You are on page 1of 18

LIQUIDATING TRUST AGREEMENT This Liquidating Trust Agreement (this "Agreement") dated as of January __, 2013 by and among

CS DIP; LLC, SSHS, LLC; and FNY DIP, LLC (collectively, the "Debtors"), the debtors and debtors-in-possession whose Chapter 11 cases are administered under Case No. 1201573 in the United States Bankruptcy Court for the Middle District of Tennessee (the "Bankruptcy Court"), __________________________________ (the "Trustee"), and the members of the Trust Advisory Committee (the "TAC") identified on the signature page, is entered into pursuant to the Second Amended Joint Plan of Reorganization under Chapter 11 of the Bankruptcy Code of the Debtors and the Official Committee of Unsecured Creditors dated as of January ___, 2013 (as it may be amended or supplemented, the "Plan"). RECITALS WHEREAS, on January __ 2013, the Bankruptcy Court entered the a confirmation order confirming the terms of the Plan (the "Confirmation Order"); and WHEREAS, the liquidating trust established under this Agreement (the "Trust") is created pursuant to, and to effectuate, the Plan and is created on behalf of, and for the sole benefit of, certain holders of Claims and Interests (both as defined in the Plan); and WHEREAS, the Trust is organized for the sole purpose of liquidating its assets for the benefit of the those parties identified in Section 5.3 of the Plan as the Liquidating Trust Beneficiaries (sometimes referred to herein as the "Beneficiaries"), including exercising any Insurance Rights as provided in the Plan, defending against any claim brought by any Insurance Carrier or its agent to rescind, annul, cancel or otherwise limit any Insurance Policies or Insurance Rights, or otherwise exercising any right with respect to insurance provided in the Plan, in accordance with Treasury Regulations Section 301.7701-4(d), with no objective or authority to continue or engage in the conduct of a trade or business; and WHEREAS, the Trust is intended to be a liquidating trust within the meaning of Treasury Regulations Section 301.7701-4(d); NOW, THEREFORE, in consideration of the promises and the mutual covenants contained herein and in the Plan, the Debtors, the Trustee and the TAC agree as follows: ARTICLE I. DEFINITIONS AND INTERPRETATIONS 1.1 Use of Plan Definitions. All capitalized terms used but not defined in this Agreement shall have the same meanings given to them in the Plan. 1.2 Interpretation. This Agreement is intended to effectuate the Plan and therefore incorporates the terms of the Plan as they apply to the Trust or the Trustee. This
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 1 of 18

Desc Main

Agreement shall be interpreted consistently with the terms of the Plan. The headings in this Agreement are for convenience of reference only and shall not limit or otherwise affect the provisions of this Agreement. Words denoting the singular number shall include the plural number and vice versa, and words denoting one gender shall include the other gender. ARTICLE II. DECLARATION OF LIQUIDATING TRUST 2.1 Creation of Trust. The Debtors and the Trustee, pursuant to the Plan and in accordance with Title 11 of the Bankruptcy Code, hereby constitute and create the Trust, which shall bear the name "CS DIP Liquidating Trust". In connection with the exercise of the Trustee's power hereunder, the Trustee may use this name or such variation thereon as the Trustee sees fit. The Debtors have granted, assigned, transferred, issued and/or delivered, on behalf of the Beneficiaries, the Initial Trust Assets (defined in the Plan as the Excess WindDown Budget Funds, if any, all Causes of Action held by any of the Debtors' estates and vested in the Liquidating Trust pursuant to Section 9.6 of the Plan, the right to receive any amounts due to the Debtors or Post-Confirmation Debtors on account of the Insurance Rights or the Coverage Litigation as set forth in Section 5.3 of the Plan, the Equity Interests in the Debtors, and the right to appear on behalf of and in the name of the Debtors to defend, prosecute, protect, manage, compromise, and enforce the Insurance Rights, including the Coverage Litigation) to the Trust as of the Effective Date, free and clear of all liens, claims, encumbrances and interests, in Trust for the benefit of the Beneficiaries to be applied as required by the Trust and the Plan (the Initial Trust Assets, all proceeds therefrom, and any subsequently acquired assets of the Trust, the "Trust Assets"). The Trust may be further funded by contributions from Beneficiaries that the Trustee deems advisable to accept. Pursuant to the Plan, the Trust shall be deemed to have received the Trust Assets from the Debtors and to have transferred them to the Trust as of the Effective Date to hold in trust pursuant to this Agreement. On the Effective Date, in accordance with Section 5.3 of the Plan, the Equity Interests in the Debtors shall be deemed and shall actually be transferred from the respective holders of the Equity Interests to the Trust for the benefit of the Beneficiaries of the Trust without the need for any further action or documentation. Any and all corporate formalities are also hereby deemed to be satisfied in order for such transfer to be given effect; and without limiting the foregoing, the Trustee shall be the sole member of the Post-Confirmation Debtors 2.2 Purpose of Trust. The Trust is established under the laws of the State of Tennessee for the primary purposes of (a) collecting, holding and preserving the value of the Trust Assets for distributions and (b) distributing the Trust Assets as required under this Agreement and the Plan. In furtherance of such purposes and the obligations of the Trust under the Plan, the Trustee shall be responsible for (i) administering, preserving and or liquidating the Trust Assets; (ii) litigating, settling and/or compromising the Causes of Action; (iii) distributing the Trust Assets to holders of Claims denoted in the Plan as Classes 2(a), 2(b), 2(c), 2(d), 3(a), 3(b), 3(c), 3(d), 4(a), 4(b), 4(c), 4(d) and 5(a) (such holders, the "Beneficiaries") and paying Allowed Administrative Expenses from time to time in accordance with the terms of this Agreement and the Plan; (iv) in the Trustee's discretion, subject to the approval of the TAC and the Bankruptcy Court, adopting a Claims Approval Structure and/or Claim Distribution 2
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 2 of 18

Desc Main

Procedures pursuant to Section 4.17(g) of the Plan; (v) preparing and filing tax returns; (vi) responding to inquiries of creditors, (vii) filing and or prosecuting any and all objections to Claims and Administrative Expense claims, provided that, in accordance with section 4.17(c) of the Plan the Trust specifically is not obligated to defend any Class 5(a) Claims; and (viii) filing a motion for Final Order. The activities of the Trust shall be limited to those activities set forth in Article III hereof and those reasonably related or ancillary thereto. The Trustee shall not at any time, on behalf of the Trust or any Beneficiaries, enter into or engage in any trade or business, and the Trustee shall not use or dispose of any part of the Trust Assets in furtherance of any trade or business. 2.3 Appointment and Acceptance of Trustee. The Trustee is hereby named, constituted and appointed as the Trustee, to act and serve as Trustee of the Trust upon and subject to the terms and conditions set forth herein. The Trustee is willing, and does hereby accept the appointment, to act and serve as a Trustee of the Trust, and to hold and administer the Trust Assets pursuant to the terms and conditions of this Agreement and the Plan. The initial Trustee is Kirk P. Watson. 2.4 No Reversion to the Debtors. Except as expressly provided in the Plan or under this Agreement, in no event shall any part of the Trust Assets revert to or be distributed to any of the Debtors. ARTICLE III. ADMINISTRATION OF THE TRUST 3.1 Rights, Powers and Privileges. The Trustee shall have only the rights, powers and privileges expressly provided in this Agreement and/or the Plan. Except as otherwise provided in the Plan or in this Agreement, and subject to the retained jurisdiction of the Bankruptcy Court as provided for in the Plan, but without prior or further authorization of the Bankruptcy Court or any other court, the Trustee may control and exercise authority over the Trust Assets, over the acquisition, management and disposition thereof and over the management and conduct of the affairs of the Trust to the same extent as if the Trustee were the sole owner of the Trust Assets in his own right. No Person dealing with the Trust shall be obligated to inquire into the Trustee's authority in connection with the acquisition, management or disposition of Trust Assets. The Trustee shall have the power to take the actions granted in the subsections below and any powers reasonably incidental thereto, which the Trustee, in his reasonable discretion, deems necessary, appropriate or advisable to fulfill the purposes of the Trust and to comply with the obligations of the Trust under the Plan, unless otherwise specifically limited or restricted by the Plan or this Agreement: 3.1.1 Accept and hold legal title to any and all rights of the Debtors and the Beneficiaries in or arising from the Trust Assets, including the right to vote and sell any securities that are included in the Trust Assets; 3.1.2 Protect and enforce the rights to the Trust Assets vested in the Trustee by this Agreement by any method deemed appropriate including, without limitation, by judicial proceedings or otherwise; 3
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 3 of 18

Desc Main

3.1.3 Obtain financing to fund the ongoing administrative obligations of the Trust or to continue the litigation of the Coverage Litigation or any other insurance-related lawsuits; 3.1.4 Make all distributions provided for in, or contemplated by, the Plan and this Agreement; 3.1.5 Trust; 3.1.6 Make all required tax withholdings, file all tax information returns, make tax elections by and on behalf of the Trust and prepare, or cause to be prepared, and file all required local, state and federal tax returns for the Trust; 3.1.7 Establish such reserves for taxes, assessments and other expenses of administration of the Trust as may be necessary and appropriate for the proper operation of matters incident to the Trust; 3.1.8 Pay all expenses and make all other payments relating to the Trust Assets and the operation of the Trust; 3.1.9 Compensate the Trustee and the TAC members, and their employees, legal, financial, accounting, investment, and other advisors, consultants, independent contractors, and agents, and reimburse the Trustee and the TAC members all reasonable out-of-pocket costs and expenses incurred by such persons in connection with the performance of their duties hereunder; 3.1.10 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 Trust requires, and delegate to such persons such powers and authorities as the fiduciary duties of the Trustee permit and as the Trustee, in his or her discretion, deems advisable or necessary in order to carry out the terms of this Trust; 3.1.11 Enter into any arrangement with counsel the Trustee deems appropriate and employ counsel on a contingency fee or other special billing arrangement to be paid in whole or in part from any proceeds obtained as a result of any litigation; 3.1.12 Exercise all powers of the Trustee or the Trust provided for in the Plan or Confirmation Order and to take all actions that are necessary or appropriate, in the Trustee's discretion, for the Trustee or Trust to take any actions, carry out any duties, or exercise or choose not to exercise any rights or privileges, permitted or given to the Trust to Trustee in the Plan and the Confirmation Order including, without limitation, all powers necessary or appropriate with respect to actions, duties, rights and privileges described in Sections 4.17(c), 4.17(d), and 4.17(e) of the Plan (dealing with Class 5(a) Patient4
B TJM1 1089860 v4 9600000-000034 01/22/2013

Open and maintain bank accounts on behalf, or in the name, of the

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 4 of 18

Desc Main

Related Claims and all related claims against other Entities, including with respect to the Insurance Rights), Sections 4.18(c) and 4.19(c) (dealing, respectively, with rights to settle or release Dentists' and Clinics' claims to insurance coverage or potential coverage), and Section 5.3(a) (dealing with rights and powers permitting the Trust to prosecute, defend, and settle Insurance Rights); 3.1.13 Exercise all rights and powers necessary or appropriate to permit the Trust to prosecute or defend litigation related to the Insurance Rights, including by directing the Post-Confirmation Debtors' litigation of the Coverage Litigation, and to permit the Trust to compromise, settle, release, and receive the proceeds related to the Insurance Rights on behalf of the Debtors, the PostConfirmation Debtors, holders of Patient-Related Claims, Dentists, and Clinics; 3.1.14 Invest any Trust Assets consisting of Cash in demand and short term time deposits or other liquid, temporary investments having maturities consistent with the Trust's obligations to make distributions to Beneficiaries as and when required by this Agreement and the Plan; 3.1.15 Sell, transfer, or exchange any or all of the Trust Assets at such prices and upon such terms as the Trustee may consider proper, consistent with the other terms of this Trust Agreement;; 3.1.16 Take any and all actions necessary to cause the Trust to be or remain in compliance with applicable federal, state and/or local laws, rules and regulations; 3.1.17 Engage in all acts that would constitute ordinary course of business in performing the obligations of Trustee under a Trust of this type; 3.1.18 Establish and maintain the funds, reserves and accounts (other than investment accounts) within the Trust as deemed by the Trustee, in his discretion, to be useful in carrying out the purposes of the Trust; 3.1.19 Sue and be sued and participate, as a party or otherwise, in any judicial, administrative, arbitration or other proceeding; 3.1.20 Subject to the provisions of the Plan, settle any cause of action or any objection, set off or counterclaim which the Trust may hold to a Claim asserted against or by Debtors; 3.1.21 Indemnify and purchase insurance indemnifying the Trustee and members of the TAC and to indemnify (and purchase insurance indemnifying) the employees, agents and representatives of the Trust, the Trustee (including, without limitation, the agents and professionals retained by the Trustee in accordance with Section 3.2 of this Agreement) or TAC, to the fullest extent that a corporation or trust organized under the laws of the Trust's domicile is from 5
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 5 of 18

Desc Main

time to time entitled to indemnify its directors, officers, employees, agents and representatives; 3.1.22 Elect to be treated as, form, cause to be formed, or cooperate in forming, a "qualified settlement fund" as defined in Internal Revenue Code Section 468B and the Treasury Regulations promulgated thereunder, for the benefit of holders of Class 5(a) Claims, to distribute Trust Assets or Equity Interests to the qualified settlement fund and to oversee the operation of the qualified settlement fund; 3.1.23 Enter into agreements binding upon the Trustee and on the Trust and execute, acknowledge and deliver any and all instruments which are necessary, required or deemed advisable by the Trustee, in each case, in connection with the performance of his duties under this Agreement. 3.1.24 Consult with the TAC at such times and with respect to such issues relating to the conduct of the Trust as the Trustee considers desirable or as required under the Plan; 3.1.25 The Trustee shall give the TAC prompt notice of any act performed or taken pursuant to Sections 3.1.1, 3.1.11, or 3.1.18; Notwithstanding the foregoing, except for the reimbursement of expenses and the compensation to be paid to the Trustee out of the Trust Assets in accordance with this Agreement, the Trustee shall not, directly or indirectly, sell or otherwise transfer all or any part of the Trust Assets to the Trustee or any person affiliated with the Trustee. 3.2 Agents and Professionals. The Trustee may consult with and retain counsel, accountants or other professionals as the Trustee deems appropriate to assist the Trustee in the performance of his responsibilities pursuant to the terms of the Trust and the Plan. Any professional employed by the Trust in accordance with this Section 3.2 shall have and maintain appropriate malpractice insurance. The Trustee shall pay the reasonable fees and expenses of such persons out of the Trust Assets. Neither the Trust nor the Trustee shall be liable for any loss to assets or property held by the Trust by reason of any mistake or default of any such counsel, accountants or other professionals, so long as they are selected and retained by the Trustee in good faith and without gross negligence. 3.3 Investment and Safekeeping of Trust Assets. All moneys and other assets received by the Trustee shall, until distributed or paid over as provided in this Agreement or the Plan, be held in the Trust for the benefit of the Beneficiaries. The Trustee shall be under no liability for interest or producing income on any moneys received by it herein and held for distribution or payment to the Beneficiaries, except as such interest shall actually be received by the Trustee. Investments of any moneys held by the Trustee shall be administered in the manner in which individuals of ordinary prudence, discretion and judgment would act in the management of their own affairs.

6
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 6 of 18

Desc Main

3.4 Valuation of Trust Assets. As soon as possible after the Effective Date, the Trustee, in reliance upon such professionals as the Trustee may retain, shall make a good faith valuation of the Trust Assets. Such valuation shall be made available from time to time, to the extent relevant as reasonably determined by the Trustee in reliance on his professionals, and used consistently by all parties for all purposes, including federal income tax purposes. 3.5 Bond. The Trustee shall not be required to post any bond or other form of surety or security unless otherwise ordered by the Bankruptcy Court. 3.6 (a) Term of Service. The initial Trustee shall serve from the Effective Date until the earliest of: (i) (ii) (iii) (iv) his or her death; his or her resignation pursuant to Section 3.5(b) below; his or her removal pursuant to Section 3.5(c) below; or the termination of the Trust.

(b) The Trustee may resign at any time by written notice to the TAC. 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 Trustee may be removed at the recommendation of the TAC with the approval of the Bankruptcy Court, 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 this Agreement, a consistent pattern of neglect and failure to perform or participate in performing the duties of the Trustee 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. 3.7 Appointment of Successor Trustee.

(a) In the event of a vacancy in the Trustee position, whether by death, resignation, or removal, the vacancy shall be filled by the TAC. In the event that the TAC cannot agree on the successor Trustee, the Bankruptcy Court shall make the appointment. (b) Immediately upon the appointment of any successor Trustee, all rights, titles, duties, powers, and authority of the predecessor Trustee hereunder shall be vested in, and undertaken by, the successor Trustee without any further act. No successor Trustee shall be liable personally for any act or omission of his or her predecessor Trustee. 7
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 7 of 18

Desc Main

(c) Each successor Trustee shall serve until the earliest of (i) his or her death; (ii) his or her resignation pursuant to Section 3.5(b) above; (iii) his or her removal pursuant to Section 3.5(c) above; or (iv) the termination of the Trust. 3.8 Compensation and Expenses of Trustee.

(a) The Trustee shall be compensated by payment of a salary to be determined as follows: (i) a minimum of $75,000 per year; (ii) but in any year where the Trust has assets of more than $5,000,000 at any point in the year, a salary of $100,000; (iii) but in any year where the Trust has assets of more than $20,000,000 at any point in the year, a salary of $150,000; (iv) but in any year where the Trust has assets of more than $75,000,000 at any point in the year, a salary of $200,000; (v) but in any year where the Trust has assets of more than $150,000,000 at any point in the year, a salary of $300,000. Notwithstanding the foregoing, in the first year of the Trust's existence the minimum salary will be $150,000 and in the last year of the Trust's existence the minimum salary will be $250,000. (b) The Trust will promptly reimburse the Trustee for all reasonable out-ofpocket costs and expenses incurred by the Trustee in connection with the performance of his or her duties hereunder. 3.9 Trustee's Independence. The Trustee shall not act as an attorney for (a) any person or entity that holds a claim that is or might be entitled to payment by the Trust, (b) any person or entity that may assert rights under any of the insurance policies that the Trust seeks to preserve or maintain for the benefit of patients of the Debtors, the Dentists, or the Clinics, (c) any Dentists, (d) any Clinics, or (e) any former officers, directors, or owners of the Debtors against whom the Trust might assert or have the right to assert claims. ARTICLE IV. DISTRIBUTIONS FROM THE TRUST 4.1 Distributions in General. Distributions of Trust Assets to the Beneficiaries in accordance with their respective Class of Claims shall be made by the Trustee or at least annually in such amounts, at such times and in such manner as provided in the Plan. The Trust shall not retain cash or cash equivalents in excess of a reasonable amount to meet Claims and maintain the value of the Trust Assets during liquidation. 4.2 Payments Limited to Trust Assets. All payments to be made by the Trustee to or for the benefit of any Beneficiary shall be made only from the Trust Assets and only to the extent that the Trustee has sufficient reserves to make such payments as the Trustee deems reasonably necessary or desirable. Each Beneficiary shall have recourse only to the Trust Assets for distributions under the Trust. Neither the Debtors, Reorganized Debtors, nor the Trustee or TAC, or any of their officers, agents, advisors, or employees shall be liable for the payment of any liability of the Trust.

8
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 8 of 18

Desc Main

4.3 Priorities of Distribution. Except as otherwise set forth in the Plan, the Trustee must pay the compensation of the Trustee and TAC and other operating expenses of the Trust out of the Trust Assets before approving or making distributions to or for the Beneficiaries. ARTICLE V. BENEFICIARIES 5.1 Interest Beneficial Only. The ownership of a beneficial interest in the Trust shall not entitle any Beneficiary or the Debtors to any title in or to the Trust Assets or to any right to call for a partition or division of such assets or to require an accounting, except as may be specifically provided herein or in the Plan. 5.2 Ownership of Beneficial Interests Hereunder. Each Beneficiary shall have a beneficial interest in the Trust solely to the extent that such Beneficiary is entitled to a distribution from the Trust in accordance with his or her Class of Claim pursuant to the Plan. Each Beneficiary shall cease to own a beneficial interest in the Trust and cease to be a Beneficiary hereunder for all purposes immediately upon completion of the distribution by the Trust to such Beneficiary as required by this Agreement and the Plan. Because the Plan does not substantively consolidate the estates of the Debtors, each Beneficiary will retain its claim against the respective Debtor against which the claimant held its claim and be directed to recover from the assets of that particular Debtor's estate. However, because the Debtors are parties to the same Insurance Policies, Patient-Related Claims will be directed against the proceeds of such Insurance Policies. The Trust will be responsible for determining the extent of claims against each Debtor and tracking the proceeds of each Debtor's estate, including pursuing Insurance Rights and the potential proceeds of the Insurance Policies. 5.3 Standing of Beneficiary. No Beneficiary shall have standing to request that the Bankruptcy Court remove the Trustee or to direct the Trustee to do or not to do any act other than as described herein. ARTICLE VI. THIRD PARTY RIGHTS AND LIMITATION OF LIABILITY 6.1 Parties Dealing With the Trustee. In the absence of actual knowledge to the contrary, any person dealing with the Trust or the Trustee shall be entitled to rely on the authority of the Trustee or any of the Trustee's agents to act in connection with the Trust Assets. There is no obligation on any person dealing with the Trustee to inquire into the validity or expediency or propriety of any transaction by the Trustee or any agent of the Trustee. 6.2 Reliance on Documents. Except as otherwise provided herein, the Trustee and the Trust shall rely and shall be protected in acting upon any resolution, certificate, statement, instrument, opinion, report, notice, request, consent or other document reasonably believed by the Trustee to be genuine and to have been signed by the proper party or parties. 6.3 Limitation of Trustee's Liability; Standard of Care. Anything herein to the contrary notwithstanding, in exercising the rights granted herein, the Trustee shall exercise the Trustee's best judgment, to the end that the affairs of the Trust shall be properly managed and the 9
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 9 of 18

Desc Main

interests of all the Beneficiaries are safeguarded. Persons or entities dealing with the Trust or the Trustee, or seeking to assert Claims against the Debtors or the Trust, shall look only to the Trust Assets to satisfy any liability to such person, and the Trustee shall have no corporate, personal or individual obligation to satisfy any such liability. The Trustee shall not be liable (i) for any loss or damages by reason of any action taken or omitted by him, except in the case of willful fraud, willful misconduct, bad faith, or gross negligence, or (ii) for any act or omission made in reliance upon advice given to the Trustee by his professionals. 6.4 Indemnification. The Trustee shall be indemnified and receive reimbursement from and against all loss, liability, expense (including counsel fees and expenses) or damage which the Trustee may incur or sustain arising out of, or resulting from, any act taken or omitted to be taken by the Trustee in connection with the exercise and performance of his powers or duties under the Trust, to the fullest extent permitted by applicable law, except if such loss, liability, expense or damage is finally determined by a court of competent jurisdiction to result from the Trustee's willful fraud, willful misconduct, bad faith or gross negligence. The amounts necessary for such indemnification and reimbursement shall be paid by the Trustee out of the Trust Assets. This indemnification shall survive the death, dissolution, resignation or removal, as may be applicable, of the Trustee, or the termination of the Trust, and shall inure to the benefit of the Trustee's heirs and assigns. 6.5 Exculpation. The Trustee, the Trust, and their employees, attorneys, accountants, consultants or agents, shall (a) not have or incur any liability to any person or entity for any act or omission in connection with, or arising out of, the administration of the Plan or the Trust or the property to be distributed under the Plan, except if such act or omission is determined by a Final Order to reflect bad faith or to constitute willful misconduct or gross negligence, (b) be entitled to rely upon the advice of counsel with respect to their duties and responsibilities under the Trust and the Plan, and (c) be fully protected in acting, or in refraining from acting, in accordance with such advice; provided, however, nothing contained herein shall relieve the Trust or the Trustee from their duties and responsibilities to make the payments required by the terms of the Trust and the Plan. No amendment, modification or repeal of this Section 6.5 shall adversely affect any right or protection of the Trustee, the Trust, and their employees, attorneys, accountants, consultants or agents that exists at the time of such amendment, modification or repeal. ARTICLE VII. ADMINISTRATION AND ACCESS TO INFORMATION 7.1 Tax Treatment and Obligation to File Returns. The Beneficiaries shall be treated as the grantors and deemed owners of the Trust Assets. Each Trust Beneficiary shall be required, before any distribution of Trust Assets is made to such holder, to provide the Trustee with an executed IRS Form W-9 or such other appropriate taxpayer identification information as will allow the Trustee to file the appropriate tax return on behalf of the Trust. If a Trust Beneficiary shall fail to provide the Trustee with any requested taxpayer identification information within 90 days after a request for this information, this failure shall be deemed a waiver of all claims against the Trust, including the right to distributions, and the funds that would otherwise have been distributed to such holder shall revert to the Trust to be distributed to other beneficiaries who have provided the requested taxpayer identification information. The 10
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 10 of 18

Desc Main

Trustees shall execute and file tax returns on behalf of the Trust as a grantor trust pursuant to Treasury Regulation Section 1.671.4(a). The transfer of the Trust Assets to the Trust shall be treated for all purposes of the Internal Revenue Code of 1986, as amended, as a deemed transfer to the Beneficiaries by the Debtors and its Estate of any rights that they may have to prosecute the Trust Assets, followed by a deemed transfer by the Beneficiaries to the Trust. The Beneficiaries shall be treated as the grantors and deemed owners of the trust assets that they are deemed to transfer to the Trust. Whether or not the Trustee establishes reserves to pay future Trust expenses, all Trust income shall be treated as subject to tax on a current basis. The Trustee shall allocate the Trust income for each taxable year among the Beneficiaries in accordance with their interests in the Trust, as determined from time to time by the Trustee, and the Beneficiaries shall be responsible for any tax liability that results from said income. 7.2 Additional Reports and Filing. The Trustee shall timely (a) prepare, file and distribute such additional statements, reports and submissions as may be necessary to cause the Trust and the Trustee to be in compliance with applicable law and (b) prepare and file with the Bankruptcy Court such reports and submissions that may be required by the Plan. 7.3 Books and Records. The Trustee shall maintain books and records containing a description of all property from time to time constituting the Trust Assets and an accounting of all receipts and disbursements. The books and records of the Trust shall be open to inspection by any Beneficiary at any reasonable time during normal business hours. The Trustee shall furnish to any Beneficiary upon written request an annual statement of receipts and disbursements of the Trust. Upon termination of the Trust, the Trustee may, without further order of the Bankruptcy Court, but subject to any non-bankruptcy law relating to the retention of books and records, destroy any books and records that the Trustee determines are no longer necessary for the implementation of the Plan. 7.4 Access to Debtors' Books and Records. The Trustee shall be entitled access to the books and records of the Debtors, shall control of the attorney-client privilege or other privileges of the Post-Confirmation Debtors, and shall have all other authority and shall take all other actions described in Section 5.3(f) of the Plan. ARTICLE VIII. TRUST ADVISORY COMMITTEE 8.1 Members. The TAC shall consist of three (3) members, who shall initially be Wes Merillat, James R. Moriaty, and Steve Horton. 8.2 Duties. The members of the TAC shall serve in a fiduciary capacity on behalf of all holders of present Patient-Related Claims and claims against non-debtor entities arising from similar circumstances. Where provided in the Plan, certain actions by the Trustee are also subject to the consent of the TAC. 8.3 Term of Office. 11
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 11 of 18

Desc Main

(a) The initial members of the TAC appointed in accordance with Section 8.1 above shall serve five-year terms. Thereafter, if required, each term of office shall be five (5) years. Each member of the TAC shall serve until the earlier of (i) his or her death, (ii) his or her resignation pursuant to Section 8.3(b) below, (iii) his or her removal pursuant to Section 8.3(c) below, (iv) the end of his or her term as provided above, or (v) the termination of the Trust. (b) A member of the TAC may resign at any time by written notice to the other members of the TAC and the Trustee. 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, or for other good cause. Such removal shall be made at the recommendation of the remaining members of the TAC with the approval of the Bankruptcy Court. 8.4 Appointment of Successor.

(a) If, prior to the termination of service of a member of the TAC other than as a result of removal, he or she has designated in writing an individual to succeed him or her as a member of the TAC, such individual shall be his or her successor. If such member of the TAC did not designate an individual to succeed him or her prior to the termination of his or her service as contemplated above, such member's law firm may designate his or her successor. If (i) a member of the TAC did not designate an individual to succeed him or her prior to the termination of his or her service and such member's law firm does not designate his or her successor as contemplated above or (ii) he or she is removed pursuant to Section 8.3(c) above, his or her successor shall be appointed by a majority of the remaining members of the TAC or, if such members cannot agree on a successor, the Bankruptcy Court. Nothing in this Agreement shall prevent the reappointment of an individual serving as a member of the TAC for an additional term or terms, and there shall be no limit on the number of terms that a TAC member may serve. (b) Each successor TAC member shall serve until the earlier of (i) the end of the full term of five (5) years for which he or she was appointed if his or her immediate predecessor member of the TAC completed his or her term, (ii) the end of the term of the member of the TAC whom he or she replaced if his or her predecessor member did not complete such term (iii) his or her death, (iv) his or her resignation pursuant to Section 8.3(c) above, (v) his or her removal pursuant to Section 8.3(b) above, or (vi) the termination of the Trust. 8.5 TAC's Employment of Professionals. 12
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 12 of 18

Desc Main

(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 "TAC Professionals"). The TAC and the TAC Professionals shall at all times have complete access to the Trust's officers, employees and agents, as well as to the Trust Professionals, and shall also have complete access to all information generated by them or otherwise available to the Trust or the Trustee provided that any information provided by the Trust Professionals shall not constitute a waiver of any applicable privilege. In the absence of gross negligence, the written opinion of or information provided by any TAC Professional or Trust 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 written opinion of or information provided by the TAC Professional or Trust 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 TAC 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 TAC Professional, and (B) why the TAC cannot rely on Trust Professionals 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 Trustee agrees to pay for the TAC Professional, such reimbursement shall be treated as a Trust Expense. If the Trustee declines to pay for the TAC Professional, it must set forth its reasons in writing. If the TAC still desires to employ the TAC Professional at the Trust's expense, the TAC and/or the Trustee shall resolve their dispute pursuant to Section 11.2. 8.6 Compensation and Expenses of the TAC. The members of the TAC shall receive compensation from the Trust for their services as TAC members in the form of a reasonable hourly rate set by the Trustee for attendance at meetings or other conduct of Trust business. The members of the TAC shall also be reimbursed promptly for all reasonable out-ofpocket costs and expenses incurred in connection with the performance of their duties hereunder. Such reimbursement or direct payment shall be deemed a Trust Expense. 8.7 (a) Procedures for Consultation With and Obtaining the Consent of the TAC. Consultation Process.

(i) In the event the Trustee is required to consult with the TAC pursuant to Section 8.2 above or on other matters as provided herein, the Trustee shall provide the TAC with written advance notice of the matter under consideration, and with all relevant information concerning the matter as is reasonably practicable under the circumstances. The Trustee shall also provide 13
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 13 of 18

Desc Main

the TAC with such reasonable access to the Trust Professionals and other experts retained by the Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustee is 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 Trustee. (ii) In determining when to take definitive action on any matter subject to the consultation procedures set forth in this Section 8.7(a), the Trustee 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. In any event, the Trustee shall not take definitive action on any such matter until at least thirty (30) days after providing the TAC with the initial written notice that such matter is under consideration by the Trustee, unless such time period is waived by the TAC. (b) Consent Process.

(i) In the event the Trustee is required to obtain the consent of the TAC pursuant to Section 8.2 above, the Trustee 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 Trustee proposes to take, and explaining in detail the reasons why the Trustee desires to take such action. The Trustee shall provide the TAC as much relevant additional information concerning the proposed action as is reasonably practicable under the circumstances. The Trustee shall also provide the TAC with such reasonable access to the Trust Professionals and other experts retained by the Trust and its staff (if any) as the TAC may reasonably request during the time that the Trustee is 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 Trustee. (ii) The TAC must consider in good faith and in a timely fashion any request for its consent by the Trustee, and must in any event advise the Trustee in writing of its consent or its objection to the proposed action within thirty (30) days of receiving the original request for consent from the Trustee. 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 Trustee in writing of its consent or its objections to the action within thirty (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 8.7(b), the TAC continues to object to the proposed action and to withhold its consent to the proposed action, the Trustee and/or the TAC shall resolve their dispute pursuant to Section 12.2. However, the burden of proof with respect to the 14
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 14 of 18

Desc Main

validity of the TAC's objection and withholding of its consent shall be on the TAC ARTICLE IX. RETENTION OF JURISDICTION 9.1 Retention of Jurisdiction. Pursuant to the Plan and Confirmation Order, except as otherwise set forth in the Plan, in the Confirmation Order or in this Agreement, the Bankruptcy Court shall retain exclusive jurisdiction over any motions, adversary proceedings, contested or litigated matters and any other matter, and any application involving the Trust that may be pending on the Effective Date or brought thereafter. ARTICLE X. DURATION OF TRUST 10.1 Duration. The Trust shall become effective upon the Effective Date and shall remain and continue in full force and effect until the Trust is terminated in accordance with this Agreement. 10.2 Termination Upon Distribution of All Trust Assets. Upon distribution and liquidation of all Trust Assets and payment of all fees, expenses and taxes of the Trust, except as expressly provided herein, the Trust and the responsibilities of the Trustee under the Trust and this Agreement shall terminate. Upon termination of the Trust in accordance with this Agreement, except as expressly provided herein, the Trustee shall be forever discharged of, and released from, all powers, duties and responsibilities under the Trust, this Agreement and the Plan. 10.3 Termination After Ten Years. If the Trust shall not have been previously terminated pursuant to Section 10.2 hereof, on the tenth anniversary of the Effective Date (the "Expiration Date"), the Trustee shall distribute all of the net remaining Trust Assets to the Beneficiaries in accordance with the distribution priorities set forth in the Plan and immediately thereafter, the Trust shall terminate and the Trustee shall have no further responsibility in connection with the Trust, unless the Bankruptcy Court shall, within six (6) months of any Expiration Date, approve extensions of the existence of the Trust for an additional term to be determined by the Bankruptcy Court based upon a finding that such extensions are necessary for the Trust to liquidate the Trust Assets or otherwise fulfill the purposes of the Trust. ARTICLE XI. MISCELLANEOUS 11.1 Notices. All notices to be given to Beneficiaries may be given by ordinary mail, or may be delivered personally, to the holders of beneficial interests in the Trust at the addresses appearing on the books kept by the Trustee or the agent responsible for maintaining the list of holders of beneficial interests in the Trust. Any notice or other communication which may be or is required to be given, served, or sent to the Trustee shall be in writing and shall be sent by registered or certified United States mail, return receipt requested, postage prepaid, or transmitted by hand delivery or facsimile (if receipt is confirmed) addressed as follows: 15
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 15 of 18

Desc Main

If to the Trust:

With a copy to:

If to the Debtors:

With a copy to:

If to the Trust Advisory Committee:

With a copy to:

or to such other address as may from time to time be provided in written notice by the parties. 11.2 Dispute Resolution. Any disputes that arise under this Trust Agreement among the parties hereto shall be resolved by submission to the Bankruptcy Court for a judicial determination of the matter. Any review conducted by the Bankruptcy Court shall be de novo. In any case, if the dispute arose pursuant to the consent provision set forth in Section 8.7(b) (in the case of the TAC), the burden of proof shall be on the party or parties who withheld consent to show that the objection was valid. 11.3 Enforcement and Administration. The provisions of this Trust Agreement shall be enforced by the Bankruptcy Court pursuant to the Plan. The parties hereby further 16
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 16 of 18

Desc Main

acknowledge and agree that the Bankruptcy Court shall have exclusive jurisdiction over the settlement of the accounts of the Trustee and over any disputes hereunder. 11.4 Governing Law. This Agreement and the Trust shall be governed by and construed in accordance with the laws of the State of Tennessee, without reference or giving effect to its conflicts of laws principles. 11.5 Successors and Assigns. This Agreement shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns. 11.6 Particular Words. Reference in this Agreement to any Section or Article is, unless otherwise specified, to that such Section or Article under this Agreement. The words "hereof," "herein," and similar terms shall refer to this Agreement and not to any particular Section or Article of this Agreement. 11.7 Headings. The various headings of this Agreement are inserted for convenience only and shall not affect the meaning or understanding of this Agreement or any provision hereof. 11.8 Bankruptcy Court. Amendment. This Agreement may be amended only by order of the

11.9 Severability. If any term, provision covenant or restriction contained in this Agreement is held by a court of competent jurisdiction or other authority to be invalid, void, unenforceable or against its regulatory policy, the remainder of the terms, provisions, covenants and restrictions contained in this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated.

17
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 17 of 18

Desc Main

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year written above. TRUSTEE DEBTORS: CS DIP, LLC By: Its SSHS, LLC By: Its FNY, LLC Name: By: Its

Name: TRUST ADVISORY COMMITTEE Name:

Name:

18
B TJM1 1089860 v4 9600000-000034 01/22/2013

Case 3:12-bk-01573

Doc 609

Filed 01/25/13 Entered 01/25/13 15:45:06 Document Page 18 of 18

Desc Main

You might also like