SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-B
FOR REGISTRATION OF SECURITIES OF
CERTAIN SUCCESSOR ISSUERS
FILED PURSUANT TO SECTION 12(b) or 12(g) OF THE
SECURITIES EXCHANGE ACT OF 1934
PETRIE STORES LIQUIDATING TRUST
______________________________________________________________
(Exact Name of Registrant as Specified in Charter)
New York Applied For
_______________________________ _____________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
70 Enterprise Avenue
Secaucus, New Jersey 07094
_______________________________ ______________________
(Address of Principal (Zip Code)
Executive Offices)
Securities to be registered pursuant to Section 12(b) of the Act:
________________________________
(Title of Class)
________________________________
Name of Each Exchange on Which
Each Class is to be Registered
Securities to be registered pursuant to Section 12(g) of the Act:
Units of Beneficial Interest
________________________________
(Title of Class)
Item 1. General Information.
(a) This registration statement is being filed
by the Petrie Stores Liquidating Trust (the "Liquidating
Trust"). The Liquidating Trust was created on December
6, 1995, pursuant to an Agreement and Declaration of
Trust, dated as of December 6, 1995 (the "Liquidating
Trust Agreement"), between Petrie Stores Corporation, as
the grantor ("Petrie"), and the persons named therein, as
the trustees (the "Liquidating Trustees"). The Liquidat-
ing Trust Agreement is governed by the laws of the State
of New York.
(b) The Liquidating Trust's fiscal year is the
calendar year.
Item 2. Transaction of Succession.
(a) The common stock, par value $1.00 per
share, of Petrie ("Petrie Common Stock"), the predecessor
of the Liquidating Trust, is registered pursuant to
Section 12(b) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act").
(b) Pursuant to the Plan of Liquidation and
Dissolution (the "Plan of Liquidation") of Petrie, which
was approved by Petrie's shareholders at Petrie's Recon-
vened Annual Meeting of Shareholders on January 24, 1995,
and the Liquidating Trust Agreement, a form of which was
also approved at Petrie's Reconvened Annual Meeting of
Shareholders held on January 24, 1995, Petrie will trans-
fer its remaining assets to, and its remaining fixed and
contingent liabilities will be assumed by (the "Succes-
sion"), the Liquidating Trust, effective as of the close
of business on January 22, 1996, provided that the Suc-
cession may be accelerated or postponed, if necessary, by
the Petrie Board of Directors to the earliest practicable
date following the effectiveness of this Registration
Statement (the "Succession Date").
Each shareholder of Petrie as of the close of
business on the Succession Date will be deemed to become
the holder of one unit of beneficial interest in the
Liquidating Trust (collectively, the "Beneficial Inter-
ests") for each share of Petrie Common Stock owned by
such shareholder. Holders of Petrie Common Stock are not
required to take any action to receive their Beneficial
Interests. Certificates representing shares of Petrie
Common Stock will automatically be deemed to evidence a
corresponding number of Beneficial Interests in the
Liquidating Trust.
As soon as practicable following the Succes-
sion, Petrie will file a Certificate of Dissolution with
the Secretary of State of the State of New York and,
following the receipt of all necessary approvals, con-
sents and clearances, Petrie will dissolve.
Item 3. Securities To Be Registered.
On the Succession Date, there will be
52,350,238 authorized units of Beneficial Interest is-
sued, none of which will be held by or for the account of
the Liquidating Trust.
Item 4. Description of Registrant's Securities To Be
Registered.
The securities to be registered pursuant to
Section 12(g) of the Exchange Act are the units of Bene-
ficial Interest.
The Beneficial Interests represent interests in
the assets (the "Trust Assets") held from time to time by
the Liquidating Trustees for the benefit of the holders of
the Beneficial Interests (collectively, the "Beneficiaries")
pursuant to the Liquidating Trust Agreement. One Beneficial
Interest will be issued for each share of Petrie Common Stock
held as of the close of business on the Succession Date.
Each Beneficiary is entitled to participate in the
rights and benefits due to such Beneficiary under the Liquidating
Trust Agreement according to such Beneficiary's units of Beneficial
Interest. Each Beneficiary takes and holds his or her Beneficial
Interests subject to all the terms and provisions of the
Liquidating Trust Agreement.
At such times as may be determined by the
Liquidating Trustees, and in accordance with the Liqui-
dating Trust Agreement, the Liquidating Trustees will
distribute, or cause to be distributed, to the Beneficia-
ries, in proportion to their respective holdings of
Beneficial Interests, such cash or other property com-
prising a portion of the Trust Assets as the Liquidating
Trustees may in their sole discretion determine may be
distributed without detriment to the conservation and
preservation of sufficient Trust Assets to provide for
the Liquidating Trust's fixed and contingent liabilities;
provided, however, that the Liquidating Trustees may not
make any distributions to Beneficiaries unless (i)
they have notified Toys "R" Us, Inc., a Delaware corpora-
tion ("Toys 'R' Us"), of their intent to make such a
distribution and (ii) Toys "R" Us has either failed to
give notice of its objection to such distribution within
20 days of its receipt of the Liquidating Trustees'
notice or has waived or reduced such time period.
If the Liquidating Trustees determine that all
claims, expenses, charges, liabilities and obligations of
the Liquidating Trust have been paid or discharged, the
Liquidating Trustees will, as expeditiously as is practi-
cable, distribute the remaining Trust Assets to the
Beneficiaries, in proportion to their respective Benefi-
cial Interests, in accordance with the Liquidating Trust
Agreement. The existence of the Liquidating Trust will
terminate upon the earliest of (i) a distribution as described
in the preceding sentence, (ii) a termination required under
the applicable laws of the State of New York or (iii) the
expiration of five years from the date of creation of the
Liquidating Trust, unless the Liquidating Trustees determine
that an extension beyond such five-year period is reasonably
necessary to pay or make provision for the then known
liabilities, actual or contingent, provided that the Liquidating
Trust will not terminate pursuant to this clause (iii) prior
to (a) the date the Liquidating Trustees are permitted to make
a final distribution in accordance with the Liquidating
Trust Agreement or the termination of any escrow agree-
ment to which the Liquidating Trust is a party.
The Liquidating Trustees will hold in the
Liquidating Trust and thereafter make disposition of all
liquidating distributions and other payments due any
Beneficiaries who have not been located in accordance
with New York law, subject to applicable state laws
regarding escheat and abandoned property.
The Beneficial Interests have no par or stated
value and do not confer upon the Beneficiaries any sub-
scription, conversion, redemption, sinking fund or pre-
emptive rights.
The Liquidating Trust will be administered by
no fewer than three nor more than nine Liquidating Trust-
ees (and their respective successors). Initially there
will be five Liquidating Trustees. Pursuant to the
Liquidating Trust Agreement, any Liquidating Trustee may
be removed at any time by the holders of at least a
majority of the total Beneficial Interests. Should at
any time a Liquidating Trustee resign or be removed (with
or without cause), die, become mentally incompetent or
incapable of action (as determined by a majority of the
remaining Liquidating Trustees in their sole discretion),
or be adjudged a bankrupt or insolvent, unless the remaining
Liquidating Trustees decrease the number of Liquidating Trustees
pursuant to the Liquidating Trust Agreement, a vacancy
will be deemed to exist and a successor will be appointed
by the remaining Liquidating Trustees. If such a vacancy
is not filled by the remaining Liquidating Trustees
within 30 days, the Beneficiaries may call a meeting and
appoint a successor Liquidating Trustee by vote of Bene-
ficiaries owning a majority of the Beneficial Interests
represented at the meeting. The Liquidating Trust Agree-
ment does not provide for cumulative voting or classifi-
cation of the Liquidating Trustees.
The Liquidating Trust Agreement may be amended
with the consent of Beneficiaries holding at least a majority
of the total Beneficial Interests, or such greater percent-
age as is specified in the Liquidating Trust Agreement
for the taking of an action by the Beneficiaries under
the affected provisions of the Liquidating Trust Agree-
ment. Amendments to the Liquidating Trust Agreement made
solely for the purpose of facilitating the transferabili-
ty of Beneficial Interests do not require the consent of
Beneficiaries. Notwithstanding the above provisions, the
Liquidating Trust Agreement may not be amended to (i)
permit the Liquidating Trustees to engage in the conduct
of a trade or business or any act other than the holding
and collection of the Trust Assets and the payment and
distribution thereof as set forth in the Liquidating
Trust Agreement or affect the Beneficiaries' rights to
receive their pro rata share of the Trust Assets at the
time of distribution or (ii) affect any right or benefit
of Toys "R" Us under the Liquidating Trust Agreement
without Toys "R" Us' consent.
Item 5. Financial Statements and Exhibits.
(a) Financial Statements.
None.
(b) Exhibits.
2.1 Petrie Proxy Statement, dated as of
November 3, 1994, for Annual Meeting
of Shareholders held December 6, 1994
and January 24, 1995 (incorporated by
reference to definitive copy of the
Petrie Proxy Statement filed with the
Commission on November 3, 1994 (File
No. 1-6166), pursuant to Rule 14a-6).
2.2 Plan of Liquidation and Dissolution
of Petrie.
3.1 Liquidating Trust Agreement, dated as
of December 6, 1995, between Petrie,
as grantor, and the persons named
therein, as trustees.
SIGNATURES
Pursuant to the requirements of Section 12 of
the Exchange Act, the registrant has duly caused this
registration statement to be signed on its behalf by the
undersigned, thereto duly authorized.
PETRIE STORES LIQUIDATING TRUST
(Registrant)
By /s/ JOSEPH H. FLOM
Name: Joseph H. Flom
Title: Trustee
By /s/ STEPHANIE R. JOSEPH
Name: Stephanie R. Joseph
Title: Trustee
By /s/ BERNARD PETRIE
Name: Bernard Petrie
Title: Trustee
By /s/ LAURENCE A. TISCH
Name: Laurence A. Tisch
Title: Trustee
By /s/ RAYMOND S. TROUBH
Name: Raymond S. Troubh
Title: Trustee
Dated: December 18, 1995
PLAN OF LIQUIDATION AND DISSOLUTION
OF
PETRIE STORES CORPORATION
The following Plan of Liquidation and
Dissolution (the "Plan") shall effect the complete
liquidation and dissolution of PETRIE STORES CORPORATION,
a New York corporation ("Petrie"), in accordance with
Sections 368(a)(1)(C), 368(a)(2)(G) and 361(c) of the
Internal Revenue Code of 1986, as amended (the "Code"),
and Article 10 of the New York Business Corporation Law
(the "NYBCL").
1. Adoption of Plan. The Plan shall become
effective, subject to the conditions hereinafter
provided, upon its approval and adoption by the
affirmative vote of the holders of record of two-thirds
of the outstanding shares of Petrie's common stock, par
value $1.00 per share ("Petrie Common Stock"), voting at
a shareholders meeting called for such purpose. Such
approval of the Plan shall constitute approval by
Petrie's shareholders of the sale of substantially all of
the assets of Petrie in accordance with Section 909 of
the NYBCL and approval of each of the other actions
contemplated by the Plan.
2. The Exchange. Within the twelve-month
period beginning on the date on which the Plan becomes
effective (the "Liquidation Period"), and pursuant to the
Acquisition Agreement, dated April 20, 1994, as amended
on May 10, 1994, between Petrie and Toys "R" Us, Inc., a
Delaware corporation ("Toys"), Petrie shall exchange with
Toys all of the shares of Toys common stock, par value
$.10 per share ("Toys Common Stock") held by certain
subsidiaries of Petrie and cash (up to $250 million) for
a number of shares of Toys Common Stock equal to (a) the
number of shares of Toys Common Stock held by Petrie,
less approximately 3.3 million shares of Toys Common
Stock, plus (b) such amount of cash divided by the market
value of a share of Toys Common Stock (the "Exchange").
3. The Disposition. Within the Liquidation
Period, Petrie shall have the authority to engage in such
transactions as may be appropriate to the sale or other
disposition (the "Disposition") of (i) the stock of any
subsidiary of Petrie engaged in retail operations and
(ii) any retail assets held directly or indirectly by
Petrie (the "Retail Operations").
4. Sale of Other Assets. Within the
Liquidation Period, Petrie shall have the authority to
engage in such other transactions as may be appropriate
to its complete liquidation and dissolution, including
without limitation, the authority to mortgage, pledge,
sell, lease, exchange or otherwise dispose of all or any
part of its other assets for cash and/or shares, bonds,
or other securities or property upon such terms and
conditions as Petrie's Board of Directors shall
determine, with no further approvals by Petrie's
shareholders except as required by law.
5. Provision for Liabilities. Within the
Liquidation Period, Petrie shall pay or discharge, or set
aside cash, Toys Common Stock, or other assets for the
payment or discharge of, or to otherwise provide for, its
liabilities and obligations, including contingent or
unascertained liabilities and obligations determined or
otherwise reasonably estimated to be due either by
Petrie's Board of Directors or a court of competent
jurisdiction (the "Liabilities"). The foregoing may be
accomplished by use of one or more trusts (including a
liquidating trust), escrows, plans or other arrangements
as determined by Petrie's Board of Directors or required
by law, and Petrie's shareholders by adoption of this
Plan do constitute and appoint any agent or trustee under
the arrangement provided by the Board of Directors
pursuant to this Paragraph 5 as the agent or trustee for
the limited purposes provided in the agreement in which
such purposes are set forth.
6. Distribution to Shareholders. Upon the
consummation of the Exchange and the Disposition, and
within the Liquidation Period, Petrie shall distribute
(the "Initial Distribution") to its shareholders their
pro rata share of the shares of Toys Common Stock
received by Petrie in the Exchange and all of Petrie's
cash, if any, other than such shares of Toys Common Stock
and cash set aside for the payment of the Liabilities
(the "Retained Assets"), in one or more distributions, at
such time and in such manner as Petrie's Board of
Directors, in its discretion, shall deem advisable.
7. Escrow Accounts. Petrie, at such time as
its Board of Directors shall deem practicable, but in any
event within the Liquidation Period, shall create and
execute with one or more agents (the "Agents") selected
by Petrie's Board of Directors, one or more escrow
agreements substantially in the form annexed hereto as
Exhibit A (the "Escrows"), and transfer to the Agents of
the Escrows physical possession of all or a portion of
the Retained Assets (the "Escrowed Assets"). The
Escrowed Assets will be held by the Escrow Agents to
provide for certain of the Liabilities and for
distributions to beneficiaries of the Liquidating Trust
(as defined below). Pursuant to the terms of the
Liquidating Trust Agreement (as defined below), Petrie
will grant, assign and convey all rights of ownership of
the Retained Assets, subject to the terms and provisions
of the Escrows, to the Liquidating Trust.
8. Liquidating Trust. Petrie, at such time
as its Board of Directors shall deem practicable, but in
any event within the Liquidation Period, shall (i) create
and execute with trustees ("Trustees") who were selected
by Petrie's Board of Directors, a liquidating trust
agreement substantially in the form annexed hereto as
Exhibit B (the "Liquidating Trust Agreement") to
establish a liquidating trust (the "Liquidating Trust"),
(ii) grant, assign, and convey to the Trustees of the
Liquidating Trust all rights of ownership of the Retained
Assets, subject to the terms and provisions of the
Escrows and all of the Liabilities and (iii) distribute
interests in the Liquidating Trust to its shareholders
(this section 8, together with the Initial Distribution,
shall be referred as the "Liquidation").
(a) No distributions of any of the assets held
by the Trustees of the Liquidating Trust shall be
made by the Trustees other than as provided by the
express terms and provisions of the Liquidating
Trust Agreement, and no assets held by the Trustees
shall ever revert or be distributed to Petrie or to
any Petrie shareholder, as such, other than a former
Petrie shareholder entitled thereto as provided in
the Liquidating Trust Agreement. Assets held in the
Liquidating Trust shall be distributed to the
beneficiaries of the Liquidating Trust at the time
and under the conditions set forth in the express
terms and provisions of the Liquidating Trust
Agreement.
(b) It is intended that the assignment of the
assets to the Trustees of the Liquidating Trust
shall, subject to the terms and provisions of the
Liquidating Trust Agreement, constitute a final
liquidating distribution by Petrie to its
shareholders of their pro rata interests in such
assets, and Petrie's shareholders shall be the
owners of the Liquidating Trust within the meaning
of Sections 671 through 679 of the Code.
9. Abandonment of Plan. If the Exchange and
the Disposition are not consummated within the
Liquidation Period for any reason, Petrie's Board of
Directors may, without further action by its
shareholders, abandon all or part of the Plan.
10. Filing of Forms. The officers of Petrie
are authorized and directed to execute and file United
States Treasury Form 966 pursuant to Section 6043 of the
Code within 30 days after the adoption of the Plan in
accordance with Paragraph 1 hereof, and such other forms
and reports as may be necessary to comply with the
requirements of any foreign, state or local law, and such
additional forms and reports with and to the Internal
Revenue Service or other taxing authorities as may be
necessary, desirable or appropriate in connection with
the execution of the Plan.
11. Dissolution. Upon the consummation of the
Exchange, the Disposition and the Liquidation, the Board
of Directors shall execute and file a certificate of
dissolution of Petrie in accordance with Sections 1003
and 1004 of the NYBCL. After dissolution, Petrie shall
carry on no business except for the purpose of winding up
its affairs in accordance with Article 10 of the NYBCL
and the Liquidating Trust Agreement.
12. Authorization to Board of Directors,
Officers. Petrie's Board of Directors and officers are
authorized to approve such changes to the terms of any of
the transactions referred to herein, to interpret any of
the provisions of the Plan, and to make, execute and
deliver such other agreements, conveyances, assignments,
transfers, certificates and other documents and take such
other action as such Board of Directors and officers deem
necessary or desirable in order to carry out the
provisions of the Plan and effect the complete
liquidation and dissolution of Petrie in accordance with
Sections 368(a)(1)(c), 368(a)(2)(G) and 361(c) of the
Code and Article 10 of the NYBCL.
LIQUIDATING TRUST AGREEMENT
By and Between
PETRIE STORES CORPORATION,
as the Grantor,
and
THE PERSONS NAMED HEREIN,
as the Trustees
Dated as of December 6, 1995
TABLE OF CONTENTS
ARTICLE I
NAME AND DEFINITIONS
1.1. Name . . . . . . . . . . . . . . . . . . . . 2
1.2. Certain Terms Defined . . . . . . . . . . . 2
ARTICLE II
NATURE OF TRANSFER
2.1. Purpose of Trust . . . . . . . . . . . . . 3
2.2. Prohibited Activities . . . . . . . . . . . 4
2.3. No Reversion to Petrie . . . . . . . . . . 4
2.4. Instruments of Further Assurance . . . . . 4
2.5. Payment of Liabilities . . . . . . . . . . 4
2.6. Incidents of Ownership . . . . . . . . . . 5
2.7. Notice to Unlocated Shareholders . . . . . 5
ARTICLE III
BENEFICIARIES
3.1. Beneficial Interests . . . . . . . . . . . 5
3.2. Rights of Beneficiaries . . . . . . . . . . 6
3.3. Transfer of Interests of Beneficiaries . . 6
3.4. Trustees as Beneficiaries . . . . . . . . . 7
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.1. Duration . . . . . . . . . . . . . . . . . 7
4.2. Other Obligations of Trustees Upon
Termination . . . . . . . . . . . . . . 7
ARTICLE V
ADMINISTRATION OF TRUST
5.1. Sale of Trust . . . . . . . . . . . . . . 7
5.2. Transactions with Related Persons . . . . . 7
5.3. Restriction on Trust Assets . . . . . . . . 8
5.4. Payment of Claims, Expenses and Liabilities 8
5.5. Interim Distributions . . . . . . . . . . . 8
5.6. Final Distribution . . . . . . . . . . . . 8
5.7. Reports to Beneficiaries and Others . . . . 9
5.8. Federal Income Tax Information . . . . . . 9
5.9. Employment of Manager . . . . . . . . . . 9
ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEES
6.1. Limitations on Trustees . . . . . . . . . . 10
6.2. Specific Powers of Trustees . . . . . . . . 11
ARTICLE VII
CONCERNING THE TRUSTEES,
BENEFICIARIES, EMPLOYEES AND AGENTS
7.1. Generally . . . . . . . . . . . . . . . . . 13
7.2. Reliance by Trustees . . . . . . . . . . . 13
7.3. Liability to Third Persons . . . . . . . . 14
7.4. Recitals . . . . . . . . . . . . . . . . . 14
7.5. Indemnification . . . . . . . . . . . . . . 14
7.6. Rights of Trustees, Employees, Independent
Contractors and Agents To Own Units or Other
Property and To Engage in Other Business . 15
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
8.1. Action by Trustees . . . . . . . . . . . . 16
8.2. Delegation . . . . . . . . . . . . . . . . 16
8.3. Reliance on Statement by Trustees . . . . . 16
ARTICLE IX
COMPENSATION OF TRUSTEES
9.1. Amount of Compensation . . . . . . . . . . 17
9.2. Dates of Payment . . . . . . . . . . . . . 17
9.3. Expenses . . . . . . . . . . . . . . . . . 17
ARTICLE X
TRUSTEES AND SUCCESSOR TRUSTEES . . . . 17
10.1. Number and Qualification of Trustees . . . 17
10.2. Resignation and Removal . . . . . . . . . . 17
10.3. Appointment of Successor . . . . . . . . . 18
10.4. Acceptance of Appointment by Successor
Trustee . . . . . . . . . . . . . . . . 18
10.5. Bonds . . . . . . . . . . . . . . . . . . . 18
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.1. Evidence of Action by Beneficiaries . . . . 18
11.2. Limitation on Suits by Beneficiaries . . . 19
11.3. Requirement of Undertaking . . . . . . . . 19
ARTICLE XII
MEETING OF BENEFICIARIES
12.1. Purpose of Meetings . . . . . . . . . . . . 19
12.2. Meeting Called by Trustees . . . . . . . . 19
12.3. Meeting Called on Request of Beneficiaries 19
12.4. Persons Entitled to Vote at Meeting of
Beneficiaries . . . . . . . . . . . . . . 20
12.5. Quorum . . . . . . . . . . . . . . . . . . 20
12.6. Adjournment of Meeting . . . . . . . . . . 20
12.7. Conduct of Meetings . . . . . . . . . . . . 20
12.8. Record of Meeting . . . . . . . . . . . . . 20
ARTICLE XIII
AMENDMENTS
13.1. Consent of Beneficiaries . . . . . . . . . 20
13.2. Notice and Effect of Amendment . . . . . . 21
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1. Filing Documents . . . . . . . . . . . . . 21
14.2. Intention of Parties to Establish Trust . . 21
14.3. Beneficiaries Have No Rights or Privileges as
Shareholders of Petrie . . . . . . . . . 21
14.4. Third Party Beneficiary . . . . . . . . . . 21
14.5. Certain Claims . . . . . . . . . . . . . . 22
14.6. Laws as to Construction . . . . . . . . . . 22
14.7. Severability . . . . . . . . . . . . . . . 22
14.8. Notices . . . . . . . . . . . . . . . . . . 22
14.9. Specific Performance . . . . . . . . . . . 22
14.10. Counterparts . . . . . . . . . . . . . . . 24
14.11. Binding . . . . . . . . . . . . . . . . . 24
LIQUIDATING TRUST AGREEMENT
AGREEMENT AND DECLARATION OF TRUST, dated as of
December 6, 1995, by and between Petrie Stores
Corporation, a New York corporation ("Petrie"), and
Joseph H. Flom, Stephanie R. Joseph, Bernard Petrie,
Laurence A. Tisch, and Raymond S. Troubh, as Trustees
(collectively, the "Trustees").
WHEREAS, Petrie and Toys "R" Us, Inc., a Delaware
corporation ("Toys"), are parties to an Acquisition
Agreement, dated April 20, 1994, as amended on May 10,
1994 (the "Acquisition Agreement"), pursuant to which
Petrie has agreed to exchange with Toys all of the shares
of Toys common stock, par value $.10 per share ("Toys
Common Stock"), previously held by certain subsidiaries
of Petrie and presently held by Petrie, and cash (up to
$250 million) for a number of shares of Toys Common
Stock, equal to (a) the number of shares of Toys Common
Stock held by Petrie less approximately 3.3 million
shares of Toys Common Stock, plus (b) such amount of cash
divided by the market value of a share of Toys Common
Stock (the "Exchange");
WHEREAS, the Exchange, in conjunction with the
complete liquidation of Petrie, is intended to qualify as
a tax-free reorganization under Sections 368(a)(1)(C) and
(a)(2)(G) of the Internal Revenue Code of 1986, as
amended (the "Code");
WHEREAS, Petrie's Board of Directors anticipates
that Petrie may not be able to fully wind up all of its
affairs prior to the date by which Petrie must dissolve,
and therefore have made specific arrangements for such
contingency in the Plan of Liquidation and Dissolution
(the "Plan of Liquidation and Dissolution");
WHEREAS, on November 1, 1994, Petrie's Board of
Directors voted to submit to its shareholders, among
other things, (i) the disposition of Petrie's retail
store operations (the "Disposition"), (ii) the Exchange,
and (iii) the establishment of a liquidating trust and
the complete liquidation and dissolution of Petrie (the
"Liquidation," and together with the Exchange and
Disposition, the "Transaction"), and on December 6, 1994,
Petrie's shareholders approved the Disposition, and on
January 24, 1995, Petrie's shareholders approved the
Exchange and the Liquidation, authorizing the complete
liquidation and dissolution of Petrie pursuant to the
Plan of Liquidation and Dissolution (the "Plan"); and
WHEREAS, the Plan, among other things, (i)
provides that upon consummation of the Exchange, Petrie
will distribute pro rata to its shareholders all of its
assets consisting of Toys Common Stock and cash, if any,
other than such assets retained by Petrie or set aside in
escrow (the "Retained Assets") to provide for the payment
of all liabilities of Petrie, (ii) provides for the
establishment of a liquidating trust pursuant to the
terms and conditions hereof (the "Trust") and the
establishment of one or more escrow accounts
(collectively, the "Escrow Accounts"), pursuant to the
terms and conditions of one or more escrow agreements
(collectively, the "Escrow Agreements"), (iii) provides
the methods by which both the Trustees were selected to
serve as agents of the Beneficiaries (as defined below)
and trustees of the Trust, and escrow agents were
selected to administer the Escrow Accounts, (iv)
authorizes and directs Petrie to grant, assign and convey
the Retained Assets to the Trustees as agents for the
Beneficiaries (as defined below) in cancellation of the
interest of the Shareholders in Petrie, subject to the
terms and provisions of the Escrow Agreements, and to
transfer physical possession of all or a portion of the
Retained Assets to the Escrow Agents, and (v) authorizes
and directs the Trustees to allocate, hold and distribute
the Trust Assets for and on behalf of the Beneficiaries
in accordance with the terms and conditions hereof.
NOW, THEREFORE, in consideration of the
premises, Petrie hereby, subject to the terms and
provisions of the Escrow Agreements, effective as of the
close of business on the Succession Date, grants,
releases, assigns, conveys and delivers unto the Trustees
for the benefit of the beneficiaries of the Trust (the
"Beneficiaries"), all of Petrie's right, title and
interest in and to the Retained Assets for the uses and
purposes stated herein, subject to the terms and
provisions set out below, and the Trustees hereby accept
such assets and such Trust, subject to the following
terms and provisions:
ARTICLE I
NAME AND DEFINITIONS
1.1. Name. This trust shall be known as the
Petrie Stores Liquidating Trust.
1.2. Certain Terms Defined. For all purposes
of this instrument, unless the context otherwise
requires:
(a) Affiliated Person shall mean a Person
(i) who in his individual capacity is a director,
trustee, officer, partner or employee of the Manager
or of a Person who controls, is controlled by or is
under common control with the Manager or (ii) who
controls, is controlled by or is under common
control with the Manager.
(b) Affiliated Trustee shall mean a
Trustee (i) who in his individual capacity is a
director, trustee, officer, partner or employee of
the Manager or of a Person who controls, is
controlled by or is under common control with the
Manager or (ii) who controls, is controlled by or is
under common control with the Manager.
(c) Agreement shall mean this instrument
as originally executed or as it may from time to
time be amended pursuant to the terms hereof.
(d) Beneficial Interest shall mean each
Beneficiary's proportionate share of the Trust
Assets initially determined by the ratio of the
number of Shares held by the Initial Beneficiary on
the close of business on the Record Date over the
total number of Shares issued and outstanding on
such Record Date and thereafter each Beneficiaries'
proportional beneficial interest in the Trust.
(e) Initial Beneficiary shall mean each
of the Shareholders.
(f) Manager shall mean such Person or
Persons who have been employed by, or who have
contracted with, the Trustees to assist in the
management of the Trust.
(g) Person shall mean an individual, a
corporation, a partnership, an association, a joint
stock company, a limited liability company, a trust,
a joint venture, any unincorporated organization, or
a government or political subdivision thereof.
(h) Record Date shall mean the date
selected by the Board of Directors of Petrie for
determination of the shareholders of Petrie entitled
to become Beneficiaries.
(i) Shares shall mean the shares of
common stock, par value $1.00 per share, of Petrie.
(j) Shareholders shall mean the holders
of record of the outstanding Shares of Petrie at the
close of business on the Record Date.
(k) Succession Date shall mean the date
on which the first distribution of assets of Petrie
to the Trustees occurs, which date shall be the
close of business on January 22, 1996, provided that
the Succession Date may be accelerated or postponed
(if necessary) by the Petrie Board of Directors to
the earliest practicable date following the
effectiveness of the Trust's Registration Statement
on Form 8-B.
(l) Trust shall mean the Trust created by
this Agreement.
(m) Trust Assets shall mean all the
property held from time to time by the Trustees
under this Agreement, which initially shall consist
of the Retained Assets granted, assigned and
conveyed to the Trustees by Petrie pursuant to the
Plan of Liquidation and Dissolution, and, in
addition, shall thereafter include all dividends,
rents, royalties, income, proceeds and other
receipts of, from, or attributable to any assets
held by the Trust.
(n) Trustees shall mean the original
Trustees and their successors.
ARTICLE II
NATURE OF TRANSFER
2.1. Purpose of Trust.
(a) The Trust is organized for the sole
purpose of winding up Petrie's affairs with no objective
to continue or engage in the conduct of a trade or
business.
(b) As Petrie is required to liquidate and
dissolve prior to fully winding up its affairs,
including, but not limited to, its payment of any
unsatisfied debts, claims, liabilities, commitments,
suits and other obligations, whether contingent or fixed
or whether arising under the Acquisition Agreement, the
Seller Indemnification Agreement, dated as of December 9,
1994, among Toys, Petrie, PS Stores Acquisition Corp., a
Delaware corporation ("PS Stores"), and subsidiaries of
PS Stores (the "Seller Indemnification Agreement"), or
otherwise (the "Liabilities"), without any established
procedure to satisfy such Liabilities, Petrie's Board of
Directors and Shareholders each approved the Plan, which
calls for the establishment of the Trust, and sets forth
the manner in which the Trustees are selected, for the
purpose of providing a procedure which will enable Petrie
to dissolve in a timely manner, and wind up its affairs,
by distributing to the Shareholders pro rata all its
assets, other than the Retained Assets, which will be
granted, assigned and conveyed to the Trustees pursuant
to the terms contained herein. The Retained Assets
granted, assigned and conveyed to the Trustees subject to
the terms and provisions of the Escrow Agreements will be
held in the Trust, and the Trustees will: (i) further
liquidate the Trust Assets if necessary to carry out the
purpose of the Trust and facilitate distribution of the
Trust Assets; (ii) allocate, protect, conserve and manage
the Trust Assets in accordance with the terms and
conditions hereof; (iii) complete the winding up of
Petrie's affairs; (iv) act on behalf of the Beneficiaries
and in the capacity of Petrie in connection with the
Acquisition Agreement and (v) distribute the Trust Assets
in accordance with the terms and conditions hereof.
(c) It is intended that the granting,
assignment and conveyance of the Retained Assets by
Petrie to the Trustees pursuant hereto shall be treated
for federal and state income tax purposes as if Petrie
made such distributions directly to the Shareholders. It
is further intended that for federal, state and local
income tax purposes the Trust shall be treated as a
liquidating trust under Treasury Regulation
Section 301.7701-4(d) and any analogous provision of
state or local law, and the Beneficiaries shall be
treated as the owners of their respective share of the
Trust pursuant to Sections 671 through 679 of the Code
and any analogous provision of state or local law and
shall be taxed on their respective share of the Trust's
taxable income (including both ordinary income and
capital gains) pursuant to Section 671 of the Code and
any analogous provision of state or local law. The
Trustees shall file all tax returns required to be filed
with any governmental agency consistent with this
position, including, but not limited to, any returns
required of grantor trusts pursuant to Section 1.671-4(a)
of the Income Tax Regulations.
2.2. Prohibited Activities. The Trust shall
not continue or engage in the conduct of any trade or
business, and the Trustees are expressly prohibited from,
and shall have no power or authority to, continue or
engage in the conduct of any trade or business on behalf
of the Trust or the Beneficiaries, and all of the terms
and conditions hereof shall be construed accordingly.
2.3. No Reversion to Petrie. In no event
shall any part of the Trust Assets revert to or be
distributed to Petrie.
2.4. Instruments of Further Assurance. After
the dissolution of Petrie, such Persons as shall have the
right and power to so act, will, upon reasonable request
of the Trustees, execute, acknowledge, and deliver such
further instruments and do such further acts as may be
necessary or proper to carry out effectively the purposes
of this Agreement, to confirm or effectuate the transfer
to the Trustees of any property intended to be covered
hereby, and to vest in the Trustees, their successors and
assigns, the estate, powers, instruments or funds in
trust hereunder.
2.5. Payment of Liabilities. The Trustees
hereby assume all Liabilities. Should any Liability be
asserted against the Trustees as the transferees of the
Trust Assets or as a result of the assumption made in
this paragraph, the Trustees may use such part of the
Trust Assets as may be necessary in contesting any such
Liability or in payment thereof, but in no event shall
the Trustees, Beneficiaries or employees or agents of the
Trust or Toys or its directors, officers, employees or
agents be personally liable, nor shall resort be had to
the private property of such Persons, in the event the
Trust Assets are not sufficient to satisfy the
Liabilities of the Trust.
2.6. Incidents of Ownership. The Shareholders
shall be the Initial Beneficiaries of the Trust created
by this Agreement and the Trustees shall retain only such
incidents of legal ownership as are necessary to
undertake the actions and transactions authorized herein.
2.7. Notice to Unlocated Shareholders. If the
Trust holds Trust Assets for unlocated Shareholders, due
notice shall be given to such Shareholders in accordance
with local law.
ARTICLE III
BENEFICIARIES
3.1. Beneficial Interests.
(a) The Initial Beneficial Interest of each
former Shareholder as a Beneficiary hereof shall be
determined by the Trustees in accordance with a certified
copy of Petrie's shareholder list as of the Record Date.
Petrie will deliver such a certified copy of its
shareholder list to the Trustees within a reasonable time
after such date. For ease of administration, the
Trustees shall express the Beneficial Interest of each
Beneficiary in terms of units ("Units").
(b) The certificates representing Shares will
be deemed to evidence the number of Units in the Trust
owned by each Beneficiary, provided, however, that upon
exchange or transfer of such certificates, the
certificates shall be marked with an appropriate legend,
or new certificates in a form approved by the Trustees
shall be issued and shall evidence the number of Units
owned.
(c) If any conflicting claims or demands are
made or asserted with respect to the ownership of any
Units, or if there should be any disagreement between the
transferees, assignees, heirs, representatives or
legatees succeeding to all or part of the interest of any
Beneficiary resulting in adverse claims or demands being
made in connection with such Units, then, in any of such
events, the Trustees shall be entitled, at their sole
election, to refuse to comply with any such conflicting
claims or demands. In so refusing, the Trustees may
elect to make no payment or distribution with respect to
such Units, or to make such payment to a court of
competent jurisdiction or an escrow agent, and in so
doing the Trustees shall not be or become liable to any
of such parties for their failure or refusal to comply
with any of such conflicting claims or demands, nor shall
the Trustees be liable for interest on any funds which it
may so withhold. The Trustees shall be entitled to
refrain and refuse to act until either (i) the rights of
the adverse claimants have been adjudicated by a final
judgment of a court of competent jurisdiction, (ii) all
differences have been adjusted by valid written agreement
between all of such parties, and the Trustees shall have
been furnished with an executed counterpart of such
agreement, or (iii) there is furnished to the Trustees a
surety bond or other security satisfactory to the
Trustees, as they shall deem appropriate, to fully
indemnify them as between all conflicting claims or
demands.
3.2. Rights of Beneficiaries. Each
Beneficiary shall be entitled to participate in the
rights and benefits due to a Beneficiary hereunder
according to his Beneficial Interest. Each Beneficiary
shall take and hold the same subject to all the terms and
provisions of this Agreement. The interest of the
Beneficiary hereby is declared and shall be in all
respects personal property and upon the death of an
individual Beneficiary, his Beneficial Interest shall
pass as personal property to his legal representative and
such death shall in no way terminate or affect the
validity of this Agreement. A Beneficiary shall have no
title to, right to, possession of, management of, or
control of, the Trust Assets except as herein expressly
provided. No widower, widow, heir, or devisee of any
person who may be a Beneficiary shall have any right of
dower, homestead, or inheritance, or of partition, or of
any other right, statutory or otherwise, in any property
forming a part of the Trust Assets but the whole title to
all the Trust Assets shall be vested in the Trustees and
the sole interest of the Beneficiaries shall be the
rights and benefits given to such Persons under the
Agreement.
3.3. Transfer of Interests of Beneficiaries.
The Beneficial Interests will be registered with the
Securities and Exchange Commission on Form 8-B. If the
Trust's Registration Statement on Form 8-B has been
declared effective and the Trust has received either a
ruling from the Internal Revenue Service or an opinion
from counsel acceptable to the Trustees to the effect
that transferability by Beneficiaries of their Beneficial
Interests will not adversely affect the Trust's
qualification as a "liquidating trust" for purposes of
the Code and Treasury Regulation Section 301.7701-4(d),
the Beneficial Interest of a Beneficiary may be
transferred, in accordance with applicable securities
laws, either by the Beneficiary in person or by a duly
authorized agent or attorney, or by the properly
appointed legal representatives of the Beneficiary;
provided, however, that if the Trust receives a ruling
from the Internal Revenue Service to the effect that
transferability by Beneficiaries of their Beneficial
Interests will adversely affect the Trust's qualification
as a "liquidating trust" for purposes of the Code and
Treasury Regulation Section 301.7701-4(d), the Beneficial
Interest of a Beneficiary may not be transferred either
by the Beneficiary in person or by a duly authorized
agent or attorney, or by the properly appointed legal
representatives of the Beneficiary, nor may a Beneficiary
have authority or power to sell, assign, transfer,
encumber, or in any other manner dispose of his
Beneficial Interest; provided, however, that the
Beneficial Interest shall be assignable or transferable
by will, intestate succession, or operation of law and,
further provided, that the executor or administrator of
the estate of a Beneficiary may mortgage, pledge, grant a
security interest in, hypothecate or otherwise encumber,
the Beneficial Interest held by the estate of such
Beneficiary if necessary in order to borrow money to pay
estate, succession or inheritance taxes or the expenses
of administering the estate of the Beneficiary, upon
written notice to the Trustees.
The Beneficial Interests of the Beneficiaries
hereunder shall not be subject to attachment, execution,
sequestration or any order of a court, nor shall such
interests be subject to the contracts, debts,
obligations, engagements or liabilities of any
Beneficiary, but the interest of a Beneficiary shall be
paid by the Trustees to the Beneficiary free and clear of
all assignments, attachments, anticipations, levies,
executions, decrees and sequestrations and shall become
the property of the Beneficiary only when actually
received by such Beneficiary.
3.4. Trustees as Beneficiaries. Each Trustee,
either individually or in a representative or fiduciary
capacity may be a Beneficiary to the same extent as if he
were not a Trustee hereunder and have all the rights of a
Beneficiary, including, without limitation, the right to
vote and to receive distributions, to the same extent as
if he were not a Trustee hereunder.
ARTICLE IV
DURATION AND TERMINATION OF TRUST
4.1. Duration. The existence of this Trust
shall terminate upon the earliest of (i) a termination
required by the applicable laws of the State of New York,
(ii) the termination due to the distribution of all the
Trust Assets as provided in Section 5.6, or (iii) the
expiration of a period of five years from the date of the
creation of the Trust; provided, however, the Trustees,
in their discretion, may extend the existence of this
Trust to such later date as they may designate, if they
determine that an extension is reasonably necessary to
pay or make provision for then known liabilities, actual
or contingent, and provided further, however, that the
Trust shall not in any event terminate pursuant to this
clause (iii) prior to (a) the date the Trustees are
permitted to make a final distribution in accordance with
Section 5.6 or (b) the termination of the Escrow
Agreements
4.2. Other Obligations of Trustees upon
Termination. Upon distribution of all the Trust Assets,
the Trustees shall provide for the retention of the
books, records, lists of holders of Units, certificates
for Shares and Units and files which shall have been
delivered to or created by the Trustees. At the
Trustees' discretion, all of such records and documents
may be destroyed at any time after seven years from the
distribution of all the Trust Assets. Except as
otherwise specifically provided herein, upon the
distribution of all the Trust Assets, the Trustees shall
have no further duties or obligations hereunder.
ARTICLE V
ADMINISTRATION OF TRUST ASSETS
5.1. Sale of Trust Assets. The Trustees may,
at such times as they may deem appropriate, transfer,
assign, or otherwise dispose of all or any part of the
Trust Assets as they deem appropriate at public auction
or at private sale for cash, securities or other
property, or upon credit (either secured or unsecured as
the Trustees shall determine).
5.2. Transactions with Related Persons.
Notwithstanding any other provisions of this Agreement,
but only to the extent that such transactions have not
been previously approved by the Shareholders as part of
the Plan of Liquidation and Dissolution, the Trustees
shall not knowingly, directly or indirectly, sell or
otherwise transfer all or any part of the Trust Assets
to, or contract with, (i) any Trustee, employee or agent
(acting in their individual capacities) of this Trust or
(ii) any Person of which any Trustee, employee or agent
of this Trust is an affiliate by reason of being a
trustee, director, officer, partner or direct or indirect
beneficial owner of 5% or more of the outstanding capital
stock, shares or other equity interest of such Persons;
unless, in each such case, after disclosure of such
interest or affiliation, such transaction is approved by
a majority of the Trustees who are not interested in the
transaction and such Trustees determine that such
transaction is on its terms fair and reasonable to the
Trust and is in the best interests of the Beneficiaries,
and in no event less favorable to this Trust than terms
available for a comparable transaction with unrelated
Persons. The Trustees are entitled to rely in good faith
on certificates of the Trustees, employees and agents of
the Trust with respect to their interests in any
transaction.
5.3. Restriction on Trust Assets. Other than
Toys Common Stock, the Trust shall not receive transfers
of any assets prohibited by Revenue Procedure 82-58, as
the same may be amended, supplemented or modified
including, but not limited to, any listed stocks or
securities, any readily-marketable assets, any operating
assets of a going business, any unlisted stock of a
single issuer that represents 80 percent or more of the
stock of such issuer or any general or limited
partnership interests, except any stock or securities
received in a transaction contemplated by Section 6.2(l)
hereof.
5.4. Payment of Claims, Expenses and
Liabilities. The Trustees shall pay from the Trust
Assets all claims, expenses, charges, liabilities, and
obligations of the Trust Assets and all Liabilities and
obligations which the Trustees specifically assume and
agree to pay pursuant to this Agreement and such
transferee liabilities which the Trustees may be
obligated to pay as transferees of the Trust Assets,
including among the foregoing, and without limiting the
generality of the foregoing, interest, penalties, taxes,
assessments, and public charges of every kind and nature
and the costs, charges, and expenses connected with or
growing out of the execution or administration of this
Trust and such other payments and disbursements as are
provided in this Agreement or which may be determined to
be a proper charge against the Trust Assets by the
Trustees.
5.5. Interim Distributions. At such times as
may be determined by them, but at least annually, the
Trustees shall distribute, or cause to be distributed, to
the Beneficiaries, in proportion to the number of Units
held by each Beneficiary, such cash or other property
comprising a portion of the Trust Assets as the Trustees
may in their sole discretion determine may be distributed
without detriment to the conservation and protection of
the Trust Assets; provided, however, that the Trustees
shall not make any distributions to the Beneficiaries
unless (i) they shall have notified Toys of their intent
to make such a distribution and (ii) Toys has failed to
give notice of its objection thereto, pursuant to and
upon the terms set forth in Section 14.4(b), within 20
days of its receipt of the Trustee's notice (or such
shorter period as Toys may agree to).
5.6. Final Distribution. If the Trustees
determine that the Liabilities and all other claims,
expenses, charges, liabilities and obligations of the
Trust have been paid or discharged, or if the existence
of the Trust shall terminate pursuant to Section 4.1, the
Trustees shall, as expeditiously as is consistent with
the conservation and protection of the Trust Assets,
distribute the Trust Assets to the Beneficiaries in
proportion to the number of Units held by each
Beneficiary; provided, however, that the Trustees shall
not make any distributions to the Beneficiaries unless
(i) they shall have notified Toys of their intent to make
such a distribution and (ii) Toys has failed to give
notice of its objection thereto, pursuant to and upon the
terms set forth in Section 14.4(b), within 20 days of its
receipt of the Trustee's notice (or such shorter period
as Toys may agree to). The Trustees shall hold in the
Trust and thereafter make disposition of all liquidating
distributions and other payments due any Beneficiaries
who have not been located, in accordance with New York
State law, subject to applicable state laws regarding
escheat and abandoned property.
5.7. Reports to Beneficiaries and Others. As
soon as practicable after the end of each taxable year of
the Trust and after termination of the Trust, the
Trustees shall submit a written report and account to the
Beneficiaries showing (i) the assets and liabilities of
the Trust at the end of such taxable year or upon
termination and the receipts and disbursements of the
Trustees for such taxable year or period, certified by an
independent certified public accountant, (ii) any changes
in the Trust Assets which they have not previously
reported, and (iii) any action taken by the Trustees in
the performance of their duties under this Agreement
which they have not previously reported and which, in
their opinion, materially affects the Trust Assets. The
Trustees may submit similar reports for such interim
periods during the taxable year as they deem advisable or
as may be required by the Securities and Exchange
Commission. The taxable year of the Trust shall end on
December 31 of each year unless the Trustees deem it
advisable to establish some other date as the date on
which the taxable year of the Trust shall end.
Within 30 days after the end of each calendar
six month period that includes any period prior to the
Termination Date, the Trustees shall deliver to Toys a
written report showing (i) a schedule of the assets held
by the Trust, (ii) disbursements made by the Trust during
such six month period, (iii) claims asserted against the
Trust and expenses incurred by the Trust during such six
moth period and (iv) all pending claims asserted against
the Trust. In addition, Toys shall be furnished,
concurrently with the delivery thereof to any of the
Trustees, with a copy of any written report concerning
the Trust provided to any of the Trustees or to any
Beneficiary. The Trustees shall provide oral updates to
Toys relating to the information set forth in
subparagraphs (i)-(iv) above, upon the reasonable request
of Toys during normal business hours. The obligation of
the Trustees to provide written reports or oral updates
is conditioned upon receiving from Toys a confidentiality
agreement prior to the first such delivery which shall be
substantially in the form of Exhibit A attached hereto.
5.8. Federal Income Tax Information. As soon
as practicable after the close of each taxable year, the
Trustees shall mail to each Person who was a Beneficiary
at the close of the year, a statement showing on a unit
basis the dates and amounts of all distributions made by
the Trustees, the number of shares of Toys Common Stock
disposed of by the Trust, if any, income earned on assets
held by the Trust, if any, and such other information as
is reasonably available to the Trustees which may be
helpful in determining the amount of gross income
attributable to the Trust that such Beneficiary should
include in such Person's Federal income tax return for
the preceding year. In addition, after receipt of a
request in good faith, or in their discretion without
such request or if required by applicable law, the
Trustees shall furnish to any Person who has been a
Beneficiary at any time during the preceding year a
statement containing such further information as is
reasonably available to the Trustees which shall be
helpful in determining the amount of taxable income which
such Person should include in such Person's Federal
income tax return.
5.9. Employment of Manager
(a) The Trustees shall be responsible for the
general policies of the Trust and for the general
supervision of the activities of the Trust conducted by
all agents, employees, advisors or managers of the Trust.
However, the Trustees are not and shall not be required
personally to conduct the activities of the Trust, and
consistent with their ultimate responsibility as stated
above, the Trustees shall have the power to appoint,
employ or contract with any Person or Persons (including
one or more of themselves or any corporation,
partnership, or trust in which one or more of them may be
directors, officers, shareholders, partners or trustees)
as the Trustees may deem necessary or proper for the
transaction of the activities of the Trust. The Trustees
may therefore employ or contract with such Person or
Persons (herein referred to as the "Manager") and may
grant or delegate such authority to the Manager as the
Trustees may in their sole discretion deem necessary or
desirable to carry out the purpose of the Trust without
regard to whether such authority is normally granted or
delegated by trustees.
The Trustees shall have the power to determine
the terms and compensation of the Manager or any other
Person whom they may employ or with whom they may
contract, provided, however, that any determination to
employ or contract with any Trustee or other Person such
that a Trustee or other Person would be an Affiliated
Trustee or an Affiliated Person shall be valid only if
made, approved or ratified after disclosure of such
interests by the affirmative vote or written consent of a
majority of the non-Affiliated Trustees. The Trustees
may exercise broad discretion in allowing the Manager to
administer and regulate the operations of the Trust, to
act as agent for the Trust, to execute documents on
behalf of the Trustees, and to make executive decisions
which conform to general policies and general principles
previously established by the Trustees.
(b) The Manager or other Persons shall not be
required to administer the Trust as its sole and
exclusive function and may have other business interests
and may engage in other activities similar or in addition
to those relating to the Trust, including the rendering
of advice or services of any kind to investors or any
other Persons and the management of other investments.
ARTICLE VI
POWERS OF AND LIMITATIONS ON THE TRUSTEES
6.1. Limitations on Trustees. The Trustees
shall not at any time, on behalf of the Trust or
Beneficiaries, enter into or engage in any trade or
business, and no part of the Trust Assets shall be used
or disposed of by the Trustees in furtherance of any
trade or business. The Trustees shall be restricted to
the holding and collection of the Trust Assets and the
payment and distribution thereof for the purposes set
forth in this Agreement and to the conservation and
protection of the Trust Assets and the administration
thereof in accordance with the provisions of this
Agreement. In no event shall the Trustees receive any
property, make any distribution, satisfy or discharge any
claims, expenses, charges, Liabilities and obligations or
otherwise take any action which is inconsistent with a
complete liquidation of Petrie as that term is used and
interpreted by Sections 368(a)(1)(C) and (a)(2)(G) of the
Code, Treasury Regulations promulgated thereunder, and
rulings, decisions and determinations of the Internal
Revenue Service and courts of competent jurisdiction, or
take any action which would jeopardize the status of the
Trust as a "liquidating trust" for federal income tax
purposes within the meaning of Treasury Regulation
Section 301.7701-4(d). This limitation shall apply
regardless of whether the conduct of any such trade or
business is deemed by the Trustees to be necessary or
proper for the conservation and protection of the Trust
Assets. The Trustees shall not invest any of the funds
held as Trust Assets, except that the Trustees may invest
any portion of the Trust Assets in (i) direct obligations
of the United States of America or obligations of any
agency or instrumentality thereof which mature not later
than one year from the date of acquisition thereof; (ii)
money market deposit accounts, checking accounts, savings
accounts, or certificates of deposit, or other time
deposit accounts which mature not later than one year
from the date of acquisition thereof which are issued by
a commercial bank or savings institution organized under
the laws of the United States of America or any state
thereof; or (iii) any other investments which may be
determined by the Trustees to be permissible under
Revenue Procedure 82-58, as the same may be amended,
supplemented or modified.
6.2. Specific Powers of Trustees. Subject to
the provisions of Section 6.1, the Trustees shall have
the following specific powers in addition to any powers
conferred upon them by any other Section or provision of
this Agreement or any statutory laws of the State of New
York; provided, however, that the enumeration of the
following powers shall not be considered in any way to
limit or control the power of the Trustees to act as
specifically authorized by any other Section or provision
of this Agreement and to act in such a manner as the
Trustees may deem necessary or appropriate to conserve
and protect the Trust Assets or to confer on the
Beneficiaries the benefits intended to be conferred upon
them by this Agreement:
(a) To determine the nature and amount of the
consideration to be received with respect to the sale or
other disposition of, or the grant of interests in, the
Trust Assets.
(b) To collect, liquidate or otherwise convert
into cash, or such other property as they deem
appropriate, all property, assets and rights in the Trust
Assets, and to pay, discharge and satisfy all other
claims, expenses, charges, Liabilities, and obligations
existing with respect to the Trust Assets, the Trust or
the Trustees.
(c) To elect, appoint, engage, retain or
employ any Persons as agents, representatives, employees,
or independent contractors (including without limitation
real estate advisors, investment advisors, accountants,
transfer agents, attorneys-at-law, managers, appraisers,
brokers, or otherwise) in one or more capacities, and to
pay compensation from the Trust Assets for services in as
many capacities as such Person may be so elected,
appointed, engaged, retained or employed, to prescribe
the titles, powers and duties, terms of service and other
terms and conditions of the election, appointment,
engagement, retention or employment of such Persons and,
except as prohibited by law, to delegate any of the
powers and duties of the Trustees to any one or more
Trustees, agents, representatives, employers, independent
contractors or other Persons.
(d) To retain and set aside such funds out of
the Trust Assets as the Trustees shall deem necessary or
expedient to pay, or provide for the payment of (i)
unpaid claims, expenses, charges, Liabilities, and
obligations of the Trust or Petrie, (ii) contingencies,
and (iii) the expenses of administering the Trust Assets.
(e) To do and perform any and all acts
necessary or appropriate for the conservation and
protection of the Trust Assets, including acts or things
necessary or appropriate to maintain assets held by the
Trustees pending sale or other disposition thereof or
distribution thereof to the Beneficiaries.
(f) To hold legal title to property of the
Trust in the name of the Trust, or in the name of one or
more of the Trustees, or of any other Person, without
disclosure of the interest of the Trust therein.
(g) To cause any investments of any part of
the Trust Assets to be registered and held in the name of
any one or more of their names or in the names of a
nominee or nominees without increase or decrease of
liability with respect thereto.
(h) To institute or defend actions or
declaratory judgments or other actions and to take such
other action, in the name of the Trust or Petrie or as
otherwise required, as the Trustees may deem necessary or
desirable to enforce any instruments, contracts,
agreements, causes of action or rights relating to or
forming a part of the Trust Assets.
(i) To determine conclusively from time to
time the value of and to revalue the securities and other
property of the Trust, in accordance with independent
appraisals or other information as they deem
satisfactory.
(j) To cancel, terminate, or amend any
instruments, contracts, agreements, obligations or causes
of action relating to or forming a part of the Trust
Estate, and to execute new instruments, contracts,
agreements, obligations or causes of action
notwithstanding that the terms of any such instruments,
contracts, agreements, obligations or causes of action
may extend beyond the terms of this Trust, provided that
no such new instrument, contract, agreement, obligation
or cause of action shall permit the Trustees to engage in
any activity prohibited by Section 6.1.
(k) To vote by proxy or otherwise on behalf of
the Beneficiaries and with full power of substitution all
shares of stock and all securities held by the Trustees
hereunder and to exercise every power, election,
discretion, option and subscription right and give every
notice, make every demand, and to do every act or thing
in respect to any shares of stock or any securities held
by the Trustees which the Trustees might or could do if
they were the absolute owners thereof.
(l) To undertake or join in any merger, plan
of reorganization, consolidation, liquidation,
dissolution, readjustment or other transaction of any
corporation, any of whose shares of stock or other
securities, obligations, or properties may at any time
constitute a part of the Trust Assets, and to accept the
substituted shares of stock, bonds, securities,
obligations and properties and to hold the same in trust
in accordance with the provisions hereof.
(m) In connection with the sale or other
disposition or distribution of any securities held by the
Trustees, to comply with the applicable Federal and state
securities laws, and to enter into agreements relating to
sale or other disposition or distribution thereof.
(n) To authorize transactions between
corporations or other entities whose securities, or other
interests therein (either in the nature of debt or
equity) are held by the Trustees as part of the Trust
Assets.
(o) To perform any act authorized, permitted,
or required under any instrument, contract, agreement,
right, obligation or cause of action relating to or
forming a part of the Trust Assets whether in the nature
of an approval, consent, demand or notice thereunder or
otherwise, unless such act would require the consent of
the Beneficiaries in accordance with the express
provisions of this Agreement.
ARTICLE VII
CONCERNING THE TRUSTEES,
BENEFICIARIES, EMPLOYEES AND AGENTS
7.1. Generally. The Trustees accept and
undertake to discharge the trust created by this
Agreement, upon the terms and conditions thereof on
behalf of the Beneficiaries. The Trustees shall exercise
such of the rights and powers vested in them by this
Agreement, and use the same degree of care and skill in
their exercise as a prudent man would exercise or use
under the circumstances in the conduct of his own
affairs. No provision of this Agreement shall be
construed to relieve the Trustees from liability for
their own negligent action, their own negligent failure
to act, or their own willful misconduct, except that:
(a) No Trustee shall be responsible for the
acts or omissions of any other Trustee if done or omitted
without his knowledge or consent unless it shall be
proved that such Trustee was negligent in ascertaining
the pertinent facts, and no successor Trustee shall be in
any way responsible for the acts or omissions of any
Trustees in office prior to the date on which he becomes
a Trustee.
(b) No Trustee shall be liable except for the
performance of such duties and obligations as are
specifically set forth in this Agreement, and no implied
covenants or obligations shall be read into this
Agreement against the Trustees.
(c) In the absence of bad faith on the part of
the Trustees, the Trustees may conclusively rely, as to
the truth of the statements and the correctness of the
opinions expressed therein, upon any certificates or
opinions furnished to the Trustees and conforming to the
requirements of this Agreement; but in the case of any
such certificates or opinions which are specifically
required to be furnished to the Trustees by any provision
hereof, the Trustees shall be under a duty to examine the
same to determine whether or not they conform to the
requirements of this Agreement.
(d) No Trustee shall be liable for any error
of judgment made in good faith.
(e) No Trustee shall be liable with respect to
any action taken or omitted to be taken by him in good
faith in accordance with the direction of Beneficiaries
having an aggregate Beneficial Interest of more than 50%
relating to the time, method, and place of conducting any
proceeding for any remedy available to the Trustees, or
exercising any trust or power conferred upon the Trustees
under this Agreement.
7.2. Reliance by Trustees. Except as
otherwise provided in Section 7.1:
(a) The Trustees may rely and shall be
protected in acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request,
consent, order, or other paper or document believed by
them to be genuine and to have been signed or presented
by the proper party or parties.
(b) The Trustees may consult with legal
counsel, auditors or other experts to be selected by
them, including firms of which a Trustee may be a member,
and the advice or opinion of such counsel, auditors or
other experts shall be full and complete personal
protection to all Trustees, employees and agents of the
Trust in respect of any action taken or suffered by them
in good faith and in reliance on, or in accordance with,
such advice or opinion.
(c) Persons dealing with Trustees shall look
only to the Trust Assets to satisfy any liability
incurred by the Trustees to such Person in carrying out
the terms of this Trust, and the Trustees shall have no
personal or individual obligation to satisfy any such
liability.
(d) As far as practicable, the Trustees shall
cause any written instrument creating an obligation of
the Trust to include a reference to this Agreement and to
provide that neither the Beneficiaries, the Trustees nor
their agents shall be liable thereunder and that the
other parties to such instrument shall look solely to the
Trust Assets for the payment of any claim thereunder or
the performance thereof; provided, however, that the
omission of such provision from any such instrument shall
not render the Beneficiaries, Trustees, or their agents
liable nor shall the Trustees be liable to anyone for
such omission.
7.3. Liability to Third Persons. Neither any
Beneficiary nor Toys shall be subject to any personal
liability whatsoever, in tort, contract or otherwise, to
any Person in connection with the Trust Assets or the
affairs of this Trust; and no Trustee, employee or agent
of this Trust shall be subject to any personal liability
whatsoever, in tort, contract or otherwise, to any Person
in connection with the Trust Assets or the affairs of
this Trust, except for his own willful misconduct,
knowingly and intentionally committed in bad faith; and
all such other Persons shall look solely to the Trust
Assets for satisfaction of claims of any nature arising
in connection with the affairs of this Trust. The
Trustees shall, at all times, maintain insurance for the
protection of the Trust Assets, its Beneficiaries,
Trustees, employees and agents in such amount as the
Trustees shall deem adequate to cover all foreseeable
liability to the extent available at reasonable rates.
7.4. Recitals. Any written instrument
creating an obligation of this Trust shall be
conclusively taken to have been executed or done by a
Trustee, employee or agent of this Trust only in his
capacity as Trustee under this Agreement or in his
capacity as employee or agent of the Trust.
7.5. Indemnification. Each Trustee and
employee and agent of the Trust and Toys and its
directors, officers, employees and agents (each an
"Indemnified Person" and collectively, the "Indemnified
Persons") shall be indemnified out of the Trust Assets
against all liabilities and expenses, including amounts
paid in satisfaction of judgments, in compromise or as
fines and penalties, and counsel fees, reasonably
incurred by the Indemnified Persons in connection with
the defense or disposition of any action, suit or other
proceeding by the Trust or any other Person, whether
civil or criminal, in which the Indemnified Person may be
involved or with which the Indemnified Person may be
threatened (i) in the case of any Trustee or any employee
or agent of the Trust, while in office or thereafter, by
reason of his being or having been such a Trustee,
employee or agent, and (ii) in the case of Toys or any
director, officer, employee or agent of Toys, by reason
of Toys or any such director, officer, employee or agent
of Toys exercising or failing to exercise any right
hereunder; provided, however, that the Indemnified Person
shall not be entitled to such indemnification in respect
of any matter as to which the Indemnified Person shall
have been adjudicated to have acted in bad faith or with
willful misfeasance, negligence, or in reckless disregard
of the Indemnified Person's duties, and; provided,
further, however, that, as to any matter disposed of by a
compromise payment by such Indemnified Person pursuant to
a consent decree or otherwise, no indemnification either
for said payment or for any other expenses shall be
provided unless the Trustees shall have received a
written opinion from independent counsel approved by the
Trustees to the effect that if the foregoing matters had
been adjudicated, such Indemnified Person would not have
been found to have acted in bad faith or with willful
misfeasance, negligence, or in reckless disregard of the
Indemnified Person's duties. The rights accruing to any
Indemnified Person under these provisions shall not
exclude any other right to which the Indemnified Person
may be lawfully entitled; provided, however, that no
Indemnified Person may satisfy any right of indemnity or
reimbursement granted herein or to which the Indemnified
Person may be otherwise entitled except out of the Trust
Assets, and no Beneficiary shall be personally liable to
any person with respect to any claim for indemnity or
reimbursement or otherwise. The Trustees may make
advance payments in connection with indemnification under
this Section, provided that the Indemnified Person shall
have given a written undertaking to repay any amount
advanced to the Indemnified Person and to reimburse the
Trust in the event it is subsequently determined that the
Indemnified Person is not entitled to such
indemnification. The Trustees may purchase such
insurance as they feel, in the exercise of their
discretion, adequately insures that each Indemnified
Person shall be indemnified against any such loss,
liability or damage pursuant to this Section. The rights
accruing to any Indemnified Person by reason of the
foregoing shall not be deemed to exclude any other right
to which he may legally be entitled nor shall anything
else contained herein restrict the right of the Trustees
to indemnify or reimburse such Indemnified Person in any
proper case even though not specifically provided for
herein, nor shall anything contained herein restrict the
right of any such Indemnified Person to contribution
under applicable law.
The foregoing shall be in addition to, and
shall not limit or supersede in any way, Toys' rights
under the Seller Indemnification Agreement.
7.6. Rights of Trustees, Employees, Independent
Contractors and Agents To Own Units or Other Property and
To Engage in Other Business. Any Trustee, employee,
independent contractor or agent may acquire, own, hold
and dispose of Units for his individual account, and may
exercise all rights thereof and thereunder to the same
extent and in the same manner as if he were not a
Trustee, employee, independent contractor or agent. Any
Trustee, employee, independent contractor or agent may,
in his personal capacity or in a capacity of trustee,
officer, director, shareholder, partner, member, advisor,
employee of any Person or otherwise, have business
interests and holdings similar to or in addition to those
relating to the Trust. Subject to the provisions of
Article V hereof, any Trustee, employee, independent
contractor or agent of the Trust may be a trustee,
officer, director, shareholder, partner, member, advisor,
employee or independent contractor of, or otherwise have
a direct or indirect interest in, any Person who may be
engaged to render advice or services to the Trust, and
may receive compensation from such Person as well as
compensation as Trustee, employee, independent contractor
or agent or otherwise hereunder. None of these
activities shall be deemed to conflict with his duties as
Trustee, employee, independent contractor or agent.
ARTICLE VIII
PROTECTION OF PERSONS DEALING WITH THE TRUSTEES
8.1. Action by Trustees. All action required
or permitted to be taken by the Trustees, in their
capacity as Trustees, shall be taken (i) at a meeting at
which a quorum is present, having been duly called by one
or more of the Trustees on at least 24 hours prior
written or telephonic notice to all of the Trustees then
serving, or (ii) without a meeting, by a written vote,
resolution, or other writing signed by all the Trustees
then serving. Notice of a meeting may be waived in
writing by any Trustee either before or after such
meeting and the attendance of a Trustee shall constitute
a waiver of notice of such meeting except where a Trustee
attends a meeting for the express purpose of objecting to
the transaction of any business on the ground that the
meeting has not been lawfully called or convened. All or
any one or more Trustees may participate in the meeting
of the Trustees by means of conference telephone or
similar communications equipment by means of which all
persons participating in the meeting can hear each other
and participation in a meeting pursuant to which such
communications are used by a Trustee shall constitute
presence in person at such meeting. Except where this
Agreement otherwise provides, all action taken at such a
meeting shall be by vote or resolution of a majority of
such of the Trustees as are present and shall have the
same force and effect as if taken by all the Trustees. A
majority of the Trustees then serving shall constitute a
quorum. Any action taken by the Trustees pursuant to
this Section 8.1 may be implemented by any one Trustee
unless otherwise specified by the Trustees authorizing or
approving such action. Such implementation may include,
without limitation, the execution and delivery of
documents. Without limiting any of the foregoing of this
Article VIII and subject to the approval of the Trustees
as herein provided, any one Trustee may hold title to, or
an interest in, any and all of the Trust Assets, for and
on behalf of the Trust and the Trustees.
8.2. Delegation. An individual Trustee may,
at any time and from time to time, by an instrument in
writing delegate any or all of his rights, powers,
duties, authority and privileges, whether or not
discretionary, to any other Trustee for such period or
periods of time as may be specified in such written
instrument; provided, however, that any such instrument
shall be revocable at any time and that any Trustee who
is granted any discretionary power hereunder may not
delegate such discretionary power to any Trustee who is
not granted such discretionary power.
8.3. Reliance on Statement by Trustees. Any
Person dealing with the Trustees shall be fully protected
in relying upon the Trustees' certificate signed by any
one or more of the Trustees that they have authority to
take any action under this Trust. Any Person dealing
with the Trustees shall be fully protected in relying
upon the Trustees' certificate setting forth the facts
concerning the calling of any meeting of the Trustees or
the Beneficiaries, the giving of notice thereof, and the
action taken at such meeting, including the aggregate
number of Units held by the Beneficiaries taking such
action.
ARTICLE IX
COMPENSATION OF TRUSTEES
9.1. Amount of Compensation. In lieu of
commissions or other compensation fixed by law for
trustees, each Trustee shall receive as compensation for
services as Trustee hereunder, such compensation as shall
be determined by the Board of Directors of Petrie at
their final meeting, or as may subsequently be approved
by Beneficiaries having an aggregate Beneficial Interest
of more than 50%.
9.2. Dates of Payment. The compensation
payable to each Trustee pursuant to the provisions of
Section 9.1 shall be paid monthly or at such other times
as the Trustees may determine.
9.3. Expenses. Each Trustee shall be
reimbursed from the Trust Assets for all expenses
reasonably incurred by him in the performance of his
duties in accordance with this Agreement.
ARTICLE X
TRUSTEES AND SUCCESSOR TRUSTEES
10.1. Number and Qualification of Trustees.
Subject to the provisions of Section 10.3 relating to the
period pending the appointment of a successor Trustee,
there shall be no fewer than three nor more than nine
Trustees of this Trust, each of whom shall be a citizen
and resident of or a corporation which is incorporated
under the laws of a state of the United States and, if a
corporation, it shall be authorized to act as a corporate
fiduciary under the laws of the State of New York.
Within the limits set forth in this Section 10.1, the
number of Trustees may be increased or decreased from
time to time by the Trustees.
If any corporate Trustee shall ever change its
name, or shall reorganize or reincorporate, or shall
merge with or into or consolidate with any other bank or
trust company, such corporate Trustee shall be deemed to
be a continuing entity and shall continue to act as a
Trustee hereunder with the same liabilities, duties,
powers, titles, discretions and privileges as are herein
specified for a Trustee.
10.2. Resignation and Removal. Any Trustee
may resign and be discharged from the Trust hereby
created by giving written notice thereof to the remaining
Trustee or Trustees and by mailing such notice to the
Beneficiaries at their respective addresses as they
appear in the records of the Trustees. Such resignation
shall become effective on the day specified in such
notice or upon the appointment of such Trustee's
successor and such successor's acceptance of such
appointment, whichever is earlier. Any Trustee may be
removed at any time, with or without cause, by
Beneficiaries having an aggregate Beneficial Interest of
at least a majority of the total Beneficial Interest.
10.3. Appointment of Successor. Should at any
time a Trustee resign or be removed, die, become mentally
incompetent or incapable of action (as determined by a
majority of the remaining Trustees in their sole
discretion), or be adjudged a bankrupt or insolvent,
unless the remaining Trustees shall decrease the number
of Trustees of the Trust pursuant to Section 10.1 hereof,
a vacancy shall be deemed to exist and a successor shall
be appointed by the remaining Trustees. If such a
vacancy is not filled by the remaining Trustees within 30
days, the Beneficiaries may, pursuant to Article XII
hereof, call a meeting to appoint a successor Trustee by
Beneficiaries holding a majority of the Beneficial
Interest represented at the meeting. Pending the
appointment of a successor Trustee, the remaining
Trustees then serving may take any action in the manner
set forth in Section 8.1.
10.4. Acceptance of Appointment by Successor
Trustee. Any successor Trustee appointed hereunder shall
execute an instrument accepting such appointment
hereunder and shall deliver one counterpart thereof to
each of the other Trustees and, in case of a resignation,
to the retiring Trustee. Thereupon such successor
Trustee shall, without any further act, become vested
with all the estates, properties, rights, powers, trusts
and duties of his or its predecessor in the Trust
hereunder with like effect as if originally named
therein; but the retiring Trustee shall nevertheless,
when requested in writing by the successor Trustee or by
the remaining Trustees, execute and deliver an instrument
or instruments conveying and transferring to such
successor Trustee upon the trust herein expressed, all
the estates, properties, rights, powers and trusts of
such retiring Trustee, and shall duly assign, transfer
and deliver to such successor Trustee all property and
money held by him hereunder.
10.5. Bonds. Unless required by the Board of
Directors of Petrie prior to the Record Date, or unless a
bond is required by law, no bond shall be required of any
original Trustee hereunder. Unless required by a
majority vote of the Trustees prior to a successor
Trustee's acceptance of an appointment as such pursuant
to Section 10.4, or unless a bond is required by law and
such requirement cannot be waived by or with approval of
the Beneficiaries, no bond shall be required of any
successor Trustee hereunder. If a bond is required by
law, no surety or security with respect to such bond
shall be required unless required by law and such
requirement cannot be waived by or with approval of the
Beneficiaries or unless required by the Board of
Directors of Petrie. If a bond is required by the Board
of Directors of Petrie or by a majority vote of the
Trustees, the Board of Directors of Petrie or the
Trustees, as the case may be, shall determine whether,
and to what extent, a surety or security with respect to
such bond shall be required.
ARTICLE XI
CONCERNING THE BENEFICIARIES
11.1. Evidence of Action by Beneficiaries.
Whenever in this Agreement it is provided that the
Beneficiaries may take any action (including the making
of any demand or request, the giving of any notice,
consent, or waiver, the removal of a Trustee, the
appointment of a successor Trustee, or the taking of any
other action), the fact that at the time of taking any
such action such Beneficiaries have joined therein may be
evidenced (i) by any instrument or any number of
instruments of similar tenor executed by Beneficiaries in
person or by agent or attorney appointed in writing, or
(ii) by the record of the Beneficiaries voting in favor
thereof at any meeting of Beneficiaries duly called and
held in accordance with the provisions of Article XII.
11.2. Limitation on Suits by Beneficiaries.
No Beneficiary shall have any right by virtue of any
provision of this Agreement to institute any action or
proceeding at law or in equity against any party other
than the Trustees upon or under or with respect to the
Trust Estate or the agreements relating to or forming
part of the Trust Estate, and the Beneficiaries do hereby
waive any such right, unless Beneficiaries having an
aggregate Beneficial Interest of at least 25% shall have
made written request upon the Trustees to institute such
action or proceeding in their own names as Trustees
hereunder and shall have offered to the Trustees
reasonable indemnity against the costs and expenses to be
incurred therein or thereby, and the Trustees for 30 days
after their receipt of such notice, request, and offer of
indemnity shall have failed to institute any such action
or proceeding.
11.3. Requirement of Undertaking. The
Trustees may request any court to require, and any court
may in its discretion require, in any suit for the
enforcement of any right or remedy under this Agreement,
or in any suit against the Trustees for any action taken
or omitted by them as Trustees, the filing by any party
litigant in such suit of an undertaking to pay the costs
of such suit, and such court may in its discretion assess
reasonable costs, including reasonable attorneys' fees,
against any party litigant in such suit, having due
regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, however,
that the provisions of this Section shall not apply to
any suit by the Trustees.
ARTICLE XII
MEETING OF BENEFICIARIES
12.1. Purpose of Meetings. A meeting of the
Beneficiaries may be called at any time and from time to
time pursuant to the provisions of this Article for the
purposes of taking any action which the terms of this
Agreement permit a Beneficiary having a specified
aggregate Beneficial Interest to take either acting alone
or with the Trustees.
12.2. Meeting Called by Trustees. The
Trustees may at any time call a meeting of the
Beneficiaries to be held at such time and at such place
within the State of New York (or elsewhere if so
determined by a majority of the Trustees) as the Trustees
shall determine. Written notice of every meeting of the
Beneficiaries shall be given by the Trustees (except as
provided in Section 12.3), which written notice will set
forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting,
and shall be mailed not more than 60 nor less than 10
days before such meeting is to be held to all of the
Beneficiaries of record not more than 60 days before the
date of such meeting. The notice shall be directed to
the Beneficiaries at their respective addresses as they
appear in the records of the Trust.
12.3. Meeting Called on Request of
Beneficiaries. Within 30 days after written request to
the Trustees by Beneficiaries having an aggregate
Beneficial Interest of at least one-third to call a
meeting of all the Beneficiaries, which written request
shall specify in reasonable detail the action proposed to
be taken, the Trustees shall proceed under the provisions
of Section 12.2 to call a meeting of the Beneficiaries,
and if the Trustees fail to call such meeting within such
30-day period then such meeting may be called by
Beneficiaries having an aggregate Beneficial Interest of
at least one-third or their designated representative.
12.4. Persons Entitled to Vote at Meeting of
Beneficiaries. Each Beneficiary shall be entitled to
vote at a meeting of the Beneficiaries either in person
or by his proxy duly authorized in writing. The vote of
each Beneficiary shall be weighted based on the number of
Units held by each Beneficiary in the Trust Estate. The
signature of the Beneficiary on such written
authorization need not be witnessed or notarized.
12.5. Quorum. At any meeting of
Beneficiaries, the presence of Beneficiaries having an
aggregate Beneficial Interest sufficient to take action
on any matter for the transaction of which such meeting
was called shall be necessary to constitute a quorum; but
if less than a quorum be present, Beneficiaries having an
aggregate Beneficial Interest of more than 50% of the
aggregate Beneficial Interest of all Beneficiaries
represented at the meeting may adjourn such meeting with
the same effect and for all intents and purposes as
though a quorum had been present.
12.6. Adjournment of Meeting. Any meeting of
Beneficiaries may be adjourned from time to time and a
meeting may be held at such adjourned time and place
without further notice.
12.7. Conduct of Meetings. The Trustees shall
appoint the Chairman and the Secretary of the meeting.
The vote upon any resolution submitted to any meeting of
Beneficiaries shall be by written ballot. An Inspector
of Votes, appointed by the Chairman of the meeting, shall
count all votes cast at the meeting for or against any
resolution and shall make and file with the Secretary of
the meeting their verified written report.
12.8. Record of Meeting. A record of the
proceedings of each meeting of Beneficiaries shall be
prepared by the Secretary of the meeting. The record
shall be signed and verified by the Secretary of the
meeting and shall be delivered to the Trustees to be
preserved by them. Any record so signed and verified
shall be conclusive evidence of all the matters therein
stated.
ARTICLE XIII
AMENDMENTS
13.1. Consent of Beneficiaries. At the
direction or with the consent of Beneficiaries having an
aggregate Beneficial Interest of at least a majority, or
such greater percentage as shall be specified in this
Agreement for the taking of an action by the
Beneficiaries under the affected provision of this
Agreement, of the total Beneficial Interest, the Trustees
shall promptly make and execute a declaration amending
this Agreement for the purpose of adding any provisions
to or changing in any manner or eliminating any of the
provisions of this Agreement or amendments thereto;
provided, however, that no such amendment shall (i)
permit the Trustees to engage in any activity prohibited
by Section 6.1 hereof or affect the Beneficiaries' rights
to receive their pro rata shares of the Trust Assets at
the time of distribution or (ii) affect any right or
benefit of Toys hereunder without Toys' consent; provided
further, however, that no consent of the Beneficiaries
shall be required with respect to any amendment made
solely for the purpose of facilitating the
transferability by Beneficiaries of Units so long as such
amendment has been approved by all the Trustees.
13.2. Notice and Effect of Amendment.
Promptly after the execution by the Trustees of any such
declaration of amendment, the Trustees shall give notice
of the substance of such amendment to the Beneficiaries
or, in lieu thereof, the Trustees may send a copy of the
amendment to each Beneficiary. Upon the execution of any
such declaration of amendment by the Trustees, this
Agreement shall be deemed to be modified and amended in
accordance therewith and the respective rights,
limitations of rights, obligations, duties, and
immunities of the Trustees and the Beneficiaries under
this Agreement shall thereafter be determined, exercised
and enforced hereunder subject in all respects to such
modification and amendments, and all the terms and
conditions of any such amendment shall be thereby deemed
to be part of the terms and conditions of this Agreement
for any and all purposes.
ARTICLE XIV
MISCELLANEOUS PROVISIONS
14.1. Filing Documents. This Agreement shall
be filed or recorded in such office or offices as the
Trustees may determine to be necessary or desirable. A
copy of this Agreement and all amendments thereof shall
be maintained in the office of each Trustee and shall be
available at all times during regular business hours for
inspection by any Beneficiary or his duly authorized
representative. The Trustees shall file or record any
amendment of this Agreement in the same places where the
original Agreement is filed or recorded. The Trustees
shall file or record any instrument which relates to any
change in the office of Trustee in the same places where
the original Agreement is filed or recorded.
14.2. Intention of Parties to Establish Trust.
This Agreement is not intended to create and shall not be
interpreted as creating a corporation, association,
partnership, or joint venture of any kind for purposes of
Federal income taxation or for any other purpose.
14.3. Beneficiaries Have No Rights or
Privileges as Shareholders of Petrie. Except as
expressly provided in this Agreement or under applicable
law, the Beneficiaries shall have no rights or privileges
attributable to their former status as Shareholders of
Petrie.
14.4. Third Party Beneficiary.
(a) Petrie and the Trustees each acknowledge
that each of Toys and PS Stores is a third party
beneficiary of this Agreement.
(b) Toys' objection to any disbursement or
distribution hereunder must state, in effect, that it
reasonably believes that the contemplated disbursement or
distribution could result in the remaining Trust Assets
being insufficient to pay for any of Petrie's obligations
under the Seller Indemnification Agreement.
(c) If the Trustees intend to make a
distribution notwithstanding Toys' objection thereto,
they will give Toys at least 20 days prior written notice
of their belief that the Toys notice fails to meet the
standard set forth in Section 14.4(b) and of their
intention to proceed with the distribution.
14.5. Certain Claims. Petrie agrees that
claims, if any, of (i) PS Stores, pursuant to the Stock
Purchase Agreement, dated as of August 23, 1994, as
amended, by and between Petrie and PS Stores and (ii)
Toys, pursuant to the Acquisition Agreement or the Seller
Indemnification Agreement, shall not be barred by Section
1007(b) of the New York Business Corporation Law for any
failure to notify the Trustees of such claims.
14.6. Laws as to Construction. This Agreement
shall be governed by and construed in accordance with the
laws of the State of New York. The Trustees, and the
Beneficiaries (by their vote with respect to the
Liquidation Plan and/or their acceptance of any
distributions made to them pursuant to this Agreement),
consent and agree that this Agreement shall be governed
by and construed in accordance with such laws.
14.7. Severability. In the event any
provision of this Agreement or the application thereof to
any Person or circumstances shall be finally determined
by a court of proper jurisdiction to be invalid or
unenforceable to any extent, the remainder of this
Agreement, or the application of such provision to
persons or circumstances other than those as to which it
is held invalid or unenforceable, shall not be affected
thereby, and each provision of this Agreement shall be
valid and enforced to the fullest extent permitted by
law.
14.8. Notices. A copy of all notices and
communications delivered by the Trustees to the
Beneficiaries pursuant to this Agreement, other than the
information provided to Toys pursuant to the second and
third sentences of the second paragraph of Section 5.7
hereof shall also be sent to PS Stores. Any notice or
other communication by the Trustees to any Beneficiary
shall be deemed to have been sufficiently given, for all
purposes, if deposited, postage prepaid, in a post office
or letter box addressed to such Person at his address as
shown in the records of the Trust.
All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly
given if delivered personally or sent by cable, telegram,
telecopier or telex to the parties and to Toys at the
following addresses or at such other addresses as shall
be specified by the parties or by Toys by like notice:
(a) If to the Trustees:
Stephanie R. Joseph, Esq.
c/o The Directors' Network
685 Fifth Avenue, Suite 601
New York, NY 10022
Facsimile: (212) 754-3087
with a copy to:
Skadden, Arps, Slate, Meagher & Flom
919 Third Avenue
New York, New York 10022
Attention: Alan C. Myers, Esq.
Facsimile: (212) 735-2000
(b) if to Toys:
Toys "R" Us, Inc.
395 W. Passaic Street
Rochelle Park, New Jersey 07662
Attention: Louis Lipschitz
Chief Financial Officer
Facsimile: (201) 845-0973
with a copy to:
Schulte Roth & Zabel
900 Third Avenue
New York, New York 10022
Attention: Andre Weiss, Esq.
Facsimile: (212) 593-5955
(c) If to Escrow Agents:
Custodial Trust Company
10 Carnegie Center
Princeton, New Jersey 08540-6231
Attn: Kevin Darmody
Fax: (609) 951-2320
(d) If to PS Stores:
PS Stores Acquisition Corp.
c/o E.M. Warburg, Pincus & Co.
466 Lexington Avenue
New York, New York 10017
Attention: Errol M. Cook
Facsimile: (212) 878-9351
with a copy to:
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Jane Lee Vris
Facsimile: (212) 403-2000
14.9. Specific Performance. The Trustees
acknowledge that failure on their part to comply with the
terms of Sections 5.5 and 5.6 hereof shall cause Toys
immediate and irreparable harm that cannot be adequately
compensated by the remedies at law, and that in the event
of such breach or violation, or threatened breach or
violation, Toys may have such sections of this Agreement
specifically enforced by preliminary and permanent
injunctive relief without having to prove the inadequacy
of the available remedies at law or any actual damages.
Any remedy sought or obtained by Toys shall not be
considered either exclusive or a waiver of the rights of
Toys or any other person to assert any other remedies it
has in law or equity. In any proceeding upon a motion
for any such injunctive relief, the Trustees' ability to
answer in damages shall not be a bar, or be interposed as
a defense, to the granting of such injunctive relief
against the Trustees. Any rights under this Section may
be enforced in any appropriate court in the State of New
York.
14.10. Counterparts. This Agreement may be
executed in any number of counterparts, each of which
shall be an original, but such counterparts shall
together constitute but one and the same instrument.
14.11. Binding.
(a) The name Petrie Stores Corporation is the
designation created by Articles of Incorporation dated
April 25, 1929, as amended, to which reference is hereby
made. The obligations of Petrie are not personally
binding upon, nor shall resort be had to the private
property of, any of the directors, shareholders,
officers, employees or agents of Petrie, but only the
property of Petrie shall be bound.
(b) The obligations of the Trust are not
personally binding upon, nor shall resort be had to the
private property of, any of the Trustees, Beneficiaries,
employees or agents of the Trust, but only the Trust
Estate shall be bound.
IN WITNESS WHEREOF, Petrie Stores Corporation
has caused this Agreement to be executed by its President
and Chief Executive Officer, and the Trustees herein have
executed this Agreement, as Trustees and not as
individuals, this 6th day of December 1995.
PETRIE STORES CORPORATION
By:/s/ HILDA KIRSCHBAUM GERSTEIN
Hilda Kirschbaum Gerstein
President and Chief Executive Officer
/s/ JOSEPH H. FLOM
Joseph H. Flom, Trustee
/s/ STEPHANIE R. JOSEPH
Stephanie R. Joseph, Trustee
/s/ BERNARD PETRIE
Bernard Petrie, Trustee
/s/ LAURENCE A. TISCH
Laurence A. Tisch, Trustee
/s/ RAYMOND S. TROUBH
Raymond S. Troubh, Trustee
EXHIBIT A
TOYS "R" US, INC.
461 FROM ROAD
PARAMUS, NEW JERSEY 07652
[DATE]
Joseph H. Flom, as Trustee
Stephanie R. Joseph, as Trustee
Bernard Petrie, as Trustee
Laurence A. Tisch, as Trustee
Raymond S. Troubh, as Trustee
c/o Petrie Stores Liquidating Trust
70 Enterprise Avenue
Secaucus, New Jersey 07094
Gentlemen:
Pursuant to Section 5.7 of the Petrie Stores
Liquidating Trust Agreement (the "Trust Agreement"), the
above individuals, acting as trustees (the "Trustees"),
have agreed to provide Toys "R" Us, Inc. ("Toys") with
certain written reports and oral updates relating to the
Trust (as defined in the Trust Agreement) and its assets
and liabilities (the "Confidential Information"), as more
fully described in such Section 5.7.
In consideration for the furnishing the
Confidential Information to us, Toys agrees that such
information will be kept confidential and will not be
disclosed by us or our directors, officers, employees and
agents (the persons to whom such disclosure is
permissible being collectively referred to as the
"Representatives") in whole or in part, and will not be
used by Toys or the Representatives directly or
indirectly for any purpose other than evaluating (the
"Evaluation") whether the Trust Assets (as defined in the
Trust Agreement) are sufficient to pay all of Petrie
Stores Corporation's obligations under the Seller
Indemnification Agreement (as defined in the Trust
Agreement). Toys further agrees to reveal the
Confidential Information only to those Representatives
who have a need to know the Confidential Information for
the purpose of the Evaluation, who are informed by Toys
of the confidential nature of the Confidential
Information and who agree to be bound by the terms and
conditions of this Agreement.
This Agreement shall not apply to such portions of
the Confidential Information which (i) are or become
generally available to the public other than through a
breach of this Agreement by Toys or the Representatives,
(ii) become available to Toys on a non-confidential basis
from a source other than the Trustees, provided that such
source is not bound by a confidentiality agreement with
the Trustees, or (iii) have been independently acquired
or developed by Toys without violating any of its
obligations under this Agreement and without the use of
the Confidential Information.
In the event that Toys or one of the
Representatives becomes legally compelled to disclose any
of the Confidential Information, Toys will provide the
Trustees with prompt written notice so that the Trustees
may seek a protective order or other appropriate remedy
and/or waive compliance with the provisions of this
Agreement. In the event that such protective order or
other remedy is not obtained, or if the Trustees waive
compliance with the terms of this Agreement, Toys will
furnish only that portion of the Confidential Information
which it is advised by legal counsel, is legally required
to be disclosed, and Toys will exercise its best efforts
to obtain reliable assurances that confidential treatment
will be accorded the Confidential Information. Toys also
agrees to promptly inform the Trustees of the particular
Confidential Information which is so disclosed.
Very truly yours,
TOYS "R" US, INC.
By: __________________
Name:
Title:
