Success Fee Agreement (17K)
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SUCCESS FEE AGREEMENT
Agreement dated as of ___________, 200_, by and between [XYZ, LLC] (the
"Service Provider") and the Liquidating Trust for Highlands Insurance Group,
Inc. and certain of its subsidiary companies (collectively, "Highlands"),
established pursuant to that certain Liquidating Trust Agreement between
Highlands and Stephen L. Kibblehouse as Liquidating Trustee, dated ____________,
2002 (the "Liquidating Trust Agreement").
BACKGROUND. On ____________, the United States Bankruptcy Court for the
District of Delaware entered an order which, inter alia, confirmed the Joint
Plan of Reorganization of Highlands under Chapter 11 of the United States
Bankruptcy Code (the "Plan"), and approved the Liquidating Trust Agreement.
Section 5.11 of the Plan and section 7.3 of the Liquidating Trust Agreement each
provide that, on or after the Effective Date of the Plan, the Liquidating Trust
and the Service Provider will enter into a Success Fee Agreement. This Agreement
is the agreement referred to in those sections.
NOW, THEREFORE, in consideration of the promises and covenants set forth
herein, and intending to be legally bound hereby, the parties to this Agreement
hereby agree as follows:
1. Definitions.
(a) Except with respect to terms defined herein, capitalized terms
contained herein shall have the meanings ascribed to them in the Plan.
(b) "Agreement" means this Success Fee Agreement.
(c) "Milestone One" means distributions by the Liquidating Trust to
holders of Class A Trust Units totaling in the aggregate an amount equal to
fifty percent (50%) of the face amount of such Class A Trust Units outstanding
on the Effective Date.
(d) "Milestone Two" means distributions by the Liquidating Trust to
holders of Class A Trust Units totaling in the aggregate an amount equal to
seventy-five percent (75%) of the face amount of such Class A Trust Units
outstanding on the Effective Date.
(e) "Milestone Three" means distributions by the Liquidating Trust
to the holders of Class A Trust Units totaling in the aggregate an amount equal
to one hundred percent (100%) of the face amount of such Class A Trust Units
outstanding on the date of the last such distribution.
(f) "Milestone Four" means any distribution by the Liquidating Trust
to the holders of Class B Trust Units.
(g) "Milestone Five" means distributions by the Liquidating Trust to
the holders of Class A and B Trust Units totaling in the aggregate an amount
equal to one hundred percent (100%) of the face amount of such Class A and B
Trust Units outstanding on the date of the last such distribution.
2. Service Provider. The Service Provider shall, during the term of this
Agreement, provide management services to the Liquidating Trust with respect to
the liquidation of the Trust
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