SCHEDULE 13D: EXHIBIT 1
THE RAYTECH CORPORATION
ASBESTOS PERSONAL INJURY SETTLEMENT TRUST AGREEMENT
The Raytech Corporation Asbestos Personal Injury Settlement Trust
Agreement ("PI Trust Agreement"), dated the date set forth on the signature page
hereof and effective as of the Effective Date, is entered into by Raytech
Corporation ("Raytech," the "Settlor," or the "Debtor"), a Delaware corporation,
the Debtor and debtor-in-possession in Case ▇▇. ▇-▇▇-▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Bankruptcy Court for the District of Connecticut as Settlor; the Legal
Representative; the Official Committee of Unsecured Creditors ("Committee"); and
the Trustees ("Trustees") and the members of the PI Trust Advisory Committee
("TAC") identified on the signature page hereof and appointed at Confirmation
pursuant to the Raytech Corporation's Second Amended Plan of Reorganization
under Chapter 11 of the United States Bankruptcy Code, dated as of April 19,
2000 ("Plan"), as such Plan may be amended, modified or supplemented from time
to time. All capitalized terms not otherwise defined herein shall have their
respective meanings as set forth in the Plan, and such definitions are
incorporated herein by reference. All capitalized terms not defined herein or
defined in the Plan, but defined in the Bankruptcy Code or Rules, shall have the
meanings ascribed to them by the Bankruptcy Code and Rules, and such definitions
are incorporated herein by reference.
WHEREAS, at the time of the entry of the order for relief in the
Chapter 11 case, Raytech was named as a defendant in actions involving personal
injury ("PI") or death claims caused by exposure to asbestos-containing products
for which Raymark Industries, Inc. and its predecessors and affiliates have
legal liability ("PI Trust Claims" as defined in the Plan); and
WHEREAS, Raytech has reorganized under the provisions of Chapter 11 of
the Bankruptcy Code in a case pending in the United States Bankruptcy Court for
the District of Connecticut, known as IN RE RAYTECH CORPORATION, DEBTOR, Case
No. ▇-▇▇-▇▇▇▇▇; and
WHEREAS, the Plan has been confirmed by the Bankruptcy Court; and
WHEREAS, the Plan provides, INTER ALIA, for the creation of the Raytech
Corporation Asbestos Personal Injury Settlement Trust (the "PI Trust"); and
WHEREAS, pursuant to the Plan, the PI Trust is to use its assets and
income to satisfy all PI Trust Claims; and
WHEREAS, it is the intent of Raytech, the Trustees, the Committee, the
TAC, and the Legal Representative that the PI Trust be administered, maintained,
and operated at all times through mechanisms that provide reasonable assurance
that the PI Trust will satisfy all PI Trust Claims pursuant to the Raytech
Corporation Asbestos Personal Injury Trust Distribution Procedures
("Procedures") that are attached hereto as Exhibit 1 in substantially the same
manner, and in strict compliance with the terms of this PI Trust Agreement; and
WHEREAS, pursuant to the Plan, the PI Trust is intended to qualify as a
"qualified settlement fund" within the meaning of section 1.468B-1 ET SEQ. of
the Treasury Regulations promulgated under section 468B of the Internal Revenue
Code ("IRC"); and
WHEREAS, the Bankruptcy Court has determined that the PI Trust and the
Plan satisfy all the prerequisites for an injunction pursuant to section 524(g)
of the Bankruptcy Code, and such injunction has been entered in connection with
the Confirmation Order;
NOW, THEREFORE, it is hereby agreed as follows:
SECTION 1
AGREEMENT OF TRUST
1.1 CREATION AND NAME. Raytech as Settlor hereby creates a trust known
as the "Raytech Corporation Asbestos Personal Injury Settlement PI Trust," which
is the PI Trust provided for and referred to in the Plan. The Trustees of the PI
Trust may transact the business and affairs of the PI Trust in the name of the
PI Trust.
1.2 PURPOSE. The purpose of the PI Trust is to assume the liabilities
of Raytech, and its predecessors and successors in interest, for all PI Trust
Claims and to use the PI Trust's assets and income to pay the holders of all PI
Trust Claims in accordance with this PI Trust Agreement and the Procedures in
such a way that such holders of PI Trust Claims are treated fairly, equitably
and reasonably in light of the extremely limited assets available to satisfy
such claims, and to otherwise comply in all respects with the requirements of a
trust set forth in section 524(g)(2)(B) of the Bankruptcy Code.
1.3 TRANSFER OF ASSETS. Pursuant to the Plan, the number of shares of
Raytech Common Stock plus the amount of Available Cash shown on Schedule A
attached hereto have been transferred and assigned to the PI Trust to settle and
discharge all PI Trust Claims. Pursuant to the Plan, Raytech, its successors in
interest thereto, from and after the Effective Date ("Reorganized Raytech"),
Raymark and others may also transfer and assign additional assets to the PI
Trust from time to time. Such additional assets are anticipated to include, but
are not limited to, certain Tax Refunds and Tax Benefits to be transferred
pursuant to the Tax Assignment and Assumption Agreement attached as Exhibit "G"
to the Plan. In all events, such assets will be transferred to the PI Trust free
and clear of any liens or other claims by Raytech, Reorganized Raytech, any
creditor, shareholder, or other entity. Raytech, Reorganized Raytech, Raymark
and any other transferors shall also execute and deliver such documents to the
PI Trust as the Trustees reasonably request to transfer and assign the stock and
other assets (the "PI Trust assets") to the PI Trust.
1.4 ACCEPTANCE OF ASSETS AND ASSUMPTION OF LIABILITIES.
(a) In furtherance of the purposes of the PI Trust, the
Trustees, on behalf of the PI Trust, hereby expressly accept the transfer and
assignment to the PI Trust of the PI Trust assets in the time and manner as
contemplated in the Plan.
(b) In furtherance of the purposes of the PI Trust, the
Trustees, on behalf of the PI Trust, expressly assume all liability for all PI
Trust Claims. Except as otherwise provided in this PI Trust Agreement and the
Procedures, the PI Trust shall have all defenses, cross-claims, offsets, and
recoupments, as well as rights of indemnification, contribution, subrogation,
and similar rights, regarding such claims that Raytech or Reorganized Raytech
has or would have had under applicable law. Regardless of the foregoing,
however, Section 5.6 of the Procedures provides that, except as to holders of
Asbestos Personal Injury Contribution Claims and except as to holders of any PI
Trust Claims time-barred as of March 10, 1989, the Petition Date, the PI Trust
shall have no rights and defenses based on state and federal statutes of
limitations and repose it might otherwise assert against holder of PI Trust
Claims. No provision herein or in the Procedures shall be construed to mandate
distributions on any claims or other actions that would contravene the PI
Trust's compliance with the requirements of a qualified settlement fund within
the meaning of section 1.468B-1 ET SEQ. of the Treasury Regulations promulgated
under section 468B of the IRC.
(c) Raytech and Reorganized Raytech shall be entitled to
indemnification from the PI Trust for any expenses, costs, fees (including
attorneys' fees and costs, but excluding any such expenses, costs, and fees
incurred prior to the Effective Date), judgments, settlements, or other
liabilities (excluding judgments, settlements or liabilities actually paid by
Raytech before the Effective Date or paid pursuant to the Plan of Reorganization
other than for PI Trust Claims) arising from or incurred in connection with PI
Trust Claims, including, but not limited to, indemnification or contribution for
such claims prosecuted against Reorganized Raytech.
(d) Nothing in this PI Trust Agreement shall be construed in
any way to limit the scope, enforceability, or effectiveness of the Injunctions
issued in connection with the Plan or the PI Trust's assumption of all liability
for PI Trust Claims, subject to the provisions of Section 1.4(b) above.
SECTION 2
POWERS AND TRUST ADMINISTRATION
2.1 POWERS.
(a) The Trustees are and shall act as the fiduciaries to the
PI Trust in accordance with the provisions of this PI Trust Agreement and the
Plan. The Trustees shall, at all times, administer the PI Trust and the PI Trust
assets in accordance with the purposes set forth in Section 1.2 above. Subject
to the limitations set forth in this PI Trust Agreement, the Trustees shall have
the power to take any and all actions that, in the judgment of the Trustees, are
necessary or proper to fulfill the purposes of the PI Trust, including, without
limitation, each power expressly granted in this Section 2.1, any power
reasonably incidental thereto, and any trust power now or hereafter permitted
under the laws of the State of New York, without regard to conflict of law
principles.
(b) Except as required by applicable law or otherwise
specified herein, the Trustees need not obtain the order or approval of any
court in the exercise of any power or discretion conferred hereunder.
(c) Without limiting the generality of Section 2.1(a) above,
and except as limited below, the Trustees shall have the power to:
(i) receive and hold the PI Trust assets, vote the
Reorganized Raytech Common Stock, and exercise all rights with respect to, and
sell, any securities issued by Reorganized Raytech that are included in the PI
Trust assets, subject to any restrictions set forth in the Restated Certificate
of Reorganized Raytech;
(ii) invest the monies held from time to time by the
the PI Trust;
(iii) sell, transfer, or exchange any or all of the PI
Trust assets at such prices and upon such terms as the Trustees may consider
proper, consistent with the other terms of this PI Trust Agreement;
(iv) enter into leasing and financing agreements with
third parties to the extent such agreements are reasonably necessary to permit
the PI Trust to operate;
(v) pay liabilities and expenses of the PI Trust,
including, but not limited to, PI Trust Expenses;
(vi) establish such funds, reserves and accounts within
the PI Trust estate, as deemed by the Trustees to be useful in carrying out the
purposes of the PI Trust;
(vii) ▇▇▇ and be sued and participate, as a party or
otherwise, in any judicial, administrative, arbitrative, or other proceeding;
(viii) establish, supervise and administer the PI Trust
in accordance with the Procedures and the terms thereof, a copy of which is
annexed hereto as Exhibit 1;
(ix) appoint such officers and hire such employees and
engage such legal, financial, accounting, investment, auditing and forecasting,
and other consultants and agents as the business of the PI Trust requires, and
delegate to such persons such powers and authorities as the fiduciary duties of
the Trustees permit and as the Trustees, in their discretion, deem advisable or
necessary in order to carry out the terms of this PI Trust;
(x) pay employees, legal, financial, accounting,
investment, auditing, and forecasting, and other consultants, advisors, and
agents, including those engaged by the PI Trust in connection with its
alternative dispute resolution activities, reasonable compensation;
(xi) compensate the Trustees, the TAC members, and the
Legal Representative as provided below, and their employees, legal, financial,
accounting, investment and other advisors,
consultants, independent contractors, and agents, and reimburse the Trustees,
the TAC members and the Legal Representative all reasonable out-of-pocket costs
and expenses incurred by such persons in connection with the performance of
their duties hereunder;
(xii) execute and deliver such instruments as the
Trustees consider proper in administering the PI Trust;
(xiii) enter into such other arrangements with third
parties as are deemed by the Trustees to be useful in carrying out the purposes
of the PI Trust, provided such arrangements do not conflict with any other
provision of this PI Trust Agreement;
(xiv) in accordance with Section 4.7 below, defend,
indemnify and hold harmless (and purchase insurance indemnifying) (A) the
Trustees and (B) the TAC, the Legal Representative, the officers and employees
of the PI Trust ("the Additional Indemnitees"), and any agents, advisors and
consultants of the Trustees, the PI Trust, the TAC or the Legal Representative,
to the fullest extent that a corporation or trust organized under the law of the
PI Trust's situs is from time to time entitled to indemnify and/or insure its
directors, trustees, officers, employees, agents, advisors and representatives;
(xv) delegate any or all of the authority herein
conferred with respect to the investment of all or any portion of the PI Trust
assets to any one or more reputable individuals or recognized institutional
investment advisors or investment managers without liability for any action
taken or omission made because of any such delegation, except as provided in
Section 4.5 below;
(xvi) consult with Reorganized Raytech at such times
and with respect to such issues relating to the conduct of the PI Trust as the
Trustees consider desirable;
(xvii) make, pursue (by litigation or otherwise), collect
compromise or settle, in the name of the PI Trust or the name of Reorganized
Raytech, any claim, right, action, or cause of action included in the PI Trust
assets including, but not limited to, insurance recoveries, before any court of
competent jurisdiction; provided that settlement of actions before the
Bankruptcy Court require the approval of the Bankruptcy Court after notice to
Reorganized Raytech;
(xviii) with the consent of the TAC and the Legal
Representative, enter into any contract or otherwise engage in any transaction
with any Trustee or any Entity affiliated with any Trustee, PROVIDED, HOWEVER,
(1) that such contract or such transaction is approved by the unanimous vote of
the Trustees voting thereon, it being understood that to the extent permitted by
law the usual rules prohibiting fiduciaries from dealing with themselves as
individuals or from dealing with respect to any manner in which they have a
personal interest shall not apply to the Trustees, and (2) that any contract or
transaction entered into pursuant to this paragraph (xviii) shall be disclosed
in the report to the Bankruptcy Court described in Section 2.2(c)(i).
(xix) with the consent of the TAC and the Legal
Representative, become a member of, associate with, contract with, use the
resources of, or purchase shares of any other claims resolution facility, or
merge any claims facility of the Trust with another such facility, if the
Trustees shall determine by unanimous vote that such claims resolution facility
has the capacity to evaluate and/or pay Claims and Demands in a manner generally
consistent with the purposes of the Trust and the Plan, and not inconsistent
with the Procedures.
(d) The Trustees shall not have the power to guarantee any
debt of other persons.
(e) The Trustees shall give the TAC, the Legal Representative
and Reorganized Raytech prompt notice of (i) any material act performed or taken
pursuant to Sections 2.1(c)(i), (iii), (vii), or (xv) above, it being understood
that any sale of Reorganized Raytech common stock or other securities of
Reorganized Raytech and any voting of common stock of Reorganized Raytech shall
be deemed material for this purpose, and (ii) any act proposed to be performed
or taken pursuant to Section 2.2(f) below.
2.2 GENERAL ADMINISTRATION.
(a) The Trustees shall adopt and act in accordance with the PI
Trust Bylaws. To the extent not inconsistent with the terms of this PI Trust
Agreement, the PI Trust Bylaws shall govern the affairs of the PI Trust. In the
event of an inconsistency between the PI Trust Bylaws and this PI Trust
Agreement, the PI Trust Agreement shall govern.
(b) The Trustees shall (i) timely file such income tax and
other returns and statements and shall timely pay all taxes required to be paid,
(ii) comply with all withholding obligations, as required under the applicable
provisions of the IRC and of any state law and the regulations promulgated
thereunder, (iii) meet without limitation all requirements necessary to qualify
and maintain qualification of the PI Trust as a qualified settlement fund within
the meaning of section 1.468B-1 ET SEQ. of the Treasury Regulations promulgated
under section 468B of the IRC, and (iv) take no action that could cause the PI
Trust to fail to qualify as a qualified settlement fund within the meaning of
section 1.468B-1 ET SEQ. of the Treasury Regulations promulgated under section
468B of the IRC.
(c) The Trustees shall timely account to the Bankruptcy Court
as follows:
(i) The Trustees shall cause to be prepared and filed
with the Bankruptcy Court, as soon as available, and in any event within one
hundred and twenty (120) days following the end of each fiscal year, an annual
report containing financial statements of the PI Trust (including, without
limitation, a statement of net assets of the PI Trust as of the end of such
fiscal year and a statement of operations for such fiscal year) audited by a
firm of independent certified public accountants selected by the Trustees and
accompanied by an opinion of such firm as to the fairness of the financial
statements' presentation of the cash and investments available for the payment
of claims and as to the conformity of the financial statements with generally
accepted accounting principles. The Trustees shall provide a copy of such report
to the TAC, the Legal Representative, and Reorganized Raytech when such reports
are filed with the Bankruptcy Court.
(ii) Simultaneously with delivery of each set of
financial statements referred to in Article 2.2(c)(i) above, the Trustees shall
cause to be prepared and filed with the Bankruptcy Court a report containing a
summary regarding the number and type of claims disposed of during the period
covered by the financial statements. The Trustees shall provide a copy of such
report to the TAC, the Legal Representatives, and Reorganized Raytech when such
report is filed.
(iii) All materials required to be filed with the
Bankruptcy Court by this Section 2.2(c) shall be available for inspection by the
public in accordance with procedures established by the Bankruptcy Court and
shall be filed with the Office of the United States Trustee for the District of
Connecticut.
(d) The Trustees shall cause to be prepared as soon as
practicable prior to the commencement of each fiscal year a budget and cash flow
projections covering such fiscal year and the succeeding four fiscal years. The
Trustees shall provide a copy of the budget and cash flow projections to the TAC
and the Legal Representative.
(e) The Trustees shall consult with the TAC and the Legal
Representative (i) on the general implementation and administration of the PI
Trust; (ii) on the general implementation and administration of the Procedures;
and (iii) on such other matters as may be required under this PI Trust Agreement
and the Procedures.
(f) The Trustees shall be required to obtain the consent of
the TAC and the Legal Representative pursuant to the Consent Process set forth
in Section 5.7(b) and 6.6(b) below, in addition to any other instances elsewhere
enumerated, in order:
(i) to add to or change the schedule of
Asbestos-Related Disease Categories or criteria set forth on Schedule A of the
Procedures; to change the liquidated values for such categories set forth on
Schedule B of the Procedures; or to begin processing and paying Level Two claims
pursuant to section 5.2 of the Procedures;
(ii) to redetermine the Pro-rata Percentage described
in Section 4.2 of the Procedures;
(iii) to change the Claims Materials to be provided
to holders of PI Trust Claims under Section 6.2 of the Procedures;
(iv) to change the form of release to be provided
pursuant to Section 7.8 of the Procedures;
(v) to require that claimants provide additional
kinds of medical evidence pursuant to Section 7.1 of the Procedures;
(vi) to terminate the PI Trust pursuant to Section
7.2 below;
(vii) to settle the liability of any insurer under
any insurance policy or legal action related thereto;
(viii) to change the compensation of the members of
the TAC, the Legal Representative or Trustees, other than to reflect
cost-of-living increases or changes approved by the Bankruptcy Court as
otherwise provided herein;
(ix) to amend any provision of the PI Trust Agreement
or the Procedures;
(x) to take structural or other actions to minimize
any tax on the PI Trust assets;
(xi) to amend the PI Trust Bylaws in accordance with
the terms thereof; or
(xii) to merge any asbestos claims resolution
organization formed by the PI Trust with another asbestos claims resolution
organization that is not specifically created by this PI Trust Agreement or the
Procedures, or to contract with, become a member of or purchase shares of
another asbestos claims resolution organization or other entity that is not
specifically created by this PI Trust Agreement or the Procedures, or permit any
other party to join in any asbestos claims resolution organization that is
formed by the PI Trust pursuant to the PI Trust Agreement or the Procedures;
provided that such merger, contract, purchase or joinder shall not (a) subject
Reorganized Raytech or any successor in interest to any risk of having any PI
Trust Claim asserted against it or them, or (b) otherwise jeopardize the
validity or enforceability of the section 524(g) injunction; and provided
further that the terms of such merger will require the surviving organization to
make decisions about the allowability and value of claims in accordance with
Section 7.10 of the Procedures which requires that such decisions be based on
(i) the provisions of the Procedures, and (ii) the Asbestos-Related Disease
Categories and liquidated values for such Categories set forth on Schedules A
and B of the Procedures, respectively.
(g) The Trustees shall meet with the TAC and the Legal
Representative no less often than quarterly. The Trustees shall meet in the
interim with the TAC and the Legal Representative when so requested by either.
(h) The Trustees, upon notice from either the TAC or the Legal
Representative, if practicable in view of pending business, shall at their next
meeting with the TAC or the Legal Representative consider issues submitted by
the TAC or the Legal Representative.
2.3 CLAIMS ADMINISTRATION.
The Trustees shall promptly proceed to implement the
Procedures.
SECTION 3
ACCOUNTS, INVESTMENTS, AND PAYMENTS
3.1 ACCOUNTS. The Trustees may, from time to time, create such
accounts and reserves within the PI Trust estate as they may deem necessary,
prudent, or useful in order to provide for the payment of expenses and payment
of PI Trust Claims and may, with respect to any such account or reserve,
restrict the use of monies therein.
3.2 INVESTMENTS. Investment of monies held in the PI Trust shall
be administered in the manner in which individuals of ordinary prudence,
discretion, and judgment would act in the management of their own affairs,
subject to the following limitations and provisions:
(a) The PI Trust shall not acquire, directly or indirectly,
equity in any entity (other than Reorganized Raytech or any successor to
Reorganized Raytech) or business enterprise if, immediately following such
acquisition, the PI Trust would hold more than 5% of the equity in such entity
or business enterprise. The PI Trust shall not hold, directly or indirectly,
more than 10% of the equity in any entity (other than Reorganized Raytech or any
successor to Reorganized Raytech) or business enterprise except that, with the
consent of the TAC and the Legal Representative, the PI Trust may purchase more
than ten percent of the shares of a claims processing facility provided the
primary purpose of said purchase is to facilitate participation in the facility
for purpose of processing PI Trust claims. This provision, however, shall not
apply to any entity or business the PI Trust may acquire as a result of
litigation on fraudulent conveyance or other grounds against any shareholders or
former shareholders of Raytech or Raymark or against any parties related to any
such shareholders or former shareholders.
(b) The PI Trust shall not acquire or hold any long-term debt
securities unless (i) such securities are PI Trust assets under the Plan, (ii)
such securities are rated "Baa" or higher by ▇▇▇▇▇'▇, "BBB" or higher by
Standard & Poor's ("S&P's"), or have been given an equivalent investment grade
rating by another nationally recognized statistical rating agency, or (iii) have
been issued or fully guaranteed as to principal and interest by the United
States of America or any agency or instrumentality thereof.
(c) The PI Trust shall not acquire or hold for longer than
ninety (90) days any commercial paper unless such commercial paper is rated
"Prime-1" or higher by ▇▇▇▇▇'▇ or "A-1" or higher by S&P's or has been given an
equivalent rating by another nationally recognized statistical rating agency.
(d) Excluding any securities by the Debtor or Reorganized
Raytech, the PI Trust shall not acquire or hold any common or preferred stock or
convertible securities unless such stock or securities are rated "A" or high by
▇▇▇▇▇'▇ or "A" or higher by S&P's or have been given an equivalent investment
grade rating by another nationally recognized statistical rating agency.
(e) The PI Trust shall not acquire any debt securities or
other instruments issued by any entity (other than debt securities or other
instruments issued or fully guaranteed as to principal and interest by the
United States of America or any agency or instrumentality thereof) if, following
such acquisition, the aggregate market value of all debt securities and
instruments issued by such entity held by the PI Trust would exceed 2% of the
aggregate value of the PI Trust estate. The PI Trust shall not hold any debt
securities or other instruments issued by any entity (other than debt securities
or other instruments issued or fully guaranteed as to principal and interest by
the United States of America or any agency or instrumentality thereof and other
than debt securities or other instruments of Reorganized Raytech or any
successor to Reorganized Raytech) to the extent that the aggregate market value
of all securities and instruments issued by such entity held by the PI Trust
would exceed 5% of the aggregate value of the PI Trust assets.
(f) The PI Trust shall not acquire or hold any certificates of
deposit unless all publicly held, long-term debt securities, if any, of the
financial institution issuing the certificate of deposit and the holding
company, if any, of which such financial institution is a subsidiary, meet the
standards set forth in Section 3.2(b) above.
(g) The PI Trust may acquire and hold any securities or
instruments issued by Reorganized Raytech or any successor to Reorganized
Raytech, without regard to the limitations set forth in Subsections (a)-(f)
above.
(h) The PI Trust shall not acquire or hold any repurchase
obligations unless, in the opinion of the Trustees, they are adequately
collateralized.
(i) The PI Trust shall not acquire or hold any options.
3.3 SOURCE OF PAYMENTS. All PI Trust expenses and payments and
all liabilities with respect to claims shall be payable solely by the Trustees
out of the PI Trust assets. Neither Raytech, Reorganized Raytech, their
subsidiaries, any successor in interest or the present or former stockholders,
directors, officers, employees or agents of Raytech, Reorganized Raytech, or
their subsidiaries, nor the Trustees, the TAC or Legal Representative, or any of
their officers, agents, advisors, or employees shall be liable for the payment
of any PI Trust expense or any other liability of the PI Trust.
SECTION 4
TRUSTEES
4.1 NUMBER. There shall be three (3) Trustees. The initial
Trustees shall be those persons named on the signature page hereof (the "Initial
Trustees").
4.2 MANAGING TRUSTEE. One of the Initial Trustees selected by
the Trustees shall serve as Managing Trustee. The Managing Trustee shall
coordinate and schedule meetings of the Trustees and shall manage administrative
matters that come before the Trust.
4.3 TERM OF SERVICE.
(a) The Initial Trustees named pursuant to Article 4.1 above
shall serve the staggered terms of three (3), four (4) and five (5) years as
shown on the signature page hereof. Thereafter each term of service shall be
five (5) years. The Initial Trustees shall serve from the Effective Date until
the earlier of (i) the end of his or her term, (ii) his or her death, (iii) his
or her resignation pursuant to Section 4.3(b) below, (iv) his or her removal
pursuant to Section 4.3(c) below, or (v) the termination of the PI Trust
pursuant to Section 7.2 below.
(b) A PI Trustee may resign at any time by written notice to
the remaining Trustees, the TAC and the Legal Representative. Such notice shall
specify a date when such resignation shall take place, which shall not be less
than 90 days after the date such notice is given, where practicable.
(c) A Trustee may be removed by unanimous vote of the
remaining Trustees in the event that he or she becomes unable to discharge his
or her duties hereunder due to accident or physical or mental deterioration, or
for other good cause. Good cause shall be deemed to include, without limitation,
any substantial failure to comply with the general administration provisions of
Section 2.2 above, a consistent pattern of neglect and failure to perform or
participate in performing the duties of the Trustees hereunder, or repeated
non-attendance at scheduled meetings. Such removal shall require the approval of
the Bankruptcy Court and shall take effect at such time as the Bankruptcy Court
shall determine.
4.4 APPOINTMENT OF SUCCESSOR TRUSTEES.
(a) In the event of a vacancy in the position of PI Trustee,
whether by term expiration, resignation or removal, the remaining Trustees shall
consult with the TAC and the Legal Representative concerning appointment of a
successor PI Trustee. The vacancy shall be filled by the unanimous vote of the
remaining Trustees unless a majority of the TAC or the Legal Representative
vetoes the appointment. In the event that the remaining Trustees cannot agree on
a Successor PI Trustee, or a majority of the TAC or the Legal Representative
vetoes the appointment of a successor PI Trustee, the Bankruptcy Court shall
make the appointment. Nothing shall prevent the reappointment of a PI Trustee
for an additional term or terms.
(b) Immediately upon the appointment of any Successor PI
Trustee, all rights, titles, duties, powers and authority of the predecessor PI
Trustee hereunder shall be vested in, and undertaken by, the Successor PI
Trustee without any further act. No Successor PI Trustee shall be liable
personally for any act or omission of his or her predecessor Trustees.
(c) Each Successor PI Trustee shall serve until the earlier of
(i) the end of a full term of five (5) years if the predecessor PI Trustee
completed his or her term, (ii) the end of the remainder of the term of the PI
Trustee whom he or she is replacing if said predecessor PI Trustee did not
complete said term, (iii) his or her death, (iv) his or her resignation pursuant
to Section 4.3(b) above, (v) his or her removal pursuant to Section 4.3(c)
above, or (vi) the termination of the PI Trust pursuant to Section 7.2 below.
4.5 LIABILITY OF TRUSTEES, OFFICERS AND EMPLOYEES. The Trustees
and the individuals identified as Additional Indemnitees in Section 2.1(c)(xiv)
above shall not be liable to the PI Trust, to any individual holding an asbestos
claim, or to any other person, except for such individual's own breach of trust
committed in bad faith or willful misappropriation. In addition, the Trustees
and the Additional Indemnitees shall not be liable for any act or omission of
any other Trustee or Additional Indemnitee unless such person acted with bad
faith in the selection or retention of such other Trustee or Additional
Indemnitee.
4.6 COMPENSATION AND EXPENSES OF TRUSTEES.
(a) The Trustees shall receive compensation from the PI Trust
for their services as Trustees in the amount of $25,000.00 per annum, plus a per
diem allowance in the amount of $2,000.00 for Trustee meetings and, for Trustees
other than the Managing Trustee only, for other PI Trust business performed. The
Managing Trustee shall be compensated an additional $25,000 per annum for his or
her services as Managing Trustee. For purposes of the per diem allowance, PI
Trust business includes, but is not limited to, attendance at meetings of
Reorganized Raytech's Board of Directors. For purposes of section 7.4 below, the
Trustees shall determine the scope and duration of activities that constitute a
meeting and, if the Trustees elect to provide for payment for activities of less
than a full day's duration, may provide for partial payment of per diem amounts
on a proportional basis for activities of less than a full day's duration. The
per annum and per diem compensation payable to the Trustees hereunder shall be
reviewed every three (3) years and appropriately adjusted for changes in the
cost of living. Any other changes in compensation of the Trustees shall be made
subject to the approval of the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the Trustees for all
reasonable out-of-pocket costs and expenses incurred by the Trustees in
connection with the performance of their duties hereunder.
(c) The PI Trust shall include a description of the amounts
paid under this Section 4.6 in the accounts to be filed with the Bankruptcy
Court and provided to the TAC, the Legal Representative, and Reorganized Raytech
pursuant to Section 2.2(c)(i).
4.7 INDEMNIFICATION OF TRUSTEES AND ADDITIONAL INDEMNITEES.
(a) The PI Trust shall indemnify and defend
(i) the Trustees;
(ii) the Additional Indemnitees,
(iii) any agents, advisors or consultants to the TAC
to the extent agreed by the TAC, and
(iv) any agents, advisors or consultants to the Legal
Representative to the extent agreed by the Legal
Representative
in the performance of their duties hereunder to the fullest extent that a
corporation or trust organized under the laws of the PI Trust's situs is from
time to time entitled to indemnify and defend such persons against any and all
liabilities, expenses, claims, damages or losses incurred by them in the
performance of their duties. The Trustees may at their discretion agree to
indemnify any agents, advisors, or consultants to the Trustees or the PI Trust
to the same extent or to a lesser extent. Notwithstanding the foregoing, no
Trustee or Additional Indemnitee shall be indemnified or defended in any way for
any liability, expense, claim, damage, or loss for which he or she is ultimately
liable under Section 4.5 above.
(b) Reasonable expenses, costs and fees (including attorneys'
fees and costs) incurred by or on behalf of a PI Trustee or Additional
Indemnitee in connection with any action, suit, or proceeding, whether civil,
administrative or arbitrative from which they are indemnified by the PI Trust
pursuant to Section 4.7(a) above, shall be paid by the PI Trust in advance of
the final disposition thereof upon receipt of an undertaking, by or on behalf of
the Trustees or Additional Indemnitee, to repay such amount in the event that it
shall be determined ultimately by final order that such PI Trustee or Additional
Indemnitee is not entitled to be indemnified by the PI Trust.
(c) The Trustees may purchase and maintain reasonable amounts
and types of insurance on behalf of an individual who is or was a PI Trustee or
Additional Indemnitee including against liability asserted against or incurred
by such individual in that capacity or arising from his or her status as a PI
Trustee, TAC member, Legal Representative, officer, employee, agent or other
representative.
4.8 TRUSTEES' LIEN. The Trustees, the TAC, the Legal
Representative, and the Additional Indemnitees shall have a first priority lien
upon the PI Trust assets to secure the payment of any amounts payable to them
pursuant to Section 4.7 above.
4.9 TRUSTEES' EMPLOYMENT OF EXPERTS. The Trustees may, but shall
not be required to, retain and/or consult with counsel, accountants, appraisers,
auditors and forecasters, and other parties deemed by the Trustees to be
qualified as experts on the matters submitted to them, and the opinion of or
information provided by any such parties on any matters submitted to them by the
Trustees shall be full and complete authorization and protection in respect of
any action taken or not taken by the Trustees hereunder in good faith and in
accordance with the written opinion of or information provided by any such
party.
4.10 TRUSTEES' INDEPENDENCE. The Trustees shall not, during the
term of their service, hold a financial interest in, act as attorney or agent
for, or serve as any other professional for Reorganized Raytech. Notwithstanding
the foregoing, any PI Trustee may serve, without any additional compensation
other than the per diem compensation to be paid by the PI Trust pursuant to
Section 4.6(a) above, as a director of Reorganized Raytech. No PI Trustee shall
knowingly act as an attorney for any person who holds a PI Trust Claim.
4.11 BOND. The Trustees shall not be required to post any bond or
other form of surety or security unless so ordered by the Bankruptcy Court.
SECTION 5
TRUST ADVISORY COMMITTEE
5.1 MEMBERS. The TAC shall consist of three members, who shall
initially be the persons named on the signature page hereof.
5.2 DUTIES. The members of the TAC shall serve in a fiduciary
capacity representing all holders of present PI Trust Claims. The Trustees must
consult with the TAC on matters identified in Section 2.2(e) above and in other
provisions herein, and must obtain the consent of the TAC on matters identified
in Section 2.2(f) above. Where provided in the Procedures, certain actions by
the Trustees are also subject to the consent of the TAC.
5.3 TERM OF OFFICE.
(a) The initial members of the TAC shall serve the staggered
three (3), four (4) or five (5) year terms shown on the signature pages hereof.
Thereafter each term of service shall be five (5) years. A member of the TAC
shall serve until the earlier of (i) the end of his or her term; (ii) his or her
death, (iii) his or her resignation pursuant to Section 5.3(b) below, (iv) his
or her removal pursuant to Section 5.3(c) below, or (iv) the termination of the
PI Trust pursuant to Section 7.2 below.
(b) A member of the TAC may resign at any time by written
notice to the other members of the TAC, the Trustees and the Legal
Representative. Such notice shall specify a date when such resignation shall
take effect, which shall not be less than ninety (90) days after the date such
notice is given, where practicable.
(c) A member of the TAC may be removed in the event that he or
she becomes unable to discharge his or her duties hereunder due to accident,
physical deterioration, mental incompetence, or a consistent pattern of neglect
and failure to perform or to participate in performing the duties of such member
hereunder, such as repeated non-attendance at scheduled meetings. Such removal
shall be made at the recommendation of the remaining members of the TAC with the
approval of the Bankruptcy Court.
5.4 APPOINTMENT OF SUCCESSOR.
(a) A vacancy caused by resignation or removal or term
expiration Shall be filled by the unanimous vote of the remaining members of the
TAC. In the event they are unable to agree on a successor, the vacancy shall be
filled by the Bankruptcy Court.
(b) Each successor TAC member shall serve until the earlier of
(i) the end of a full term of five (5) years if the predecessor member completed
his or her term, (ii) the end of the remainder of the term of the member whom he
or she is replacing if said predecessor member did not complete said term, (iii)
his or her death, (iv) his or her resignation pursuant to Section 5.3(b) above,
(v) his or her removal pursuant to Section 5.3(c) above, or (vi) the termination
of the PI Trust pursuant to Section 7.2 below.
5.5 TAC'S EMPLOYMENT OF PROFESSIONALS.
(a) The TAC may but is not required to retain and/or consult
counsel, accountants, appraisers, auditors, forecasters, experts, and financial
and investment advisors, and such other parties deemed by the TAC to be
qualified as experts on matters submitted to the TAC (the "Professionals"). The
TAC and its Professionals shall have complete access to the PI Trust's officers,
employees and agents, as well as to the Professionals retained by the PI Trust,
and shall also have complete access to all information generated by them or
otherwise available to the PI Trust or the Trustees, however, such complete
access shall be subject to reasonable claims of privilege, execution of
reasonable confidentiality agreements where circumstances require, and shall not
include access to information on individual claimants or claims or individual
law firms identified by name. In the absence of gross negligence, the opinion of
or information provided by any Professional deemed by the TAC to be qualified as
an expert on the particular matter submitted to the TAC shall be full and
complete authorization and protection in support of any action taken or not
taken by the TAC in good faith and in accordance with the opinion of or
information provided by the Professional.
(b) The Trust shall promptly reimburse, or pay directly if so
instructed, the TAC for all reasonable fees and costs associated with the TAC's
employment of legal counsel pursuant to this provision in connection with the
TAC's performance of its duties hereunder. The Trust shall also promptly
reimburse, or pay directly if so instructed, the TAC for all reasonable fees and
costs associated with the TAC's employment of any other Professional pursuant to
this provision in connection with the TAC's performance of its duties hereunder;
provided, however, that (i) the TAC has first submitted to the Trust a written
request for such reimbursement setting forth the reasons (A) why the TAC desires
to employ such Professional, and (B) why the TAC cannot rely on Professionals
retained by the Trust to meet the need of the TAC for such expertise or advice,
and (ii) the Trust has approved the TAC's request for reimbursement in writing.
If the Trust agrees to pay for the TAC Professional, such reimbursement shall be
treated as a Trust Expense. If the Trust declines to pay for the TAC
Professional, it must set forth its reasons in writing. If the TAC still desires
to employ such Professional at Trust expense, the TAC and/or the Trustees shall
resolve their dispute pursuant to the procedures set forth in Section 7.13
below.
5.6 COMPENSATION AND EXPENSES OF TAC.
(a) The members of the TAC shall receive compensation from the
PI Trust for their services as TAC members in the amount of $10,000.00 per
annum, plus a per diem allowance for attendance at meetings or other conduct of
PI Trust business in the amount of $1,000.00. For purposes of section 7.4 below,
the TAC shall determine the scope and duration of activities that constitute a
meeting and, if the TAC elects to provide for payment for activities of less
than a full day's duration, it may provide for partial payment of per diem
amounts on a proportional basis for activities of less than a full day's
duration. The per annum and per diem compensation payable to the TAC hereunder
shall be reviewed every three (3) years and appropriately adjusted for changes
in the cost of living. Any other changes in compensation of the TAC shall be
made only pursuant to the Consent Process described in section 5.7(b) below, and
then subject to approval by the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the members of the
TAC for all reasonable out-of-pocket costs and expenses incurred by the TAC
members in connection with the performance of their duties hereunder. Such
reimbursement or direct payment shall be deemed a PI Trust expense.
(c) The PI Trust shall include a description of the amounts
paid under this Section 5.6 in the accounts to be filed with the Bankruptcy
Court and provided to the Trustees, the Legal Representative, and Reorganized
Raytech pursuant to Section 2.2(c)(i).
5.7 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF
THE TAC.
(a) CONSULTATION PROCESS.
(i) In the event the Trustees are required to consult
with the TAC pursuant to Section 2.2(e) above or on other matters as provided
herein, the Trustees shall provide the TAC with written advance notice of the
matter under consideration and, subject to reasonable claims of privilege, with
as much relevant information concerning the matter as is reasonably practicable
under the circumstances. The Trustees shall also provide the TAC with such
reasonable access to experts retained by the PI Trust and its staff (if any) as
the TAC may reasonably request during the time that the Trustees are considering
such matter, and shall also provide the TAC the opportunity, at reasonable times
and for reasonable periods of time, to discuss and comment on such matter with
the Trustees.
(ii) The Trustees shall take into consideration the
time required for the TAC, if its members so wish, to engage and consult with
its own independent financial or investment advisors as to such matter.
(b) CONSENT PROCESS.
(i) In the event the Trustees are required to obtain
the consent of the TAC pursuant to Section 2.2(f) above, the Trustees shall
provide the TAC with a written notice stating that their consent is being sought
pursuant to that provision, describing in detail the nature and scope of the
action the Trustees propose to take, and explaining in detail the reasons why
the Trustees desire to take such action. The Trustees shall provide the TAC as
much relevant additional information concerning the proposed action as is
reasonably practicable under the circumstances, subject to reasonable claims of
privilege. The Trustees shall also provide the TAC with such reasonable access
to experts retained by the PI Trust and its staff (if any) as the TAC may
reasonably request during the time that the Trustees are considering such
action, and shall also provide the TAC the opportunity, at reasonable times and
for reasonable periods of time, to discuss and comment on such action with the
Trustees.
(ii) The TAC must consider in good faith and in a
timely fashion any request for its consent by the Trustees, and must in any
event advise the Trustees in writing of its consent or its objection to the
proposed action within 30 calendar days of receiving the original request for
consent from the Trustees. The TAC may not withhold its consent unreasonably. If
the TAC decides to withhold its consent, it must explain in detail its
objections to the proposed action. If the TAC does not advise the Trustees in
writing of its consent or its objections to the action within 30 days of
receiving notice regarding such request, the TAC's consent to the proposed
actions shall be deemed to have been affirmatively granted.
(iii) If, after following the procedures specified in
this Section 5.7(b), the TAC continues to object to the proposed action and to
withhold its consent to the proposed action, the Trustees and/or the TAC shall
resolve their dispute pursuant to the procedures set forth in Section 7.13.
SECTION 6
THE LEGAL REPRESENTATIVE
6.1 DUTIES. The Legal Representative shall be the individual
identified on the signature pages hereto. He or she shall serve in a fiduciary
capacity, representing the interests of the holders of future PI Trust Claims
for the purpose of protecting the rights of such persons. The Trustees must
consult with the Legal Representative on matters identified in Section 2.2(e)
above and on certain other matters provided herein, and must obtain the consent
of the Legal Representative on matters identified in Section 2.2(f) above. Where
provided in the Procedures, certain actions by the Trustees are also subject to
the consent of the Legal Representative.
6.2 TERM OF OFFICE.
(a) The Legal Representative shall serve until the earlier of
(i) his or her death, (ii) his or her resignation pursuant to Section 6.2(b)
below, (iii) his or her removal pursuant to Section 6.2(c) below, or (iv) the
termination of the PI Trust pursuant to Section 7.2 below.
(b) The Legal Representative may resign at any time by written
notice to the Trustees. Such notice shall specify a date when such resignation
shall take effect, which shall not be less than ninety (90) days after the date
such notice is given, where practicable.
(c) The Legal Representative may be removed by the Bankruptcy
Court in the event he or she becomes unable to discharge his or her duties
hereunder due to accident, physical deterioration, mental incompetence, or a
consistent pattern of neglect and failure to perform or to participate in
performing the duties hereunder, such as repeated non-attendance at scheduled
meetings.
6.3 APPOINTMENT OF SUCCESSOR. A vacancy caused by resignation
shall be filled with an individual nominated prior to the effective date of the
resignation by the resigning Legal Representative, and a vacancy caused by death
or removal of the Legal Representative shall be filled with an individual
nominated by the Trustees, the TAC or both. In any case, the nominee shall be
subject to the approval of the Court.
6.4 LEGAL REPRESENTATIVE'S EMPLOYMENT OF PROFESSIONALS.
(a) The Legal Representative may but is not required to retain
and/or consult counsel, accountants, appraisers, auditors, forecasters, experts,
and financial and investment advisors, and such other parties deemed by the
Legal Representative to be qualified as experts on matters submitted to the
Legal Representative (the "Professionals"). The Legal Representative and his or
her experts shall have complete access at reasonable times to the PI Trust's
officers, employees and agents, as well as to the Professionals retained by the
PI Trust, and shall also have complete access to all information generated by
them or otherwise available to the PI Trust or the Trustees; however, such
complete access shall be subject to reasonable claims of privilege, execution of
reasonable confidentiality agreements where circumstances require, and shall not
include access to information on individual claimants or claims or individual
law firms identified by name. In the absence of gross negligence, the opinion of
or information provided by any Professional deemed by the Legal Representative
to be qualified as an expert on the particular matter submitted to the Legal
Representative shall be full and complete authorization and protection in
support of any action taken or not taken by the Legal Representative in good
faith and in accordance with the opinion of or information provided by the
Professional.
(b) The Trust shall promptly reimburse, or pay directly if so
instructed, the Legal Representative for all reasonable fees and costs
associated with the Legal Representative's employment of legal counsel pursuant
to this provision in connection with the Legal Representative's performance of
his or her duties hereunder. The Trust shall also promptly reimburse, or pay
directly if so instructed, the Legal Representative for all reasonable fees and
costs associated with the Legal Representative's employment of any other
Professionals pursuant to this provision in connection with the Legal
Representative's performance of his or her duties hereunder; provided, however,
that (i) the Legal Representative has first submitted to the Trust a written
request for such reimbursement setting forth the reasons (A) why the Legal
Representative desires to employ the Professional, and (B) why the Legal
Representative cannot rely on Professionals retained by the Trust to meet the
need of the Legal Representative for such expertise or advice, and (ii) the
Trust has approved the Legal Representative's request for reimbursement in
writing. If the Trust agrees to pay for the Legal Representative's Professional,
such reimbursement shall be treated as a Trust Expense. If the Trust declines to
pay for the Legal Representative's Professional, it must set forth its reasons
in writing. If the Legal Representative still desires to employ the Professional
at Trust expense, the Legal Representative and/or the Trustees shall resolve
their dispute pursuant to the procedures set forth in Section 7.13 below.
6.5 COMPENSATION AND EXPENSES OF THE LEGAL REPRESENTATIVE.
(a) The Legal Representative shall receive compensation from
the PI Trust for his or her services as the Legal Representative in the amount
of $25,000.00 per annum, plus payment at the Legal Representative's normal
hourly rate for services performed over and above fifty (50) hours per year. The
per annum compensation payable to the Legal Representative hereunder shall be
reviewed every three (3) years and appropriately adjusted for changes in the
cost of living. Any other changes in compensation of the Legal Representative
shall be made only pursuant to the Consent Process described in section 6.6(b)
below, and then subject to approval by the Bankruptcy Court.
(b) The PI Trust will promptly reimburse the Legal
Representative for all reasonable out-of-pocket costs and expenses incurred by
the Legal Representative in connection with the performance of his or her duties
hereunder. Such reimbursement or direct payment shall be deemed a PI Trust
expense.
(c) The PI Trust shall include a description of the amounts
paid under this Section 6.5 in the accounts to be filed with the Bankruptcy
Court and provided to the Trustees, the Legal Representative, and Reorganized
Raytech pursuant to Section 2.2(c)(i).
6.6 PROCEDURES FOR CONSULTATION WITH AND OBTAINING THE CONSENT OF
THE LEGAL REPRESENTATIVE.
(a) CONSULTATION PROCESS.
(i) In the event the Trustees are required to consult
with the Legal Representative pursuant to Section 2.2(e) above or on any other
matters specified herein, the Trustees shall provide the Legal Representative
with written advance notice of the matter under consideration and with as much
relevant information concerning the matter as is reasonably practicable under
the circumstances, subject to reasonable claims of privilege. The Trustees shall
also provide the Legal Representative with such reasonable access to experts
retained by the PI Trust and its staff (if any) as the Legal Representative may
reasonably request during the time that the Trustees are considering such
matter, and shall also provide the Legal Representative the opportunity, at
reasonable times and for reasonable periods of time, to discuss and comment on
such matter with the Trustees.
(ii) The Trustees shall take into consideration the
time required for the Legal Representative, if he or she so wishes, to engage
and consult with its own independent financial or investment advisors as to such
matter.
(b) CONSENT PROCESS.
(i) In the event the Trustees are required to obtain
the consent of the Legal Representative pursuant to Section 2.2(f) above, the
Trustees shall provide the Legal Representative with a written notice stating
that his or her consent is being sought pursuant to that provision, describing
in detail the nature and scope of the action the Trustees propose to take, and
explaining in detail the reasons why the Trustees desire to take such action.
The Trustees shall provide the Legal Representative as much relevant additional
information concerning the proposed action as is reasonably practicable under
the circumstances, subject to reasonable claims of privilege. The Trustees shall
also provide the Legal Representative with such reasonable access to experts
retained by the PI Trust and its staff (if any) as the Legal Representative may
reasonably request during the time that the Trustees are considering such
action, and shall also provide the Legal Representative the opportunity, at
reasonable times and for reasonable periods of time, to discuss and comment on
such action with the Trustees.
(ii) The Legal Representative must consider in good
faith and in a timely fashion any request for his or her consent by the
Trustees, and must in any event advise the Trustees in writing of his or her
consent or objection to the proposed action within 30 days of receiving the
original request for consent from the Trustees. The Legal Representative may not
withhold his or her consent unreasonably. If the Legal Representative decides to
withhold consent, he or she must explain in detail his or her objections to the
proposed action. If the Legal Representative does not advise the Trustees in
writing of his or her consent or objections to the proposed action within 30
days of receiving the notice from the Trustees regarding such consent, the Legal
Representative's consent shall be deemed to have been affirmatively granted.
(iii) If, after following the procedures specified in
this Section 5.7(b), the Legal Representative continues to object to the
proposed action and to withhold its consent to the proposed action, the Trustees
and/or the Legal Representative shall resolve their dispute pursuant to the
procedures set forth in Section 7.13.
SECTION 7
GENERAL PROVISIONS
7.1 IRREVOCABILITY. The PI Trust is irrevocable.
7.2 TERMINATION.
(a) The PI Trust shall automatically terminate on the date
(the "Termination Date") ninety (90) days after the first to occur of the
following events:
(i) the Trustees decide to terminate the PI Trust
because (A) they deem it unlikely that new asbestos claims will be filed against
the PI Trust, (B) all PI Trust Claims duly filed with the PI Trust have been
liquidated and paid to the extent provided in this PI Trust Agreement and the
Procedures or disallowed by a final, non-appealable order, to the extent
possible based upon the funds available through the Plan, and (C) twelve (12)
consecutive months have elapsed during which no new asbestos claim has been
filed with the PI Trust; or
(ii) if the Trustees have procured and have in place
irrevocable insurance policies and have established claims handling agreements
and other necessary arrangements with suitable third parties adequate to
discharge all expected remaining obligations and expenses of the PI Trust in a
manner consistent with this PI Trust Agreement and the Procedures, the date on
which the Bankruptcy Court enters an order approving such insurance and other
arrangements and such order becomes a final order;
(iii) if in the judgment of the Trustees concerned and
by the TAC and the Legal Representative, the continued administration of the
Trust is uneconomic or inimical to the best interests of the persons holding
Asbestos Related Claims and Demands and the Trustees have obtained an order of
the Court that the termination of the Trust will not expose or subject
Reorganized Raytech or any successor in interest to any increased or undue risk
of having any Asbestos Related Claims and Demands asserted against it or them or
in any way jeopardize the validity or enforceability of the Permanent Channeling
Injunction; or
(iv) to the extent that any rule against perpetuities
shall be deemed applicable to the PI Trust, twenty-one (21) years less
ninety-one (91) days pass after the death of the last survivor of all of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, ▇▇., of Massachusetts living on the date
hereof.
(b) On the Termination Date, after payment of all the PI
Trust's liabilities have been provided for, all monies remaining in the PI Trust
estate shall be given to such organization(s) exempt from federal income tax
under section 501(c)(3) of the Internal Revenue Code, which tax-exempt
organization(s) shall be selected by the Trustees using their reasonable
discretion; provided, however, that (i) if practicable, the activities of the
selected tax-exempt organization(s) shall be related to the treatment of,
research on, or the relief of suffering of individuals suffering from asbestos
related lung disorders, and (ii) the tax-exempt organization(s) shall not bear
any relationship to Reorganized Raytech within the meaning of section 468B(d)(3)
of the Internal Revenue Code. Notwithstanding any contrary provision of the Plan
and related documents, this Section 7.2(b) cannot be modified or amended.
7.3 AMENDMENTS. The Trustees, after consultation with the TAC and
the Legal Representative, and subject to the consent of the TAC and the Legal
Representative, may modify or amend this PI Trust Agreement or any document
annexed to it, including, without limitation, the PI Trust Bylaws or the
Procedures. Any modification or amendment made pursuant to this Article must be
done in writing. Notwithstanding anything contained in this PI Trust Agreement
to the contrary, neither this PI Trust Agreement, the PI Trust Bylaws, the
Procedures, nor any document annexed to the foregoing shall be modified or
amended in any way that could jeopardize, impair, or modify the applicability of
section 524(g) of the Bankruptcy Code, the efficacy or enforceability of the
injunction entered thereunder, or the PI Trust's qualified settlement fund
status under Section 468B of the Internal Revenue Code.
7.4 MEETINGS. The Trustees, the TAC, and the Legal Representative,
shall be deemed to have attended a meeting in the event such person spends a
substantial portion of the day conferring, in person or by telephone conference
call, on PI Trust matters with the TAC, the Legal Representative, or Trustees,
as applicable. A Trustee shall also be deemed to have attended a meeting in the
event he or she spends a substantial portion of the day conferring in person or
by telephone with a claimant or his or her legal representative pursuant to the
Trustees Conference provision in Section 5.2(b)(5) of the Procedures, or in
engaging in activities related to Reorganized Raytech, including attendance at
its Board of Directors meetings. The Trustees, the TAC and the Legal
Representative shall have complete discretion to determine whether a meeting, as
described herein, occurred for purposes of Sections 4.6, 5.6, and 6.5 above.
7.5 SEVERABILITY. Should any provision in this PI Trust Agreement
be determined to be unenforceable, such determination shall in no way limit or
affect the enforceability and operative effect of any and all other provisions
of this PI Trust Agreement.
7.6 NOTICES. Notices to persons asserting claims shall be given
by first class mail, postage prepaid, at the address of such person, or, where
applicable, such person's legal representative, in each case as provided on such
person's claim form submitted to the PI Trust with respect to his or her
Asbestos Disease Claim.
(a) Any notices or other communications required or permitted
hereunder to the following parties shall be in writing and delivered at the
addresses designated below, or sent by telex, telecopy or facsimile pursuant to
the instructions listed below, or mailed by registered or certified mail, return
receipt requested, postage prepaid, addressed as follows, or to such other
address or addresses as may hereafter be furnished in writing to each of the
other parties listed below in compliance with the terms hereof.
To the PI Trust through the Trustees:
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Meltzer, Lippe, Goldstein, Wolf, ▇▇▇▇▇▇▇▇▇ & Sazer
The Chancery
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
With a copy to:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & ▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
To the TAC:
▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Baron & ▇▇▇▇, P.C.
▇▇▇▇ ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Levy, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ & Marias
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇ ▇▇▇-▇▇▇▇
Fax: ▇▇▇ ▇▇▇-▇▇▇▇
With a copy to:
Counsel to be designated by the TAC, if the TAC
so directs in writing to the Trustees
To the Legal Representative:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇
Woodbridge ▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇. ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
Counsel to be designated by the Legal
Representative, if the Legal Representative
so directs in writing to the Trustees
To Reorganized Raytech:
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇, Gump, Strauss, ▇▇▇▇▇ & ▇▇▇▇, LLP
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Tel: ▇▇▇-▇▇▇-▇▇▇▇
Fax: ▇▇▇-▇▇▇-▇▇▇▇
(b) All such notices and communications if mailed shall be
effective when physically delivered at the designated addresses or, if
electronically transmitted, when the communication is received at the designated
addresses and confirmed by the recipient by return transmission.
7.7 SUCCESSORS AND ASSIGNS. The provisions of this PI Trust
Agreement shall be binding upon and inure to the benefit of Raytech, the PI
Trust, the Trustees and Reorganized Raytech, and their respective successors and
assigns, except that neither Raytech, the PI Trust, the Trustees nor Reorganized
Raytech may assign or otherwise transfer any of its, or their, rights or
obligations under this PI Trust Agreement except, in the case of the PI Trust
and the Trustees, as contemplated by Section 2.1 above.
7.8 LIMITATION ON CLAIM INTERESTS FOR SECURITIES LAWS PURPOSES.
PI Trust Claims, and any interests therein (a) shall not be assigned, conveyed,
hypothecated, pledged or otherwise transferred, voluntarily or involuntarily,
directly or indirectly, except by will or under the laws of descent and
distribution; (b) shall not be evidenced by a certificate or other instrument;
(c) shall not possess any voting rights; and (d) shall not be entitled to
receive any dividends or interest; provided, however, that clause (a) of this
Section 7.8 shall not apply to the holder of a claim that is subrogated to a PI
Trust Claim as a result of its satisfaction of such PI Trust Claim.
7.9 ENTIRE AGREEMENT; NO WAIVER. The entire agreement of the
parties relating to the subject matter of this PI Trust Agreement is contained
herein and in the documents referred to herein, and this PI Trust Agreement and
such documents supersede any prior oral or written agreements concerning the
subject matter hereof. No failure to exercise or delay in exercising any right,
power or privilege hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise of any right, power or privilege hereunder preclude
any further exercise thereof or of any other right, power or privilege. The
rights and remedies herein provided are cumulative and are not exclusive of
rights under law or in equity.
7.10 HEADINGS. The headings used in this PI Trust Agreement are
inserted for convenience only and do not constitute a portion of this PI Trust
Agreement, nor in any manner affect the construction of the provisions of this
PI Trust Agreement.
7.11 GOVERNING LAW. This PI Trust Agreement shall be governed by,
and construed in accordance with, the laws of the State of New York without
regard to New York conflict of law principles.
7.12 SETTLOR REPRESENTATIVE AND COOPERATION. Raytech is hereby
irrevocably designated as the Settlor, and it is hereby authorized to take any
action required of the Settlor in connection with the PI Trust Agreement.
Raytech agrees to cooperate in implementing the goals and objectives of this PI
Trust.
7.13 DISPUTE RESOLUTION. Any disputes that arise under this PI
Trust Agreement or under the Procedures, other than disputes arising under the
Procedures concerning the PI Trust's classification of claims which disputes
shall be resolved pursuant to Section 5.2(b)(4) of the Procedures, shall be
resolved by reference to an alternative dispute resolution process mutually
agreeable to the parties involved. Such agreement must be reached within sixty
(60) days of the initial communication of the dispute by the disputing party. If
no agreement is reached on the process within sixty (60) days, the parties shall
jointly apply to the Bankruptcy Court for appointment of an arbitrator who shall
establish the process for decision. Should any party to the alternative dispute
resolution process be dissatisfied with the decision of the arbitrator(s), then
the party may apply within thirty (30) days of the decision to the Bankruptcy
Court for a judicial determination of the matter. Respecting only disputes
resulting from the Legal Representative's retention of professionals under
section 6.4(b) above, should the dispute not be resolved within thirty (30)
days, the parties are relieved of the requirement to pursue alternative dispute
resolution prior to application to the Bankruptcy Court. Notwithstanding
anything else herein contained, to the extent any provision of this PI Trust
Agreement is inconsistent with any provision of the Plan, the Plan shall
control.
7.14 ENFORCEMENT AND ADMINISTRATION. The provisions of this PI
Trust Agreement and the Procedures attached hereto shall be enforced by the
Bankruptcy Court pursuant to the Plan. The parties hereby further acknowledge
and agree that the Bankruptcy Court shall have exclusive jurisdiction over the
settlement of the accounts of the Trustees and over any disputes hereunder not
resolved by alternative dispute resolution in accordance with Section 7.13
above.
7.15 EFFECTIVENESS. This PI Trust Agreement shall not become
effective until it has been executed and delivered by all the parties hereto.
7.16 COUNTERPART SIGNATURES. This PI Trust Agreement may be
executed in any number of counterparts, each of which shall constitute an
original, but such counterparts shall together constitute but one and the same
instrument.
SIGNATURE PAGE FOLLOWS.
IN WITNESS WHEREOF, the parties have executed this PI Trust Agreement
this _____ day of ________________________, _______.
SETTLOR: RAYTECH
By: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------
Name: /S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------
Title: PRESIDENT AND
CHIEF EXECUTIVE OFFICER
-----------------------------
TRUSTEES
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
(Three-year Term)
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
(Four-year Term)
/S/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
(Five-year Term)
The following have agreed to serve as the advisors to the TAC on the
terms set forth in this PI Trust Agreement.
TRUST ADVISORY COMMITTEE
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
(Three-year Term)
/S/ ▇▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------
(Four-year Term)
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
------------------------------------
(Five-year Term)
The following has agreed to serve as the Legal Representative on the
terms set forth in this PI Trust Agreement.
LEGAL REPRESENTATIVE
/S/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
------------------------------------
