trustee
until a successor Trustee is chosen by the Trust Board as provided for in
section 6.2 above and approved by the Bankruptcy Court. Any successor Trustee
may resign by giving written notice of its resignation to the Trust Board, the
Bankruptcy Court and the Liquidation Trustee. Unless the Bankruptcy Court orders
otherwise, (i) such resignation shall become effective on the date a successor
is appointed as provided herein; and (ii) the Trustee shall be entitled to
compensation in accordance with the SAT Agreement through the effective date of
the Trustee's resignation. Unless the Bankruptcy Court orders otherwise, within
fifteen (15) days of giving such notice of resignation, the Trustee shall serve
a formal final accounting upon the Bankruptcy Court and, upon the effective date
of such resignation, the Trustee shall be discharged from the performance of any
further duties, except as provided herein. If the Trustee at any time resigns or
is removed, or dies or becomes incapable of action, or is a debtor under the
Bankruptcy Code or is adjudged to be insolvent, a vacancy shall be deemed to
exist and a successor Trustee shall be appointed as provided herein. The Trustee
Governing Board may, upon supermajority vote, remove the Trustee for cause,
including but not limited to breach of any obligation imposed by this SAT
Agreement. If the requisite approval is not obtained, the Trustee may be removed
by order of the Bankruptcy Court for cause shown upon written motion by any
member of the Trust Board and upon notice and a hearing to the Trustee, the
Liquidation Trustee and all Equity Security Holders whose interests have not yet
been disallowed.
6.7 APPOINTMENT OF SUCCESSOR TRUSTEE. In the event of the death (in the
case of a Trustee that is a natural person), dissolution (in the case of a
Trustee that is not a natural person), resignation, or removal of the Trustee,
the members of the Trust Board shall, by majority vote, designate a person to
serve as successor Trustee, subject to Bankruptcy Court approval upon written
motion by the Trust Board and upon notice and a hearing to the Trustee, the
Liquidation Trustee and all Equity Security Holders whose interests have not yet
been disallowed. Every successor Trustee appointed hereunder shall execute,
acknowledge and deliver to the Bankruptcy Court and to the predecessor Trustee
an instrument accepting the appointment, and thereupon the successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the predecessor Trustee.
6.8 COMPENSATION. Each member of the Trust Board shall be entitled to
compensation of $100.00 per hour for the time expended by the member in carrying
out the member's duties, and to reimbursement of the member's reasonable and
necessary expenses. The compensation and reimbursement of expenses of the Trust
Board members shall be paid out of Trust Assets. Each member of the Trust Board
shall serve upon the Trustee a monthly statement of hours spent and expenses
incurred in carrying out the member's duties. Upon review of the propriety of
the amounts sought and consensual resolution of any disputes as to the amounts
sought, the Trustee shall promptly pay 100 percent of the monthly statement. If
a member of the Trust Board fails to submit a monthly statement, the member
shall be ineligible to receive payment of fees and expenses as provided herein
for such month.
6.9 STANDARD OF CARE; EXCULPATION. Neither the Trust Board nor any of
its members, designees, counsel, financial advisors or any duly designated agent
or representative of any such party shall be liable for the act, default or
misconduct of any other member of the Trust Board, nor shall any member be
liable for anything other than such member's own gross negligence or willful
misconduct. The Trust Board may, in connection with the performance of its
duties, consult with the Trustee's counsel, accountants or other professionals,
and shall not be liable for anything done or omitted or suffered to be done in
accordance with such advice or opinions. If the Trust Board determines not to
consult with counsel, accountants or other professionals, it shall not be deemed
to impose any liability on the Trust Board or its members.
6.10 TERMINATION OF THE TRUST BOARD. Upon the certification by the
Trustee that all Trust Assets have been distributed, abandoned or otherwise
dispose of, the members of the Trust Board shall resign their positions, whereon
they shall be discharged from further duties and responsibilities and the Trust
Board will be dissolved.
ARTICLE VII
COORDINATION WITH LIQUIDATION TRUST
7.1 OBJECTIONS TO CLAIMS AND INTERESTS. The Second Amended Shareholders
Trust shall be entitled to pursue objections to Claims and Interests. The
Trustee and the Liquidation Trustee may, but are under no obligation to, enter
into arrangements for the joint prosecution of their respective claims, the
sharing of litigation costs and/or recoveries and any other arrangements that
are mutually acceptable to each such party. Neither the Liquidation Trust nor
the Second Amended Shareholders Trust shall have the right to release any party
on behalf of the other except by Final Order of the Bankruptcy Court.
7.2 COORDINATION OF POUROVER. The Trustee will coordinate with the
Liquidation Trustee for the pourover of Trust Assets from the Liquidation Trust,
including Litigation Claims. The Trustee and the Liquidation Trustee may, but
are under no obligation to, enter into arrangements for the joint prosecution or
coordination of transfer of the Litigation Claims, the sharing of litigation
costs and/or recoveries and any other arrangements that are mutually acceptable
to each such party. Neither the Liquidation Trust nor the Second Amended
Shareholders Trust shall have the right to release any party on behalf of the
other except by Final Order of the Bankruptcy Court.
ARTICLE VIII
RETENTION OF JURISDICTION
8.1 RETENTION OF JURISDICTION. Pursuant to the Plan and Confirmation
Order, the Bankruptcy Court shall retain jurisdiction to hear and determine all
matters arising out of, and related to Litigation Claims, objections to Claims
and Interests, and any other claims or causes of action that are Trust Assets;
and any disputes arising in connection with the interpretation, implementation
or enforcement of the Trust.
8.2 EXCLUSIVE JURISDICTION. The Bankruptcy Court shall have exclusive
jurisdiction over the Second Amended Shareholders Trust, the Trust Assets, and
resolution of any and all disputes, litigation and claims objections, whether or
not specifically delineated in this SAT Agreement.
ARTICLE IX
RIGHTS OF BENEFICIARIES
The interests of the Beneficiaries (the "Beneficial Interests") shall
not be represented by any certificates and shall be evidenced only by this SAT
Agreement. Beneficial Interests may not be transferred or assigned except by
will or the laws of intestacy. Beneficiaries shall have no title to, right to,
possession of, management of, or control of the Second Amended Shareholders
Trust or the Trust Assets. The Beneficiaries' sole right hereunder shall be the
contingent right to receive a Pro Rata share of the Trust Assets as provided for
in the Plan and Confirmation Order, payable as provided herein. Each Beneficiary
shall take and hold its Beneficial Interest subject to all the terms and
provisions of this SAT Agreement, the Plan and the Confirmation Order. The
interest of a Beneficiary is hereby declared and shall be in all respects
personal property. Upon the death of an individual who is a Beneficiary, his or
her interest shall pass as personal property to his or her legal representative
and such death shall not terminate or affect the validity of this SAT Agreement
or the Second Amended Shareholders Trust. Upon the merger, consolidation or
other similar transaction involving a Beneficiary that is not an individual,
such Beneficiary's interest shall be transferred by operation of law and such
transaction shall not terminate or affect the validity of this SAT Agreement or
the Trust. No widower, widow, heir or devisee of any individual who may be a
Beneficiary and no bankruptcy trustee, receiver or similar person of any
Beneficiary shall have any right, statutory or otherwise (including any right of
dower, homestead or inheritance, or of partition, as applicable), in any
property whatever forming a part of the Second Amended Shareholders Trust or the
Trust Assets, but the whole title to the Second Amended Shareholders Trust and
the Trust Assets 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
SAT Agreement and the Plan.
ARTICLE X
TERMINATION
10.1 DURATION. After distribution of the Trust Assets delivered to
Second Amended Shareholders Trust, the Second Amended Shareholders Trust shall
be dissolved and its affairs terminated.
10.2 IRREVOCABILITY OF SECOND AMENDED SHAREHOLDERS TRUST. The Second
Amended Shareholders Trust is irrevocable except as expressly provided for in
this Trust Agreement or the Plan, and may be amended upon the fulfillment of the
following three conditions: (i) majority vote of the Trust Board, (ii) the
consent of the Trustee and (iii) upon approval by the Bankruptcy Court on motion
filed by the Trust Board or the Trustee, after a hearing on notice to the Trust
Board, the Trustee and the holders of Equity Securities whose interests have not
been disallowed.
10.3 CONTINUANCE OF SECOND AMENDED SHAREHOLDERS TRUST FOR WINDING UP.
After the termination of the Second Amended Shareholders Trust and for the
purpose of liquidating and winding up the affairs of the Second Amended
Shareholders Trust, the Trustee shall continue to act in such capacity until all
applicable duties under the Plan and this SAT Agreement have been fully
performed. Upon distribution of all of the Trust Assets, the Trustee shall hold
the books, records and files delivered to or created by the Trustee for a period
of two years from the date of the Final Distribution. The Second Amended
Shareholders Trust shall pay all costs and expenses associated with the storage
of such documents. Except as otherwise specifically provided herein, upon the
Final Distribution of all of the Trust Assets, the Trustee shall have no further
duties or obligations hereunder except (i) to account and report as provided in
this section; and (ii) to perform such other acts as may be required by law or
as set forth in the Plan.
10.4 ACCOUNTING. Upon termination of the Second Amended Shareholders
Trust, the Trustee shall file an accounting with the Bankruptcy Court setting
forth the amount it has collected and disbursed, and the fees and expenses
incurred in administering the Second Amended Shareholders Trust, including,
without limitation, the fees and expenses incurred by the Trustee and the
Trustee's professionals, if any, and shall seek the issuance and entry of any
orders necessary to approve such accounting and to discharge the Trustee from
any and all liability for acting as Trustee under the Plan and this SAT
Agreement.
ARTICLE XI
MISCELLANEOUS
11.1 FILING AND INSPECTION OF DOCUMENTS. This SAT Agreement shall be
filed or recorded in the office of the Secretary of State of the State of
Nevada, or in such other office or offices as the Trustee may determine to be
necessary or desirable. The Trustee shall file or record any instrument that
relates to any change in the office of Trustee in the same place or places where
the original Trust Agreement has been filed or recorded. A copy of this Trust
Agreement and all amendments thereto shall be maintained by the Trustee and
shall be available at all times for inspection during regular business hours
upon reasonable notice by any Beneficiary.
11.2 NO ASSOCIATION, PARTNERSHIP OR JOINT VENTURE. This SAT Agreement
is not intended to create and shall not be interpreted AS creating an
association, partnership or joint venture of any kind.
11.3 REQUIREMENT OF UNDERTAKING. The Trustee may request any Bankruptcy
Court to require, and any Bankruptcy Court may in its discretion require, in any
suit for the enforcement of any right or remedy herein, or in any suit against
the Trustee for any action taken or omitted by it as Trustee, the filing by any
party in such suit of an undertaking to pay the costs of such suit and such
Bankruptcy Court may in its discretion assess reasonable costs, including
reasonable attorneys' fees, against any party in such suit, having due regard to
the merits and good faith of the claims or defenses made by such party;
PROVIDED, HOWEVER, that the provisions of this paragraph 11.3 shall not apply to
any suit by the Trustee.
11.4 LAWS AS TO CONSTRUCTION. This SAT Agreement shall be governed by
and construed in accordance with the laws of the State of Nevada without regard
to choice of law, except to the extent those laws confer jurisdiction over the
Second Amended Shareholders Trust in any court other than the Bankruptcy Court.
11.5 JURISDICTION. The Bankruptcy Court shall have sole and exclusive
jurisdiction to enforce this SAT Agreement in order to effectuate the provisions
of the Plan and to resolve any dispute that may arise among the parties or which
may arise in connection with the administration of the Trust, specifically
including any action that may be brought against the Trustee for any reason
related to the Second Amended Shareholders Trust.
11.6 SEVERABILITY. In the event any provision of this SAT Agreement or
its application to any person or circumstance shall be finally determined by the
Bankruptcy Court to be invalid or unenforceable to any extent, the remainder of
this SAT Agreement, or the application of such provision to persons or
circumstances other than those as to which it is held invalid or enforceable,
shall not be affected thereby, and each provision of this SAT Agreement shall be
valid and enforced to the fullest extent permitted by law.
11.7 NOTICES.
(i) Any notice or other communication by the Second Amended
Shareholders Trust to the Beneficiaries shall be deemed to have been
sufficiently given, for all purposes, if given by being deposited, postage
prepaid, in an official depository of the United States Postal Service addressed
to such parties at their respective addresses as determined in accordance with
this SAT Agreement.
(ii) All notices, requests, consents or other communications to the
Second Amended Shareholders Trust required or permitted under this SAT Agreement
shall be in writing (including facsimile or other similar telecommunication
media) and shall be (as elected by the person giving such notice) hand delivered
by messenger or courier service, telecommunicated or mailed by registered,
certified or overnight mail (postage prepaid), return receipt requested, to the
Trustee, __________________, facsimile ___________, with a copy to
________________, Esq., or to such other address as the Trustee or any successor
Trustee may designate by notice to the Beneficiaries; and to the Trust Board by
delivery to each member at the address designated by that member in writing.
(iii) All notices, requests, consents or other communications by the
Trustee required or permitted under the SAT Agreement shall be in writing and
shall be sent first-class mail postage prepaid, overnight mail or facsimile, as
the Trustee or any successor Trustee may determine.
(iv) Each notice, request, consent or other communication described
herein shall be deemed delivered (i) on the date delivered if by personal
delivery, (ii) on the date telecommunicated with confirmed answer back if
telecommunicated, (iii) on the date upon which the return receipt is signed or
delivery is refused, as the case may be, if mailed, or (iv) upon mailing.
11.8 INSTRUCTIONS FROM BANKRUPTCY COURT. The Trustee may, in its sole
discretion, apply to the Bankruptcy Court for instructions in connection with
any issue which may arise in the administration of the Second Amended
Shareholders Trust, for an order approving the settlement or compromise of any
claim asserted by, or judgment in favor of, the Second Amended Shareholders
Trust or to settle judicially the final account of Trustee upon its resignation
or removal or upon the termination of this Trust.
11.9 NO SUITS BY INTEREST HOLDERS. No Interest Holder shall have any
right by virtue of any provision of this SAT Agreement to institute any action
or proceeding in law or in equity against any party other than the Trustee on or
under or with respect to the Trust Assets.
IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement or
caused this Trust Agreement to be duly executed as of the day and year first
written.
MEGA-C POWER CORPORATION, AXION POWER INTERNATIONAL, INC.,
a Nevada corporation, a Delaware corporation,
By: /S/ XXXXXXX X. XXXXX By: /S/ XXXXXX XXXXXXXXX
----------------------------------------- -------------------------
XXXXXXX X. XXXXX, ESQ. in his capacity as Name: Xxxxxx Xxxxxxxxx
CHAPTER 11 TRUSTEE Title: Chief Executive
Officer
XXXXX XXXXXX, Trustee of the Trust for the Benefit of XXXXXXX XXXXXXX, Trustee
of the Mega-C Liquidation the Shareholders of Mega-C Power Corporation, Trust
By: /S/ XXXXX XXXXXX By: /S/ XXXXXXX XXXXXXX
---------------------- -----------------------
XXXXX XXXXXX XXXXXXX XXXXXXX
