Exhibit 10(a)
THIS TRUST AGREEMENT, dated as of November 10, 1997, by and
between INTERSTATE GENERAL COMPANY L.P., a Delaware limited partnership
("IGC") and MARK AUGENBLICK, HANS HERTELL, THOMAS B. WILSON, and J. MICHAEL
WILSON (the "Trustees").
W I T N E S S E T H:
WHEREAS, IGC is the owner of 870,000 shares of the outstanding
common stock, $0.10 par value per share ("CWT Common Stock"), of Caribe
Waste Technologies, Inc., a Puerto Rico corporation ("CWT");
WHEREAS, IGC is the owner of 870,000 shares of the outstanding
common stock, $0.10 par value per share ("IWT Common Stock"), of Interstate
Waste Technologies, Inc., a Delaware corporation ("IWT");
WHEREAS, IGC wishes to deposit all such shares of the CWT Common
Stock and the IWT Common Stock currently held by IGC (collectively, the
"Common Stock") in an independent, irrevocable trust (the "Trust");
WHEREAS, the Common Stock represents all of the issued and
outstanding shares of CWT and IWT except for founder shares held by certain
key employees of CWT and IWT ("Founder Stock");
WHEREAS, the Trustees are willing to act as trustees pursuant to
the terms of this Trust Agreement and to carry out its purposes.
NOW, THEREFORE, the parties hereto agree as follows:
1. IGC hereby appoints Mark Augenblick, Hans Hertell, Thomas B.
Wilson, and J. Michael Wilson as Trustees hereunder, and Mark Augenblick,
Hans Hertell, Thomas B. Wilson, and J. Michael Wilson each hereby accepts
said appointment and agrees to act as Trustee under this Trust Agreement as
provided herein.
2. (a) IGC agrees that it will cause to be delivered to the
Trustees the certificate or certificates representing the Common
Stock, which certificates shall be duly endorsed or accompanied by
proper instruments duly executed for transfer thereof to the Trustees.
All shares of the Common Stock at any time deposited hereunder are
hereinafter called the "Trust Stock". The Trustees shall cause all
certificates representing Trust Stock to be surrendered to and
cancelled by CWT and IWT, and new certificates therefor to be issued
and delivered to the Trustees. Such certificates shall be registered
in the names of the Trustees, as trustees under this Trust. The
Trustees shall hold the Trust Stock until the Trust terminates as
provided in Paragraph 7 or as otherwise provided in Paragraph 8.
(b) The Trustees shall also hold such assets as may from
time to time be delivered to them pursuant to this Trust Agreement.
The Trust Stock and all other assets held by the Trustees under this
Trust Agreement are referred to herein as the Trust Assets.
3. This Trust Agreement shall be irrevocable by IGC and its
affiliates, except in accordance with Paragraph 7 hereof, and shall
terminate only in accordance with the provisions of Paragraph 7 hereof.
4. The Trustees shall manage the Trust Assets in a prudent
manner, provided that they are specifically authorized to retain the Trust
Stock as a Trust Asset subject to Paragraph 7. Unless otherwise directed
by a court of competent jurisdiction, the Trustees shall be entitled and it
shall be their duty to exercise any and all voting rights in respect of the
Trust Stock either in person or by proxy, as hereinafter provided. Except
as provided in Paragraph 10, the Trustees shall not exercise voting or any
other powers under this Trust Agreement to create dependence or an
intercorporate relationship between (i) IGC and its affiliates, on the one
hand, and (ii) CWT, IWT and their affiliates, on the other hand, or to
elect any person as a director of CWT or IWT who has been found by a court
of competent jurisdiction to have violated any federal or state
environmental law. This Paragraph 4 shall be construed in a manner
consistent with the intention of the parties that the conduct of the
business and affairs of CWT and IWT shall be separate from and in no way
under the control of IGC but shall be independently managed and directed by
the Trustees who shall have full power and authority to act as owners of
the Trust Stock. (Wherever used in this Trust Agreement, the term
"affiliate" or "affiliates" shall mean a person controlling, controlled by
or under common control with such entity.) The provisions of this
Paragraph 4 shall not prohibit a Trustee from serving as a director or
officer of IGC or one or more of its affiliates.
5. Subject to the provisions of Paragraphs 4 and 6 hereof, the
Trustees shall have the following powers and authority in the investment
and administration of the Trust Assets, in their discretion:
(a) To purchase, receive, or subscribe for securities or
other property and to retain in trust such securities or other
property.
(b) To sell for cash or on credit or otherwise to dispose
of any securities or other property at any time held by them; to grant
options, convert, redeem, exchange for other securities or other
property; to write call options against or other forms of options
directly related to any such call option outstanding; or to enter into
stand-by agreements for future investment, either with or without a
stand-by fee.
(c) To settle, compromise, or submit to arbitration, any
claims, debts, or damage, due or owing with respect to Trust Assets,
to commence or defend suits or legal proceedings and to represent the
Trust in all suits or legal proceedings with respect to Trust Assets.
(d) To exercise any conversion privilege or subscription
right available in connection with any securities or other property at
any time held by them; to oppose or to consent to the reorganization,
consolidation, merger, or readjustment of the finances of any
corporation, company, or association any of the securities of which
may at any time be held by them and to do any act with reference
thereto, including the exercise of options and the making of
agreements or subscriptions, which may be deemed necessary or
advisable in connection therewith; and to hold and retain any
securities or other property which it may so acquire.
(e) To exercise, personally or by general or limited power
of attorney, any right, including the right to vote, appurtenant to
any securities or other property held by them at any time.
(f) To borrow money in such amounts and upon such terms and
conditions as shall be deemed advisable or proper to carry out the
purposes of this Trust Agreement and to pledge any securities or other
property for the repayment of any such loan; provided, however, that
no such loans shall be made by the Trustees individually.
(g) To hold part or all of the Trust Assets uninvested as
the Trustees may from time to time deem to be in the best interest of
the Trust.
(h) To employ suitable agents and counsel and to pay their
reasonable expenses and compensation.
(i) To register any securities held by them hereunder in
their names or in the name of a nominee with or without the addition
of words indicating that such securities are held in a fiduciary
capacity and to hold any securities in bearer form and to deposit any
securities or other property in a depository or clearing corporation.
(j) To employ advisors, including investment advisors,
which may, but need not, be affiliates of any person serving as
Trustee hereunder.
(k) To form corporations and to create trusts to hold title
to any securities or other property, all upon such terms and
conditions as may be deemed advisable.
(l) To make, execute, and deliver any and all deeds,
leases, mortgages, conveyances, contracts, waivers, releases, or other
instruments in writing necessary or proper for the accomplishment of
any of the foregoing powers.
(m) Generally to do all acts, whether or not expressly
authorized, which the Trustees are legally authorized to do as
shareholders under applicable corporate law and which they deem
necessary or desirable for the protection or enhancement of the Trust
Assets and which are not otherwise expressly prohibited under this
Trust Agreement.
6. Prior to the termination of this Trust as hereinafter
provided, the Trustees shall, immediately following the receipt of each
cash dividend or other monetary distribution as may be declared and paid
upon the Trust Stock, pay the same over to IGC. The Trustees shall receive
and hold dividends other than cash upon the same terms and conditions as
the Trust Stock.
7. (a) IGC may terminate this Trust at any time by notice in
writing to the Trustees. Such termination shall not take effect until
the Trustees shall have disposed of the Trust Assets in accordance
with Paragraph 7(d).
(b) In the event IGC determines to liquidate and dissolve,
IGC shall immediately notify the Trustees of such intent which shall
be deemed a notice of termination under Paragraph 7(a) hereof.
(c) Unless sooner terminated pursuant to any other
provision herein contained, this Trust Agreement shall terminate on
June 30, 2018.
(d) Upon receipt of notice under Paragraphs 7(a) or 7(b)
or, in the case of termination under Paragraph 7(c), the Trustees
shall immediately commence and use their best efforts to complete as
promptly as possible such disposition of Trust Assets as follows:
(i) the Trustees shall negotiate the private sale of
the Trust Assets for cash on such terms and conditions as the Trustees
in their sole discretion shall determine, provided that neither IGC
nor any affiliate of IGC shall be eligible to purchase the Trust
Stock, and the Trustees shall distribute such proceeds to IGC, or
(ii) the Trustees shall distribute the Trust Stock
(either or both of the CWT Common Stock and the IWT Common Stock)
directly to the Unitholders of IGC as of a date determined by the
Trustees, shall sell all other Trust Assets for cash and distribute
such proceeds directly to IGC, and shall cause CWT and/or IWT, as
applicable, to use their reasonable best efforts to make such filings
with the Securities and Exchange Commission and state securities
commissions and to take all such other actions as may be necessary or
appropriate to effect such distribution of the Trust Stock to the
Unitholders of IGC.
The determination of which course of action to pursue shall be solely in
the discretion of the Trustees.
8. Notwithstanding the provisions of Paragraph 7 above, at such
time as the Trustees determine in the exercise of their judgment that the
economic performance of CWT or IWT is sufficient to create a viable public
market for the common stock of such company, the Trustees shall: (a)
distribute the Trust Stock of such company to IGC's unitholders, (b) effect
a public sale of the Trust Stock of such company and remit the net proceeds
to IGC, (c) effect a private sale of such shares or effect a merger with or
acquisition of such company by an unrelated third party and remit the net
cash received to IGC. Unless directed by the Board of Directors of IGC to
distribute any proceeds other than cash to IGC's Unitholders, the Trustees
shall hold any proceeds other than cash upon the same terms and conditions
as the Trust Stock. Any agreement for the disposition of Trust Stock,
other than to IGC or its unitholders, shall offer the same rights to the
holders of Founder Stock in such company.
9. Each of the Trustees who is not a director of CWT or IWT
shall be entitled to receive $15,000 per year as compensation for all
services rendered by him as Trustee under the terms hereof, together with
the reimbursements of all counsel fees or other expenses reasonably
incurred by him hereunder. All such amounts shall be promptly paid by IGC.
IGC shall be entitled to reasonable documentation of such expenses. Each
Trustee who serves as a director of CWT and/or IWT shall also be entitled,
if provided, to directors fees and reimbursement of expenses of attending
meetings of CWT or IWT, as the case may be.
10. IGC, from time to time as reasonably requested by the
Trustees, shall advance or cause to be advanced to the Trust such funds as
may be required to pay the expenses of the Trustees and such additional
funds as may be required to pay any additional expenses of the Trust,
including any cash requirements of the Trust in excess of its available
cash. Nothing in this Trust Agreement shall preclude CWT or IWT from
borrowing from IGC such sums as they may require. Such advances shall be
subject to the approval of the Board of Directors of IGC. All advances
under this Paragraph 10 shall be in the form of loans to the Trust on the
following terms: (i) the loan shall bear interest at 1% over the Prime Rate
published from time to time in The Wall Street Journal on the outstanding
balance of an advance; and (ii) the maturity of each advance shall be not
less than 36 months from the date of such advance.
11. (a) The Trustees shall pay out of the Trust Assets all
income taxes and other taxes of any kind levied or assessed against
the Trust under existing or future laws.
(b) The Trustees shall withhold from all amounts
distributed, or deemed distributed, from the Trust any withholding
taxes that they are required to withhold by law and shall remit such
taxes to the appropriate government agency.
(c) Any and all reasonable and proper expenses of
administration of the Trust, including counsel fees, shall be paid by
the Trust.
12. The Trustees shall keep full and accurate records of all
Trust receipts and disbursements. Any financial statements, books, and
records with respect to the Trust shall be open to inspection by IGC or its
representatives at all reasonable times during business hours of the
Trustees. Within ninety (90) days of the close of each calendar year, or
termination of the Trust, the Trustees shall render to IGC a written report
of their acts and transactions as Trustees hereunder since the end of the
last such reporting period.
13. The Trustees shall be liable only for the Trustees' own acts
or omissions occasioned by the gross negligence or intentional wrongdoing
of the Trustees and shall not be responsible for the acts or omissions of
any predecessor or successor Trustee. The Trustees shall not be personally
liable for any obligations or liabilities of the Trust.
14. The Trustees shall not be answerable for the default or
misconduct of any agent or attorney appointed by them in pursuance hereof
if such agent or attorney shall have been selected with reasonable care.
The duties and responsibilities of the Trustees shall be limited to those
expressly set forth in this Trust Agreement. The Trustees shall not be
responsible for the sufficiency or accuracy of the form, execution,
validity or genuineness of the Trust Stock, or of any documents, or of any
endorsement thereon, or for any lack of endorsement thereof, or for any
description therein, nor shall the Trustees be responsible or liable in any
respect on account of the identity, authority or rights of the persons
executing or delivering or purporting to execute or deliver any such Trust
Stock or document or endorsement on this Trust Agreement, except for the
execution and delivery of this Trust Agreement by the Trustees. IGC agrees
that it will at all times protect, indemnify and save harmless the Trustees
from any loss, cost, or expense of any kind or character whatsoever in
connection with this Trust except those, if any, growing out of the gross
negligence or willful misconduct of the Trustees, and will at all times
itself undertake, assume full responsibility for, and pay all cost and
expense of any suit or litigation of any character, with respect to the
Trust Stock or this Trust Agreement, and if the Trustees shall be made a
party thereto, IGC will pay all costs and expenses, including counsel fees,
to which the Trustees may be subject by reason thereof. The Trustees may
consult with counsel of their choosing and the opinion of such counsel
shall be full and complete authorization and protection in respect of any
action taken or omitted or suffered by the Trustees hereunder in good faith
and in accordance with such opinion.
15. Actions may be taken by the Trustees on behalf of the Trust
upon approval by a majority of the Trustees.
16. To the extent requested to do so by IGC, the Trustees shall
from time to time furnish to IGC full information with respect to (i) all
property theretofore delivered to them as Trustees, (ii) all property then
held by them as Trustees, and (iii) all action theretofore taken by it as
Trustees. The Trustees or any of them may at any time, or from time to
time, submit to the Board of Directors of IGC an accounting showing the
receipts and disbursements of the Trust for the period shown in sufficient
detail to identify the source of all receipts and the payees of any
disbursement and the nature thereof. The Board of Directors of IGC shall
have sixty (60) days from the date of receipt of such accounting to object,
by notice to the Trustee or Trustees submitting such accounts, to any item
included therein. The acceptance by the Board of Directors of IGC of such
accounting, or, in lieu of such acceptance, the failure of the Board of
Directors of IGC to notify the Trustee or Trustees submitting such
accounting of any objection by notice within such sixty (60) days shall be
deemed to be an acceptance thereof, and the Trustee or Trustees submitting
such accounting shall thereafter be relieved and forever discharged from
any responsibility with respect to the matters disclosed in such
accounting. Any notice provided for in this paragraph shall be in writing
and shall be sent to the addressee at his regular business address or, in
lieu thereof, to his principal residence by registered mail, return receipt
requested, by facsimile transmission with telephonic acknowledgment of
receipt or by hand delivery by courier or other service. The date of
receipt shall be the date of such notice.
17. A Trustee, or any trustee hereafter appointed, may at any
time resign by giving sixty (60) days' written notice of resignation to
each other Trustee and IGC. Upon receiving such notice of resignation, the
remaining Trustee(s) shall within 15 days appoint a successor trustee. To
the extent practical, at all times at least one Trustee shall be a person
who is not affiliated as a director, officer or employee of IGC or of any
of its affiliates other than CWT or IWT. If the resigning Trustee is the
last Trustee in office, such resignation shall not become effective until
at least one successor Trustee shall have been appointed and shall have
accepted appointment. Upon receipt by the remaining Trustee(s) of the
resignation of a Trustee or, if the resigning Trustee is the last remaining
Trustee upon written assumption by the successor trustee of the Trustee's
powers and duties hereunder, a copy of the assumption shall be delivered by
the Trustees to IGC, whereupon the resigning Trustee shall be discharged of
his powers and duties hereunder and the successor trustee shall become
vested therewith. No person shall be appointed as Trustee who would not be
eligible under this Trust Agreement to be elected as a director of CWT or
IWT.
18. This Trust Agreement may not be modified or amended and
shall remain in full force and effect until terminated as provided herein.
19. The provisions of this Trust Agreement and of the rights and
obligations of the parties hereunder shall be governed by the laws of
Maryland.
20. The establishment of this Trust Agreement shall not be
construed as conferring any legal rights upon any person not a party to
this Trust Agreement.
21. This Trust Agreement is executed in quintuplicate, each of
which shall constitute an original, and one of which shall be retained by
IGC, the others of which shall be held by the Trustees. A copy of this
Trust shall be lodged at the registered office of CWT and IWT.
22. This Trust Agreement shall be binding upon the successors
and assigns of the parties hereto, including without limitation successors
to IGC by merger, consolidation or otherwise.
IN WITNESS WHEREOF, Interstate General Company L.P. has caused
this Trust Agreement to be executed, and each of the Trustees has executed
this Trust Agreement the day and year first above written.
INTERSTATE GENERAL COMPANY L.P.
By /s James J. Wilson
__________________________
/s/ Mark Augenblick
___________________________
MARK AUGENBLICK
/s/ Hans Hertell
___________________________
HANS HERTELL
/s/ Thomas B. Wilson
___________________________
THOMAS B. WILSON
/s/ J. Michael Wilson
___________________________
J. MICHAEL WILSON