Liquidating trust agreement and indemnification

Posted by / 11-Aug-2020 15:01

Liquidating trust agreement and indemnification

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2.below): Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).In connection with either event described in foregoing clauses (i) or (ii) occurring, CFI Holdings has committed to provide (or to cause one or more of its affiliates to provide) an additional ,000,000 loan (the “Additional Loan”) to the New Owner in accordance with certain terms and conditions set forth in the Participation Agreement. Westfahl, in their capacities as trustees of the Trust (the “Trustees”), and North Star I, entered into the Liquidating Trust Agreement.As set forth in the Explanatory Note to this Current Report, on January 31, 2018, Sujan S. North Star I subsequently transferred all of its ownership interests in Holdco to the Trust in exchange for 100% of the outstanding Units pursuant to the Assignment Agreement.In addition, Holdco made representations confirming that CFI Holdings and the Servicer do not owe Holdco any fiduciary duty with respect to any action taken under the Mortgage Loan Documents and, subject to the limited circumstances set forth above, need not consult with Holdco with respect to any action taken by CFI Holdings or the Servicer in connection with the Mortgage Loan.In addition, pursuant to the Participation Agreement, Holdco may not sell, assign, transfer, pledge, syndicate, hypothecate, contribute, encumber or otherwise dispose of all or any portion of the Retained Asset without CFI Holding’s (or it successor’s) prior written consent.WHEREAS, the Merger Agreement provides that, prior to consummation of the Merger, the Company will transfer its indirect ownership interests in the Retained Properties (as defined herein) to a limited liability company formed to complete, after the consummation of the transactions contemplated by the Merger Agreement, the development, lease-up, sale and distribution of the proceeds of the sale of the Retained Properties; WHEREAS, the Company has caused the transfer to Holdco of its indirect ownership interests in the Retained Properties and, after certain contributions, distributions and assignments, the Company received a distribution of 100% of Holdco’s common membership interests; WHEREAS, concurrently with the execution of this Agreement, pursuant to a Bill of Sale, Assignment, Acceptance and Assumption Agreement, the Company has transferred the Holdco common membership interests to the Trust and has received 100% of the units of beneficial interest in the Trust; WHEREAS, pursuant to Section 6.1(f) of the Merger Agreement, prior to the distribution of the units of beneficial interest in the Trust to the Company’s stockholders, the Trust and Holdco are required to agree to indemnify and hold harmless the Company, the Company Subsidiaries (other than the Trust, Holdco, and its subsidiaries), and their respective Representatives (other than the Trust, Holdco, and its subsidiaries) against certain claims, expenses, losses, damages, injury, penalties, settlement, award, obligation, Taxes, interest or any other liabilities (collectively, “ NOW, THEREFORE, in consideration of the foregoing and of the covenants and agreements contained in this Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, and intending to be legally bound hereby, the Parties agree as follows: ” means each real property (including all buildings, structures and other improvements and fixtures located on or under such real property and all easements, rights and other appurtenances to such real property) set forth on ”), jointly and severally, shall indemnify and hold harmless the Company, the Company Subsidiaries (which, for the avoidance of doubt, do not include the Trust, Holdco or its subsidiaries) and their respective Representatives (which, for the avoidance of doubt, do not include the Trust, Holdco or its subsidiaries) (each, an “ ”) against any and all Losses relating to, arising from, or in connection with the Retained Properties, the Excluded Property Transactions and the other transactions contemplated by Section 6.1(f) of the Merger Agreement. Each Indemnifying Party hereby unconditionally, irrevocably and forever releases, acquits and discharges the Indemnified Parties from, and covenants not to sue any of the Indemnified Parties for, any Losses (whether direct or indirect, known or unknown, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, asserted or unasserted, absolute or contingent, determined or conditional, express or implied, fixed or variable and whether vicarious, derivative, joint, several or secondary) relating to the Retained Properties, the Excluded Property Transactions and the other transactions contemplated by Section 6.1(f) of the Merger Agreement which such Indemnifying Party has or had or can, shall or may now or hereafter have against any of the Indemnified Parties.(a) If any Indemnified Party shall receive notice or otherwise learn of a Third-Party Claim with respect to which an Indemnifying Party may be obligated to provide indemnification to such Indemnified Party pursuant to this Agreement, such Indemnified Party shall give such Indemnifying Party written notice thereof demanding indemnification therefor as soon as reasonably practicable, but no later than 30 days after becoming aware of such Third-Party Claim.

Subject to the terms and provisions of the Participation Agreement, the Servicer will have the sole and exclusive authority with respect to the administration of, and exercise of rights and remedies with respect to, the Mortgage Loan, including, without limitation, the sole authority to modify or waive any of the terms of the Mortgage Loan Documents or consent to any action or failure to act by the Borrower or any other party to the Mortgage Loan Documents, call or waive any event of default, accelerate the Mortgage Loan or institute any foreclosure action or other remedy and Holdco will not have any voting, consent or other rights whatsoever with respect to the administration of, or exercise of the rights and remedies of CFI Holdings with respect to, the Mortgage Loan.

Pursuant to the Participation Agreement, all amounts available for payment on or with respect to or in connection with the Mortgage Loan will be distributed by the Servicer in the following order of priority; provided, however, that no Event of Default (as defined in the Mortgage Loan Agreement) with respect to an obligation to pay money due under the Mortgage Loan, no other Event of Default for which the Mortgage Loan is actually accelerated, and no bankruptcy or insolvency event that constitutes an Event of Default (any of the foregoing events, a “Sequential Pay Event”), has occurred and is continuing:third, to CFI Holdings in an amount equal to the accrued and unpaid interest on the principal balance of the Senior Participation at a rate equal to 6.20% plus the greater of (a) the London Interbank Offered Rate (“LIBOR”) for any interest period and (b) 0.25%;fourth, to Holdco in an amount equal to the accrued and unpaid interest on the principal balance of the Retained Asset at a rate equal to 6.20% plus the greater of (a) LIBOR for any interest period and (b) 0.25%;fifth, to CFI Holdings in an amount equal to the Senior Participation’s percentage interest of principal payments received, if any, with respect to the Mortgage Loan, until the principal balance of the Senior Participation has been reduced to zero; sixth, to Holdco in an amount equal to the Retained Asset’s percentage interest of principal payments received, if any, with respect to the Mortgage Loan, until the principal balance of the Retained Asset has been reduced to zero; andseventh, if any excess amount is available to be distributed in respect of the Mortgage Loan, and not otherwise applied in accordance with the foregoing, any remaining amount shall be paid pro rata to CFI Holdings and Holdco in accordance with their respective Percentage Interests (as such term is defined in the Participation Agreement).

If a Sequential Pay Event, as determined by the Servicer, occurs and is continuing, all amounts available for payment on or with respect to or in connection with the Mortgage Loan will be distributed by the Servicer in the following order of priority:third, to CFI Holdings in an amount equal to the accrued and unpaid interest on the principal balance of the Senior Participation at a rate equal to 6.20% plus the greater of (a) LIBOR for any interest period and (b) 0.25%;fifth, to Holdco in an amount equal to the accrued and unpaid interest on the principal balance of the Retained Asset at a rate equal to 6.20% plus the greater of (a) LIBOR for any interest period and (b) 0.25%;seventh, if any excess amount is available to be distributed in respect of the Mortgage Loan, and not otherwise applied in accordance with the foregoing clauses, any remaining amount shall be paid pro rata to CFI Holdings and Holdco in accordance with their respective Percentage Interests.

The Indemnifying Parties shall not settle, compromise or consent to the entry of any judgment in any actual or threatened Third Party Claim in respect of which indemnification has been sought by an Indemnified Party hereunder unless such settlement, compromise or judgment (i) includes an unconditional release of such Indemnified Party from all liability arising out of such Third Party Claim, (ii) could not lead to any liability or create any financial or other obligation on the part of the Indemnified Party for which the Indemnified Party is not entitled to indemnification hereunder or which admits any wrongdoing or responsibility for such Third Party Claim on behalf of the Indemnified Party, or (iii) such Indemnified Party otherwise consents thereto.

If the Indemnifying Parties do not elect to assume the defense and control of a Third Party Claim, the Indemnified Party shall have the right to contest, settle or compromise the Third Party Claim in its sole discretion and shall not thereby waive any right to indemnity therefor pursuant to this Agreement.

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(“ Century ”) sold its 50% interest in Century/ML Cable Venture (the “ Venture ”) pursuant to that certain Interest Acquisition Agreement (the “ Purchase Agreement ”) by and among ML Media Partners, L. (“ ML Media ”), Century, Century ML Cable Venture, Century ML Cable Corp., and San Juan Cable, LLC (the “ Buyer ”);, ML Media and the Venture have asserted various claims against Century, including the Century-ML JV Claims (collectively, the “ ML Media Claims ”), and Century has asserted various claims against ML Media (the “ Century Claims ” and together with the ML Media Claims, the “ Cross-Claims ”);, pending the settlement or judicial resolution of the Cross-Claims, each of Century’s and ML Media’s proceeds from the sale of the Venture are being held in the “ Sellers’ Escrow Account ” pursuant to the terms of the Sellers Escrow Agreement, dated as of October 31, 2005, by and among ML Media, Century, and The Bank of New York, and up to one half of the cash in the Sellers’ Escrow Account is deemed to be part of the CCC Other Unsecured Distribution Reserve with respect to the ML Media Claims;, pursuant to the terms of the Purchase Agreement, $25 million was placed in an escrow account to secure certain indemnification obligations of ML Media and Century and $13.5 million of the purchase price for the Venture is deferred;, pursuant to the Plan and the Confirmation Order, all of the issued and outstanding capital stock of Century (the “ Century Stock ”) is being assigned, granted and transferred by the Debtors to the trust being established pursuant to the terms of this Agreement for the benefit of holders of Allowed Claims in Classes ARA-Notes, ARA-Trade, ARA-Uns and ARA-ESL (collectively, the “ Beneficiaries ”);, on the Effective Date of the Plan, a trust is being formed pursuant to this Agreement, the Plan and the Confirmation Order for the purpose of: (1) holding the Century Stock on behalf of the Beneficiaries, (2) making distributions in respect thereof and (3) maximizing the economic value of the Century Stock by: defending against the ML Media Claims, prosecuting the Century Claims, and enforcing Century’s rights under the Purchase Agreement and in and to the Sellers’ Escrow Account;, in consideration of the premises and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged and agreed, the parties hereto agree as follows:“ Puerto Rico Liquidating Trust ” means the trust and any constructive trusts relating thereto established pursuant to: (a) Section 301.7701-4(d) of the Regulations of the United States Department of the Treasury; and (b) Revenue Procedure 94-45, 1994-2 C. 684, as a grantor trust, subject to the provisions of Subchapter J and Subpart E of the Internal Revenue Code of 1986 (as amended), owned by the Puerto Rico Trust Interest Holders as grantors, and established in accordance with Section 9.03 of the Plan and on and subject to the terms set forth in this Agreement.“ Recovery ” and “ Recoveries ” mean, as applicable, any and all proceeds received by the Puerto Rico Liquidating Trust on or after the Effective Date from: (a) the Century Distribution which will be dependent upon the Century Recoveries; or (b) the liquidation of any other Trust Assets.“ Series ARA-Notes Interests ” means beneficial interests in the Puerto Rico Liquidating Trust to be issued to holders of Claims in Class ARA-Notes under the Plan, with the rights and priority accorded to such interests under this Agreement.“ Series ARA-Trade Interests ” means beneficial interests in the Puerto Rico Liquidating Trust to be issued to holders of Claims in Class ARA-Trade under the Plan, with the rights and priority accorded to such interests under this Agreement.“ Series ARA-Uns Interests ” means beneficial interests in the Puerto Rico Liquidating Trust to be issued to holders of Claims in Class ARA-Uns under the Plan, with the rights and priority accorded to such interests under this Agreement.“ Series ARA-ESL Interests ” means beneficial interests in the Puerto Rico Liquidating Trust to be issued to holders of Claims in Class ARA-ESL under the Plan, with the rights and priority accorded to such interests under this Agreement.“ Trust Assets ” means the Century Stock and all other property held by the Puerto Rico Liquidating Trust under this Agreement (including, without limitation, the Recoveries), and any earnings thereon.“ Trustee ” shall mean the Person performing the duties of the trustee of the trust created by this Agreement, acting in such capacity, initially, the Initial Trustee.

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