EXHIBIT 2
TRUST AGREEMENTS
XXXXXXX X. XXXXXXXXX IRREVOCABLE TRUST
F/B/O XXXXXXX XXXXXXXXX
made as of June 9, 1992
by
XXXXXXX X. XXXXXXXXX
Grantor
and
XXXX X. XXXXXXXX
and
XXXX XXXXXX
Trustees
TABLE OF CONTENTS
Article Title
FIRST Beneficiaries Of Trust
SECOND Use Of Principal
THIRD Minors Or Incompetents
FOURTH Life Insurance/Death Benefits
FIFTH Irrevocability
SIXTH Special Power Of Appointment
SEVENTH Powers Of Trustees
EIGHTH Third Parties Not Responsible
NINTH Appointment of Trustees
TENTH Trustees Decisions Conclusive
ELEVENTH Simultaneous Death
TWELFTH Rights Not Assignable
THIRTEENTH Construction
FOURTEENTH Binding Effect
DECLARATION OF TRUST
DECLARATION OF TRUST, made as of June 9, 1992, among XXXXXXX
X. XXXXXXXXX, having an address at 00 Xxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
as grantor (hereinafter referred to as the "Grantor"), and XXXX X. XXXXXXXX,
having an address at 000 Xxxxxxx Xxxxxx, Xxxx Xxx, Xxx Xxxxxx 00000, and XXXX
XXXXXX, having an address at 000-00 Xxxxx Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx
00000, as trustees (collectively hereinafter referred to as the "Trustees").
W I T N E S S E T H:
WHEREAS, the Grantor's wife is XXXX XXXXXXXXX, and the Grantor
has two children, XXXXXXX XXXXXXXXX and XXXXXXX XXXXXXXXX; and
WHEREAS, the Grantor desires to create an irrevocable trust of
the property described in Exhibit A hereto, together with such monies,
securities and other assets as the Trustees hereafter may hold or acquire
hereunder (said property, monies, securities and other assets, together with any
additions thereto received pursuant to the Grantor's last will and testament or
as the proceeds of insurance on the Grantor's life, or as death benefits or
otherwise, being hereinafter referred to as the "trust estate"), for the
purposes and upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants herein
contained and other valuable consideration, the receipt and suffi-
1
ciency of which hereby is acknowledged, the Grantor hereby irrevocably
transfers, conveys, assigns and delivers to the Trustees as and for the trust
estate the property more particularly described in Exhibit A hereto, to hold the
same, and any other property which the Trustees hereafter may acquire, IN TRUST,
for the purposes and upon the terms and conditions hereinafter set forth:
ARTICLE FIRST
Beneficiaries 0f Trust
The Trustees shall pay the entire net income of this Trust, in
such periodic installments as the Trustees shall find convenient, but at least
as often as quarter-annually, to Grantor's son, XXXXXXX XXXXXXXXX. In addition,
the Trustees may pay to or for the benefit of said child, for his health,
education, maintenance or support, any part or all of the principal of this
trust, in such amounts and proportions as the Trustees may determine in their
absolute discretion.
If Grantor's son, XXXXXXX XXXXXXXXX, shall die before the
entire principal of the trust held for his benefit has been distributed, the
then principal of such trust shall be distributed to, or held in trust for the
benefit of, such person or persons among such son's issue and upon such estates
or conditions, as Grantor's said son shall appoint by Will, making specific
reference to this power. Any unappointed property shall be distributed to the
then living issue of such son, per stirpes. If there be no such issue,
distribution shall be to Grantor's then living issue,
2
per stirpes; provided, however, that any amount distributable to Grantor's
daughter, XXXXXXX XXXXXXXXX, for whom at such time Trustees hold a separate
trust executed this date shall be added to such trust for administrative and
distribution as a part thereof. if there be no such issue of Grantor then
living, distribution shall be to the persons who would be entitled to inherit
the same from Grantor in accordance with the laws of the State of New Jersey
then in force, as if Grantor had died immediately after the death of such son,
intestate, owning said property and domiciled in such State.
Notwithstanding anything to the contrary contained herein,
each time that an addition of property is made to the trust by the Grantor
during the life of the Grantor (other than the initial contribution by the
Grantor set forth in Exhibit A hereto), each beneficiary hereof, child of the
Grantor, if living at the time of the addition and if the beneficiary has not
reached the annual limit on withdrawal rights set forth below prior to such
addition, shall have the right to withdraw property then belonging to the trust
estate (including property constituting such addition) having a value at the
time of the withdrawal equal to the value of the addition at the time of the
addition divided by the number of beneficiaries. In calculating the withdrawal
right of each beneficiary resulting from an addition, any addition that would
cause some but not all of such beneficiaries reach such annual limit shall be
treated as if it had consisted of consecutive
3
additions such that the total of the resulting withdrawal rights of each
beneficiary as large as possible hereunder.
The right of withdrawal of each beneficiary pursuant to this
Article shall be subject to the limitation that the total amount which each
beneficiary may withdraw by reason of additions in any one calendar year shall
not exceed the "annual exclusion amount". The "annual exclusion amount" shall
mean the amount excludible from gifts for gift tax purposes by virtue of Section
2503(b) of the Internal Revenue Code, or any successor thereto, in effect in the
year in question (currently $ 10,000); provided that during any time that the
Grantor is married the "annual exclusion amount" shall mean twice the amount so
excludible (currently $20,000).
The Trustees, promptly after any addition of property is made
to the trust during the life of the Grantor, shall give written notice to each
beneficiary acquiring a withdrawal right by reason of such addition, setting
forth a description of the added property, the right of withdrawal resulting
from such addition, and the time limit to exercise such right. If such
beneficiary is under a legal disability, notice shall be given to the legal
guardian of or committee for the beneficiary or, if none, to a person in a
position to act on behalf of such beneficiary as the Trustees shall deem
appropriate. The withdrawal power may be exercised by written notice delivered
to the Trustees by the beneficiary or, if the beneficiary is under a legal
disability, by the legal guardian, committee or person designated by the
Trustees
4
as aforesaid. Any commission payable with respect to principal so withdrawn
shall be charged against such principal.
The withdrawal rights of each beneficiary by reason of
successive additions shall be cumulative, but the cumulative withdrawal rights
of each beneficiary, to the extent not exercised, shall be decreased an December
31st of each year (but not below zero) by the greater of $5,000 or 5% of the
value of the principal of the trust on December 31st, provided that any
withdrawal right resulting from an addition in November or December shall not be
subject to any decrease under this provision until December 31st of the
following year. If the beneficiary files for bankruptcy, the aforesaid
withdrawal right shall be forfeited.
ARTICLE SECOND
Use of Principal
The Trustees are authorized, at any time and from time to
time, to pay to, or apply to the use of, the beneficiary of any trust held
hereunder, for such beneficiary's health, education, maintenance or support, any
part or all of principal of such trust as the Trustees may determine in their
absolute discretion, without necessarily taking into account other resources
available to such beneficiary. No such payment shall be charged upon a
subsequent division of the trust estate against the principal of any share which
may be set apart for a beneficiary.
ARTICLE THIRD
5
Distributions To Minors Or Incompetents
In any case in which the Trustees are authorized or directed
by any provision of this Agreement to pay or distribute income or principal to
any person who shall be a minor or incompetent, the Trustees, in their absolute
discretion and without authorization of any court, may pay or distribute the
whole or any part of such income or principal to such minor or incompetent
personally, or may apply the whole or any part thereof directly to the health,
education, maintenance or support of such minor or incompetent, or may pay or
distribute the whole or any part thereof to the guardian, committee, conservator
or other legal representative, wherever appointed, of such minor or incompetent
or to the person with whom such minor or incompetent may from time to time
reside, or in the case of a minor, may pay or distribute the whole or any part
thereof to a custodian for such minor under any gifts to minors or transfers to
minors act. The receipt of the person to whom any such payment or distribution
is so made shall be a sufficient discharge therefor, even though the Trustees
may be such person.
The Trustees, in their absolute discretion, may defer payment
or distribution of any or all income or principal to which a minor may be
entitled until such minor shall attain the age of twenty-one (21) years, or to
make such payment or distribution at any time and from time to time, during the
minority of such minor, holding the whole or the undistributed portion thereof
as a separate fund vested in such minor but subject to the power in
6
trust hereby given to the Trustees to administer and invest such fund and to use
the income or principal thereof for the benefit of such minor as if such fund
were held in trust hereunder. No bond or other security and no periodic accounts
shall be required with respect to such fund, and the same shall be subject to
commission as if it were a separate trust fund. The Trustees shall pay and
distribute any balance of such fund to such minor when such minor shall attain
the age of twenty-one (21) years. Except as is hereinabove provided, if such
minor shall die before attaining the age of twenty-one (21) years, the Trustees
shall pay and distribute such balance to the executors, administrators or legal
representatives of the estate of such minor, or if there shall be no such legal
representative, to such persons as would have inherited the same and in the same
proportions as they would have taken if such minor had died intestate,
unmarried, the absolute owner thereof and a resident of the State in which such
minor shall die domiciled.
The word "minor", wherever used in this Article THIRD, shall
mean any person who has not attained the age of twenty-one (21) years.
ARTICLE FOURTH
Life Insurance and Death Benefits
With respect to any insurance policies or employee death
benefits payable to the Trustees, the Trustees, upon being advised that any sum
is so payable by reason of the death of the Grantor, shall endeavor to collect
the same, and may bring a suit or action
7
therefor, or may compromise, adjust, settle or submit to arbitration any claims
therefor. The Trustees shall be entitled to reimbursement from the trust estate
for expenses incurred by the Trustees in collecting or attempting to collect any
such sum by suit, action or otherwise. The Trustees, however, shall be under no
duty to bring a suit or action unless the expenses of the Trustees, including
attorneys' fees, shall have been advanced or guaranteed to the satisfaction of
the Trustees. The Trustees may repay, out of the trust estate, any advances made
by the Trustees or reimburse the Trustees for expenses incurred in collecting or
attempting to collect any sum as aforesaid.
The Trustees in no case shall be under any duty or obligation
to make any claim against the Grantor's estate, or take any action against the
executors, administrators or legal representatives of the Grantor's estate, for
reimbursement for any reduction of the sums payable upon the death of the
Grantor by reason of unpaid premiums or for any other cause, including any loans
and interest thereto secured by any insurance policies.
During the life of the Grantor, the Trustees may, in their
discretion, apply the net income or principal of the trust estate to the payment
of premiums on any life insurance policy of which the Trustees or any trust
hereunder is beneficiary. If the net income and principal is insufficient to pay
such premiums, the Trustees may notify the Grantor and the beneficiaries of the
trust of such insufficiency and give them the opportunity to furnish the
necessary funds. If neither the Grantor nor any of the beneficiar-
8
ies furnishes the funds necessary to pay the premiums, the Trustees may, but
shall not be obligated to, obtain the funds required to pay such premiums by
selling a portion of the principal of the trust estate, by borrowing on the
security of such principal, by borrowing against the cash surrender value of the
policy or by surrendering some policies and using the proceeds to pay the
premiums on other policies. The Trustees also is authorized to convert such
policies to paid-up or extended term insurance if the trust estate does not have
the necessary funds to pay the premiums. If no funds are available for the
payment of the premiums of any insurance policy, the Trustees may assign
ownership of such policy to the then living issue of the Grantor.
ARTICLE FIFTH
Irrevocability
This Agreement and the trusts created hereunder are
irrevocable. The Grantor shall execute such further instruments as shall be
necessary to vest the Trustees with full title to the property which is the
subject of this Agreement.
ARTICLE SIXTH
Powers Of Trustees
In the administration of any property, real or personal, at
any time forming a part of the trust estate, including accumulated income, and
in the administration of any trust created hereunder, the Trustees, in addition
to and without limitation of the
9
powers provided by law, shall have the following powers to be exercised in the
absolute discretion of the Trustees, except as otherwise expressly provided in
this Agreement:
(a) To retain such property for any period, whether or not the same is of
the character permissible for investments by fiduciaries under any
applicable law, and without regard to the effect any such retention
may have upon the diversity of investments.
(b) To sell, transfer, exchange, convert or otherwise dispose of, or grant
options with respect to, such property, at public, or private sale,
with or without security, in such manner, at such times, for such
prices, and upon such terms and conditions as the Trustees may deem
advisable.
(c) To invest and reinvest in common or preferred stocks, securities,
investment trusts, bonds and other property, real or personal, foreign
or domestic, including any undivided interest in any one or more
common trust funds, whether or not such investments be of the
character permissible for investments by fiduciaries under any
applicable law, and without regard to the effect any such investment
may have upon the diversity of investments.
(d) To render liquid the trust estate or any trust created hereunder in
whole or in part, at any time and from time to time, and to hold
unproductive property, cash or readily marketable securities of little
or no yield for such period as the Trustees may deem advisable.
10
(e) To lease any such property beyond the period fixed by statute for
leases made by fiduciaries and beyond the duration of any trust
created hereunder.
(f) To join or become a party to, or to oppose, any reorganization,
readjustment, recapitalization, foreclosure, merger, voting trust,
dissolution, consolidation or exchange, and to deposit any securities
with any committee, depository or trustee, and to pay any fees,
expenses and assessments incurred in connection therewith, and to
charge the same to principal, and to exercise conversion, subscription
or other rights, and to make any necessary payments in connection
therewith, or to sell any such privileges.
(g) To vote in person at meetings of stock or security holders and
adjournments thereof, and to vote by general or limited proxy with
respect to any stock or securities.
(h) To hold stock and securities in the name of a nominee without
indicating the trust character of such holding, or unregistered or in
such form as will pass by delivery, or to use a central depository and
to permit registration in the name of a nominee.
(i) To initiate or defend, at the expense of the trust estate, any
litigation relating to this Agreement or any property of the trust
estate which the Trustees consider advisable, and to pay, compromise,
compound, adjust, submit to arbitration, sell or release any claims or
11
demands of the trust estate or any trust created hereunder against others or of
others against the same as the Trustees may deem advisable, including the
acceptance of deeds of real property in satisfaction of notes, bonds and
mortgages, and to make any payments in connection therewith which the Trustees
may deem advisable.
(j)
(j) To borrow money for any purpose from any source, including any trustee
at any time acting hereunder, and to secure the repayment of any and
all amounts so borrowed by mortgage or pledge of any property.
(k) To possess, manage, develop, subdivide, control, partition, mortgage,
lease or otherwise deal with any and all real property; to satisfy and
discharge or extend the term of any mortgage thereof; to execute the
necessary instruments and covenants to effectuate the foregoing
powers, including the giving or granting of options in connection
therewith; to make repairs, replacements and improvements, structural
or otherwise, or abandon the same if deemed to be worthless or not of
sufficient value to warrant keeping or protecting; to abstain from the
payment of real estate taxes, assessments, water charges and sewer
rents, repairs, maintenance and upkeep of the same, to permit to be
lost by tax sale or other proceeding or to convey the same for a
nominal consideration or without consideration; to set up appropriate
reserves out of income for repairs, modernization and upkeep of
12
buildings, including reserves for depreciation and obsolescence, and
to add such reserves to principal and, if the income from the property
itself should not suffice for such purposes, to advance out of other
income, any sums needed therefor, and advance any income of the trust
for the amortization of any mortgage on property held in the trust.
(1) To carry insurance of the kinds and in the amounts which the Trustees
consider advisable, at the expense of the trust estate, to protect the
trust estate and the Trustees personally against any hazard.
(m) To make distribution of the trust estate or of the principal of any
trust created hereunder in kind, and to cause any distribution to be
composed of cash, property or undivided fractional shares in property
different in kind from any other distribution, without regard to the
income tax basis of the property distributed to any beneficiary of any
trust.
(n) To allocate receipts and disbursements of the trust estate between
income and principal as the Trustees in their discretion may
determine.
(o) To execute and deliver any and all instruments or writings which it
may deem advisable to carry out any of the foregoing powers. No party
to any such instruments or writings shall be obligated to inquire into
its validity.
13
(p) To exercise all such rights and powers and to do all such acts and
enter into all such agreements as persons owning similar property in
their own right might lawfully exercise, do or enter into.
(q) It is Grantor's intention that with respect to stock of a corporation
which desires to elect or has elected qualification pursuant to
Subchapter "'S' Corporation"), which is or becomes an asset of any
trust created hereunder and Trustees determine that such election is
in the beat interest of the trust and the beneficiary thereof and
Trustees determine to consent to or continue such election, such stock
shall be held in separate trusts, one for each individual income
beneficiary, and such stock shall be allocated among such separate
trusts, and the provisions of each such trust shall have such terms as
shall meet the requirements of a "qualified Subchapter "'S' trust" as
defined in Section 1361(d) (3) of the Internal Revenue Code of 1986,
or any successor provision thereto, which present requirements are as
set forth in ARTICLE SIXTH (c) (i) hereof. To the extent that a
provision of any trust does not meet the requirements of said Internal
Revenue Code Section, the provision shall be given no force or effect
and such trust shall be administered with regard to such provision.
(i) At present, the Internal Revenue Code provides that a "qualified
Subchapter 'S' trust" means a trust, (a) all
14
the income of which is distributed currently to one individual (hereinafter
"the current income beneficiary") who is a citizen or a resident of the
United States; and (B) the terms of which require that: (I) during the life
of the current income beneficiary, there shall be only one income
beneficiary of the trust; (II) any principal distributed during the life of
the current income beneficiary shall be distributed only to such
beneficiary; (III) the income interest of the current income beneficiary in
the trust shall terminate on the earlier of such beneficiary's death or the
termination of the trust; and (IV) upon the termination of the trust during
the life of the current income beneficiary, the trust shall distribute all
of its assets to such beneficiary.
(ii) Grantor appoints Trustees of a trust created under this Trust
Agreement which holds stock in a corporation which desires to elect or has
elected qualification pursuant to Subchapter 'S' of the Internal Revenue
Service Code of 1986, as amended, if the beneficiary of such trust has not
attained the age of Twenty-One (21) years or is determined to be
incapacitated pursuant to ARTICLE THIRD of this Trust Agreement, as the
legal representative of such beneficiary, to have the sole power to make an
election on behalf of such beneficiary to have such trust qualify under
Internal Revenue Code
15
Section 1361(d), or any successor provision thereto, as a qualified
Subchapter 'S' trust and/or to consent to the corporation's Subchapter 'S'
election pursuant to Internal Revenue Section 1362, or any successor
provision thereto,
(iii) A trust created under this Trust Agreement holding stock of a
corporation which has elected qualification pursuant to Subchapter 'S' of
the Internal Revenue Code of 1986, as amended, may only be merged with a
trust for the benefit of the same beneficiary which qualifies as a
Subchapter 'S' trust pursuant to Section 1361(d) (3) of the Internal
Revenue Code of 1086, as amended, or any successor provision thereto.
(iv) Anything herein to the contrary notwithstanding, with regard to a
qualified Subchapter 'S' trust as defined in Section 1361(d) (3) of the
Internal Revenue Code of 1986, or any successor provision thereto, all
income distributed at a beneficiary's death shall be payable to the estate
of such beneficiary.
No person who deals with any Trustee hereunder shall be bound to see to
the application of any asset delivered to such Trustee or to inquire into the
authority for, or propriety of, any action taken or not taken by such Trustee.
This Agreement, however, shall not be construed to permit any person to deal
with the trust estate for less than adequate consideration, to borrow without
adequate interest or adequate security, to exercise any power of
16
administration in a nonfiduciary capacity, or otherwise to act in such manner as
to cause the Grantor to be treated as the owner of the trust estate or any part
thereof.
No Trustee shall be liable for acts or omissions in administering the trust
estate or any trust created by this Agreement, except for that Trustee's own
actual fraud, gross negligence or willful misconduct. If any Trustee becomes
liable as Trustee to any other person who is not a beneficiary in connection
with any matter not within the Trustee's control and not due to the Trustee's
actual fraud, gross negligence or willful misconduct, such Trustee shall be
fully indemnified and held harmless by the trust estate and any trust created
hereunder giving rise to such liability, as the case may be, against and in
respect of any damages that such Trustee may sustain, including without
limitation attorneys' fees.
The Trustees are authorized, but not required, to accept any
property transferred to the Trustees by any person during such person's lifetime
or by such person's last will and testament. Any property so transferred to, and
accepted by, the Trustees shall become a part of such trust or trusts created by
this Agreement as such person shall direct and may be commingled with the other
property in the trust or trusts to which such property has been added and shall
be held, administered and disposed of as a part of such trust or trusts.
ARTICLE SEVENTH
Third Parties Not Responsible For Administration
17
This trust is created with the express understanding that each
bank at which an account is maintained shall have no responsibility as a
depository of funds to see to the proper administration of this trust. Upon the
transfer of the right, title and interest in and to any account by any Trustee
hereunder, the bank shall conclusively treat the transferee as the sole owner of
such right, title and interest. Until the bank shall receive from some person
interested in this trust written notice of any death or other event upon which a
right to receive income or principal may depend, the bank shall incur no
liability for payment made in good faith to persons whose interests shall have
been affected by such event. The bank shall be protected in acting upon any
notice or other instrument or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
This trust is created with the express understanding that each
issuer, transfer agent or custodian of any securities held hereunder shall have
no responsibility or liability to see to the proper administration of this
trust. Upon the transfer of the right, title and interest in and to such account
by any trustee hereunder, said issuer, transfer agent or custodian shall
conclusively treat the transferee as the sole owner of such securities. Until
the issuer, transfer agent or custodian shall receive from some person
interested in this trust written notice of any death or other event upon which a
right to receive income or principal may depend, the issuer, transfer agent or
custodian shall incur no liability for payment made in good faith to persons
whose
18
interests shall have been affected by such event. The issuer, transfer agent or
custodian shall be protected in acting upon any notice or other instrument or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
ARTICLE EIGHTH
Appointment Of Trustees
The Grantor hereby appoints XXXX X. XXXXXXXX, and XXXX XXXXXX
as joint Trustees hereunder.
If any of the Trustees for any reason shall fail or cease to
act as Trustee, the remaining Trustees, at any time after qualifying to act as
Trustee, shall have the right to serve as sole co-Trustees or Trustee hereunder,
as the case may be, without appointment of a successor co-Trustee.
Any Trustee, at any time and from time to time, by instrument
in writing signed and acknowledged, may delegate any or all of the rights,
powers, duties, authority and privileges, whether or not discretionary, provided
herein, to any other Trustee for such period or periods of time as may be
designated in such written instrument; provided, however, that any such
instrument shall be revocable at any time.
The Trustees shall have the right to resign at any time during
the life of the Grantor by giving written notice to the Grantor and at any time
after the death of the Grantor by giving written notice to the then income
beneficiaries of each trust
19
created hereby, or it none of the income beneficiaries of a trust are sui juris,
to the persons sui juris who would be entitled to a share of the principal of
such trust if it were then to terminate. If upon such resignation no Trustee
remains in office, such resignation shall not be effective until the Grantor, or
if the Grantor is unable to do so, a court of competent jurisdiction, has
appointed a successor Trustee. The expenses of the accounting of a resigning
Trustee shall be a proper charge against such trust.
If the Trustees shall resign, the successor Trustee of each
trust created hereunder shall be such person, bank or trust company as shall be
designated in a written instrument executed by the Grantor, or, if the Grantor
is not then living, by a majority of the then income beneficiaries of such
trust, or if none of the beneficiaries are sui juris, by a majority of the
persons sui juris who would be entitled to receive the principal of such trust
if it were then to terminate.
The term "Trustees" wherever used herein shall mean the
trustee or trustees in office from time to time. Any such trustee shall have the
same rights, powers, duties, authority and privileges, whether or not
discretionary, as if originally appointed hereunder.
No bond, surety or other security shall be required of any
Trustee acting hereunder for the faithful performance of the duties of Trustee,
notwithstanding any law of any State or other jurisdiction to the contrary.
20
ARTICLE NINTH
Decisions Of Trustees Are Conclusive
The determination of the Trustees in respect of the amount of
any discretionary payment of income or principal from any trust established
hereunder, and of the advisability thereof, shall be final and conclusive on all
persons, whether or not then in being, having or claiming any interest in such
trust, and upon making any such payment, the Trustees shall be released fully
from all further liability or accountability therefor,
The right of any beneficiary to any payment of income or
principal shall in every case be subject to any charge or deduction which the
Trustees may make against the same under the authority granted to the Trustees
by any law or by this Agreement.
ARTICLE TENTH
Simultaneous Death
For purposes of this Agreement, any beneficiary hereunder
shall be deemed to have predeceased any other person upon whose death such
beneficiary shall become entitled to receive income or principal unless such
beneficiary shall survive such other person by more than thirty days. The
provisions of this Agreement shall be construed as aforesaid, notwithstanding
the provisions of any applicable law establishing a different presumption of
order of death or providing for survivorship for a fixed period an a condition
of inheritance of property.
21
ARTICLE ELEVENTH
Rights Of Beneficiaries Are Not Assignable
No disposition, charge or encumbrance on the income or
principal of any trust established hereunder shall be valid or binding upon the
Trustees. No beneficiary shall have any right, power or authority to assign,
transfer, encumber or otherwise dispose of such income or principal or any part
thereof until the same shall be paid to such beneficiary by the Trustees. No
income or principal shall be subject in any manner to any claim of any creditor
of any beneficiary or liable to attachment, execution or other process of law.
ARTICLE TWELFTH
Construction
The validity and constrution of this Agreement and the trusts
created hereunder shall be governed by the laws of the State of New Jersey.
Wherever used in this Agreement and the context so requires,
the masculine shall include the feminine and the singular shall include the
plural, and vice versa.
The captions in this Agreement are for convenience of
reference, and they shall not be considered when construing this Agreement.
If under any of the provisions of this Agreement any portion
of the trust estate would be held in trust for longer than a date twenty-one
years after the death of the last survivor of the
22
Grantor, his wife, and the issue of the Grantor and other beneficiaries
hereunder now in being; then, upon such date, the trust of such portion shall
terminate and the principal, and any unpaid income thereof, shall be paid and
distributed to the person or persons then living who would have been entitled to
receive the income therefrom had the trust continued, in the proportions to
which they would have been so entitled.
ARTICLE THIRTEENTH
Binding Effect
This Agreement shall extend to and be binding upon the heirs,
executors, administrators, successors and assigns of the undersigned Grantor and
upon the Trustees acting hereunder.
23
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.
/s/ XXXXXXX XXXXXXXXX
XXXXXXX XXXXXXXXX
Grantor
/s/ XXXX X. XXXXXXXX
XXXX X. XXXXXXXX
Trustee
/s/ XXXX XXXXXX
XXXX XXXXXX
Trustee
I, XXXX XXXXXXXXX, the legal spouse of the Grantor, hereby waive, renounce,
release and forever relinquish unto the Trustees all rights of dower, curtesy,
statutory election and other rights or claims which I may have in the trust
estate described above and give by assent to the provisions of the Agreement and
to the inclusion of said property.
/s/ XXXX XXXXXXXXX
XXXX XXXXXXXXX
23
EXHIBIT A
TRUST ESTATE PROPERTY
150,000.00
STATE OF NEW JERSEY)
) SS.:
COUNTY OF BERGEN )
SS.
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXXXXX X. XXXXXXXXX, who I am satisfied is the individual named in and who
executed the within instrument, and he acknowledged that he signed, sealed and
delivered said instrument as his act and deed for the uses and purposes therein
expressed,
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 0000
XXXXX XX XXX XXXXXX)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day Of June, 1992, before
me, the subscriber, a Notary Public of the State of New jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX X. XXXXXXXX, who I am satisfied is the individual named in and who executed
the within instrument, and he acknowledged that he signed, sealed and delivered
said instrument as his act and deed for the uses and purposes therein expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 1992
26
STATE OF NEW JERSEY)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX XXXXXX, who I am satisfied is the individual named in and who executed the
within instrument, and he acknowledged that he signed, sealed and delivered said
instrument as his act and deed for the uses and purposes therein expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 0000
XXXXX XX XXX XXXXXX)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX XXXXXXXXX, who I am satisfied is the individual named in and who executed
the within instrument, and she acknowledged that she signed, sealed and
delivered said instrument as her act and deed for the uses and purposes therein
expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 1992
XXXXXXX X. XXXXXXXXX IRREVOCABLE TRUST
F/B/O XXXXXXX XXXXXXXXX
made as of June 9, 1992
by
XXXXXXX X. XXXXXXXXX
Grantor
and
XXXX X. XXXXXXXX
and
XXXX XXXXXX
Trustees
TABLE OF CONTENTS
Article Title
FIRST Beneficiaries Of Trust
SECOND Use Of Principal
THIRD Minors Or Incompetents
FOURTH Life Insurance/Death Benefits
FIFTH Irrevocability
SIXTH Special Power Of Appointment
SEVENTH Powers Of Trustees
EIGHTH Third Parties Not Responsible
NINTH Appointment of Trustees
TENTH Trustees Decisions Conclusive
ELEVENTH Simultaneous Death
TWELFTH Rights Not Assignable
THIRTEENTH Construction
FOURTEENTH Binding Effect
DECLARATION OF TRUST
DECLARATION OF TRUST, made as of June 9, 1992, among XXXXXXX
X. XXXXXXXXX, having an address at 00 Xxxxxxx Xxxxx, Xxxxxxxx, Xxx Xxxxxx 00000,
as grantor (hereinafter referred to as the "Grantor"), and XXXX X. XXXXXXXX,
having an address at 000 Xxxxxxx Xxxxxx, Xxxx Xxx, Xxx Xxxxxx 00000, and XXXX
XXXXXX, having an address at 000-00 Xxxxx Xxxxxxxx, Xxx Xxxxxxx Xxxxx, Xxx Xxxx
00000, as trustees (collectively hereinafter referred to as the "Trustees").
W I T N E S S E T H:
WHEREAS, the Grantor's wife is XXXX XXXXXXXXX, and the Grantor
has two children, XXXXXXX XXXXXXXXX and XXXXXXX XXXXXXXXX; and
WHEREAS, the Grantor desires to create an irrevocable trust of
the property described in Exhibit A hereto, together with such monies,
securities and other assets as the Trustees hereafter may hold or acquire
hereunder (said property, monies, securities and other assets, together with any
additions thereto received pursuant to the Grantor's last will and testament or
as the proceeds of insurance on the Grantor's life, or as death benefits or
otherwise, being hereinafter referred to as the "trust estate"), for the
purposes and upon the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the covenants herein
contained and other valuable consideration, the receipt and suffi-
1
ciency of which hereby is acknowledged, the Grantor hereby irrevocably
transfers, conveys, assigns and delivers to the Trustees as and for the trust
estate the property more particularly described in Exhibit A hereto, to hold the
same, and any other property which the Trustees hereafter may acquire, IN TRUST,
for the purposes and upon the terms and conditions hereinafter set forth:
ARTICLE FIRST
Beneficiaries 0f Trust
The Trustees shall pay the entire net income of this Trust, in
such periodic installments as the Trustees shall find convenient, but at least
as often as quarter-annually, to Grantor's daughter, XXXXXXX XXXXXXXXX. In
addition, the Trustees may pay to or for the benefit of said child, for her
health, education, maintenance or support, any part or all of the principal of
this trust, in such amounts and proportions as the Trustees may determine in
their absolute discretion.
If Grantor's daughter, XXXXXXX XXXXXXXXX, shall die before the
entire principal of the trust held for his benefit has been distributed, the
then principal of such trust shall be distributed to, or held in trust for the
benefit of, such person or persons among such daughter's issue and upon such
estates or conditions, as Grantor's said daughter shall appoint by Will, making
specific reference to this power. Any unappointed property shall be distributed
to the then living issue of such son, per stirpes. If there be no such issue,
distribution shall be to Grantor's then living issue,
2
per stirpes; provided, however, that any amount distributable to Grantor's son,
XXXXXXX XXXXXXXXX, for whom at such time Trustees hold a separate trust executed
this date shall be added to such trust for administrative and distribution as a
part thereof. if there be no such issue of Grantor then living, distribution
shall be to the persons who would be entitled to inherit the same from Grantor
in accordance with the laws of the State of New Jersey then in force, as if
Grantor had died immediately after the death of such daughter, intestate, owning
said property and domiciled in such State.
Notwithstanding anything to the contrary contained herein,
each time that an addition of property is made to the trust by the Grantor
during the life of the Grantor (other than the initial contribution by the
Grantor set forth in Exhibit A hereto), each beneficiary hereof, child of the
Grantor, if living at the time of the addition and if the beneficiary has not
reached the annual limit on withdrawal rights set forth below prior to such
addition, shall have the right to withdraw property then belonging to the trust
estate (including property constituting such addition) having a value at the
time of the withdrawal equal to the value of the addition at the time of the
addition divided by the number of beneficiaries. In calculating the withdrawal
right of each beneficiary resulting from an addition, any addition that would
cause some but not all of such beneficiaries reach such annual limit shall be
treated as if it had consisted of consecutive
3
additions such that the total of the resulting withdrawal rights of each
beneficiary as large as possible hereunder.
The right of withdrawal of each beneficiary pursuant to this
Article shall be subject to the limitation that the total amount which each
beneficiary may withdraw by reason of additions in any one calendar year shall
not exceed the "annual exclusion amount". The "annual exclusion amount" shall
mean the amount excludible from gifts for gift tax purposes by virtue of Section
2503(b) of the Internal Revenue Code, or any successor thereto, in effect in the
year in question (currently $ 10,000); provided that during any time that the
Grantor is married the "annual exclusion amount" shall mean twice the amount so
excludible (currently $20,000).
The Trustees, promptly after any addition of property is made
to the trust during the life of the Grantor, shall give written notice to each
beneficiary acquiring a withdrawal right by reason of such addition, setting
forth a description of the added property, the right of withdrawal resulting
from such addition, and the time limit to exercise such right. If such
beneficiary is under a legal disability, notice shall be given to the legal
guardian of or committee for the beneficiary or, if none, to a person in a
position to act on behalf of such beneficiary as the Trustees shall deem
appropriate. The withdrawal power may be exercised by written notice delivered
to the Trustees by the beneficiary or, if the beneficiary is under a legal
disability, by the legal guardian, committee or person designated by the
Trustees
4
as aforesaid. Any commission payable with respect to principal so withdrawn
shall be charged against such principal.
The withdrawal rights of each beneficiary by reason of
successive additions shall be cumulative, but the cumulative withdrawal rights
of each beneficiary, to the extent not exercised, shall be decreased an December
31st of each year (but not below zero) by the greater of $5,000 or 5% of the
value of the principal of the trust on December 31st, provided that any
withdrawal right resulting from an addition in November or December shall not be
subject to any decrease under this provision until December 31st of the
following year. If the beneficiary files for bankruptcy, the aforesaid
withdrawal right shall be forfeited.
ARTICLE SECOND
Use of Principal
The Trustees are authorized, at any time and from time to
time, to pay to, or apply to the use of, the beneficiary of any trust held
hereunder, for such beneficiary's health, education, maintenance or support, any
part or all of principal of such trust as the Trustees may determine in their
absolute discretion, without necessarily taking into account other resources
available to such beneficiary. No such payment shall be charged upon a
subsequent division of the trust estate against the principal of any share which
may be set apart for a beneficiary.
ARTICLE THIRD
5
Distributions To Minors Or Incompetents
In any case in which the Trustees are authorized or directed
by any provision of this Agreement to pay or distribute income or principal to
any person who shall be a minor or incompetent, the Trustees, in their absolute
discretion and without authorization of any court, may pay or distribute the
whole or any part of such income or principal to such minor or incompetent
personally, or may apply the whole or any part thereof directly to the health,
education, maintenance or support of such minor or incompetent, or may pay or
distribute the whole or any part thereof to the guardian, committee, conservator
or other legal representative, wherever appointed, of such minor or incompetent
or to the person with whom such minor or incompetent may from time to time
reside, or in the case of a minor, may pay or distribute the whole or any part
thereof to a custodian for such minor under any gifts to minors or transfers to
minors act. The receipt of the person to whom any such payment or distribution
is so made shall be a sufficient discharge therefor, even though the Trustees
may be such person.
The Trustees, in their absolute discretion, may defer payment
or distribution of any or all income or principal to which a minor may be
entitled until such minor shall attain the age of twenty-one (21) years, or to
make such payment or distribution at any time and from time to time, during the
minority of such minor, holding the whole or the undistributed portion thereof
as a separate fund vested in such minor but subject to the power in
6
trust hereby given to the Trustees to administer and invest such fund and to use
the income or principal thereof for the benefit of such minor as if such fund
were held in trust hereunder. No bond or other security and no periodic accounts
shall be required with respect to such fund, and the same shall be subject to
commission as if it were a separate trust fund. The Trustees shall pay and
distribute any balance of such fund to such minor when such minor shall attain
the age of twenty-one (21) years. Except as is hereinabove provided, if such
minor shall die before attaining the age of twenty-one (21) years, the Trustees
shall pay and distribute such balance to the executors, administrators or legal
representatives of the estate of such minor, or if there shall be no such legal
representative, to such persons as would have inherited the same and in the same
proportions as they would have taken if such minor had died intestate,
unmarried, the absolute owner thereof and a resident of the State in which such
minor shall die domiciled.
The word "minor", wherever used in this Article THIRD, shall
mean any person who has not attained the age of twenty-one (21) years.
ARTICLE FOURTH
Life Insurance and Death Benefits
With respect to any insurance policies or employee death
benefits payable to the Trustees, the Trustees, upon being advised that any sum
is so payable by reason of the death of the Grantor, shall endeavor to collect
the same, and may bring a suit or action
7
therefor, or may compromise, adjust, settle or submit to arbitration any claims
therefor. The Trustees shall be entitled to reimbursement from the trust estate
for expenses incurred by the Trustees in collecting or attempting to collect any
such sum by suit, action or otherwise. The Trustees, however, shall be under no
duty to bring a suit or action unless the expenses of the Trustees, including
attorneys' fees, shall have been advanced or guaranteed to the satisfaction of
the Trustees. The Trustees may repay, out of the trust estate, any advances made
by the Trustees or reimburse the Trustees for expenses incurred in collecting or
attempting to collect any sum as aforesaid.
The Trustees in no case shall be under any duty or obligation
to make any claim against the Grantor's estate, or take any action against the
executors, administrators or legal representatives of the Grantor's estate, for
reimbursement for any reduction of the sums payable upon the death of the
Grantor by reason of unpaid premiums or for any other cause, including any loans
and interest thereto secured by any insurance policies.
During the life of the Grantor, the Trustees may, in their
discretion, apply the net income or principal of the trust estate to the payment
of premiums on any life insurance policy of which the Trustees or any trust
hereunder is beneficiary. If the net income and principal is insufficient to pay
such premiums, the Trustees may notify the Grantor and the beneficiaries of the
trust of such insufficiency and give them the opportunity to furnish the
necessary funds. If neither the Grantor nor any of the beneficiar-
8
ies furnishes the funds necessary to pay the premiums, the Trustees may, but
shall not be obligated to, obtain the funds required to pay such premiums by
selling a portion of the principal of the trust estate, by borrowing on the
security of such principal, by borrowing against the cash surrender value of the
policy or by surrendering some policies and using the proceeds to pay the
premiums on other policies. The Trustees also is authorized to convert such
policies to paid-up or extended term insurance if the trust estate does not have
the necessary funds to pay the premiums. If no funds are available for the
payment of the premiums of any insurance policy, the Trustees may assign
ownership of such policy to the then living issue of the Grantor.
ARTICLE FIFTH
Irrevocability
This Agreement and the trusts created hereunder are
irrevocable. The Grantor shall execute such further instruments as shall be
necessary to vest the Trustees with full title to the property which is the
subject of this Agreement.
ARTICLE SIXTH
Powers Of Trustees
In the administration of any property, real or personal, at
any time forming a part of the trust estate, including accumulated income, and
in the administration of any trust created hereunder, the Trustees, in addition
to and without limitation of the
9
powers provided by law, shall have the following powers to be exercised in the
absolute discretion of the Trustees, except as otherwise expressly provided in
this Agreement:
(a) To retain such property for any period, whether or not the same is of
the character permissible for investments by fiduciaries under any
applicable law, and without regard to the effect any such retention
may have upon the diversity of investments.
(b) To sell, transfer, exchange, convert or otherwise dispose of, or grant
options with respect to, such property, at public, or private sale,
with or without security, in such manner, at such times, for such
prices, and upon such terms and conditions as the Trustees may deem
advisable.
(c) To invest and reinvest in common or preferred stocks, securities,
investment trusts, bonds and other property, real or personal, foreign
or domestic, including any undivided interest in any one or more
common trust funds, whether or not such investments be of the
character permissible for investments by fiduciaries under any
applicable law, and without regard to the effect any such investment
may have upon the diversity of investments.
(d) To render liquid the trust estate or any trust created hereunder in
whole or in part, at any time and from time to time, and to hold
unproductive property, cash or readily marketable securities of little
or no yield for such period as the Trustees may deem advisable.
10
(e) To lease any such property beyond the period fixed by statute for
leases made by fiduciaries and beyond the duration of any trust
created hereunder.
(f) To join or become a party to, or to oppose, any reorganization,
readjustment, recapitalization, foreclosure, merger, voting trust,
dissolution, consolidation or exchange, and to deposit any securities
with any committee, depository or trustee, and to pay any fees,
expenses and assessments incurred in connection therewith, and to
charge the same to principal, and to exercise conversion, subscription
or other rights, and to make any necessary payments in connection
therewith, or to sell any such privileges.
(g) To vote in person at meetings of stock or security holders and
adjournments thereof, and to vote by general or limited proxy with
respect to any stock or securities.
(h) To hold stock and securities in the name of a nominee without
indicating the trust character of such holding, or unregistered or in
such form as will pass by delivery, or to use a central depository and
to permit registration in the name of a nominee.
(i) To initiate or defend, at the expense of the trust estate, any
litigation relating to this Agreement or any property of the trust
estate which the Trustees consider advisable, and to pay, compromise,
compound, adjust, submit to arbitration, sell or release any claims or
11
demands of the trust estate or any trust created hereunder against others or of
others against the same as the Trustees may deem advisable, including the
acceptance of deeds of real property in satisfaction of notes, bonds and
mortgages, and to make any payments in connection therewith which the Trustees
may deem advisable.
(j)
(j) To borrow money for any purpose from any source, including any trustee
at any time acting hereunder, and to secure the repayment of any and
all amounts so borrowed by mortgage or pledge of any property.
(k) To possess, manage, develop, subdivide, control, partition, mortgage,
lease or otherwise deal with any and all real property; to satisfy and
discharge or extend the term of any mortgage thereof; to execute the
necessary instruments and covenants to effectuate the foregoing
powers, including the giving or granting of options in connection
therewith; to make repairs, replacements and improvements, structural
or otherwise, or abandon the same if deemed to be worthless or not of
sufficient value to warrant keeping or protecting; to abstain from the
payment of real estate taxes, assessments, water charges and sewer
rents, repairs, maintenance and upkeep of the same, to permit to be
lost by tax sale or other proceeding or to convey the same for a
nominal consideration or without consideration; to set up appropriate
reserves out of income for repairs, modernization and upkeep of
12
buildings, including reserves for depreciation and obsolescence, and
to add such reserves to principal and, if the income from the property
itself should not suffice for such purposes, to advance out of other
income, any sums needed therefor, and advance any income of the trust
for the amortization of any mortgage on property held in the trust.
(1) To carry insurance of the kinds and in the amounts which the Trustees
consider advisable, at the expense of the trust estate, to protect the
trust estate and the Trustees personally against any hazard.
(m) To make distribution of the trust estate or of the principal of any
trust created hereunder in kind, and to cause any distribution to be
composed of cash, property or undivided fractional shares in property
different in kind from any other distribution, without regard to the
income tax basis of the property distributed to any beneficiary of any
trust.
(n) To allocate receipts and disbursements of the trust estate between
income and principal as the Trustees in their discretion may
determine.
(o) To execute and deliver any and all instruments or writings which it
may deem advisable to carry out any of the foregoing powers. No party
to any such instruments or writings shall be obligated to inquire into
its validity.
13
(p) To exercise all such rights and powers and to do all such acts and
enter into all such agreements as persons owning similar property in
their own right might lawfully exercise, do or enter into.
(q) It is Grantor's intention that with respect to stock of a corporation
which desires to elect or has elected qualification pursuant to
Subchapter "'S' Corporation"), which is or becomes an asset of any
trust created hereunder and Trustees determine that such election is
in the beat interest of the trust and the beneficiary thereof and
Trustees determine to consent to or continue such election, such stock
shall be held in separate trusts, one for each individual income
beneficiary, and such stock shall be allocated among such separate
trusts, and the provisions of each such trust shall have such terms as
shall meet the requirements of a "qualified Subchapter "'S' trust" as
defined in Section 1361(d) (3) of the Internal Revenue Code of 1986,
or any successor provision thereto, which present requirements are as
set forth in ARTICLE SIXTH (c) (i) hereof. To the extent that a
provision of any trust does not meet the requirements of said Internal
Revenue Code Section, the provision shall be given no force or effect
and such trust shall be administered with regard to such provision.
(i) At present, the Internal Revenue Code provides that a "qualified
Subchapter 'S' trust" means a trust, (a) all
14
the income of which is distributed currently to one individual (hereinafter
"the current income beneficiary") who is a citizen or a resident of the
United States; and (B) the terms of which require that: (I) during the life
of the current income beneficiary, there shall be only one income
beneficiary of the trust; (II) any principal distributed during the life of
the current income beneficiary shall be distributed only to such
beneficiary; (III) the income interest of the current income beneficiary in
the trust shall terminate on the earlier of such beneficiary's death or the
termination of the trust; and (IV) upon the termination of the trust during
the life of the current income beneficiary, the trust shall distribute all
of its assets to such beneficiary.
(ii) Grantor appoints Trustees of a trust created under this Trust
Agreement which holds stock in a corporation which desires to elect or has
elected qualification pursuant to Subchapter 'S' of the Internal Revenue
Service Code of 1986, as amended, if the beneficiary of such trust has not
attained the age of Twenty-One (21) years or is determined to be
incapacitated pursuant to ARTICLE THIRD of this Trust Agreement, as the
legal representative of such beneficiary, to have the sole power to make an
election on behalf of such beneficiary to have such trust qualify under
Internal Revenue Code
15
Section 1361(d), or any successor provision thereto, as a qualified
Subchapter 'S' trust and/or to consent to the corporation's Subchapter 'S'
election pursuant to Internal Revenue Section 1362, or any successor
provision thereto,
(iii) A trust created under this Trust Agreement holding stock of a
corporation which has elected qualification pursuant to Subchapter 'S' of
the Internal Revenue Code of 1986, as amended, may only be merged with a
trust for the benefit of the same beneficiary which qualifies as a
Subchapter 'S' trust pursuant to Section 1361(d) (3) of the Internal
Revenue Code of 1086, as amended, or any successor provision thereto.
(iv) Anything herein to the contrary notwithstanding, with regard to a
qualified Subchapter 'S' trust as defined in Section 1361(d) (3) of the
Internal Revenue Code of 1986, or any successor provision thereto, all
income distributed at a beneficiary's death shall be payable to the estate
of such beneficiary.
No person who deals with any Trustee hereunder shall be bound to see to
the application of any asset delivered to such Trustee or to inquire into the
authority for, or propriety of, any action taken or not taken by such Trustee.
This Agreement, however, shall not be construed to permit any person to deal
with the trust estate for less than adequate consideration, to borrow without
adequate interest or adequate security, to exercise any power of
16
administration in a nonfiduciary capacity, or otherwise to act in such manner as
to cause the Grantor to be treated as the owner of the trust estate or any part
thereof.
No Trustee shall be liable for acts or omissions in administering the trust
estate or any trust created by this Agreement, except for that Trustee's own
actual fraud, gross negligence or willful misconduct. If any Trustee becomes
liable as Trustee to any other person who is not a beneficiary in connection
with any matter not within the Trustee's control and not due to the Trustee's
actual fraud, gross negligence or willful misconduct, such Trustee shall be
fully indemnified and held harmless by the trust estate and any trust created
hereunder giving rise to such liability, as the case may be, against and in
respect of any damages that such Trustee may sustain, including without
limitation attorneys' fees.
The Trustees are authorized, but not required, to accept any
property transferred to the Trustees by any person during such person's lifetime
or by such person's last will and testament. Any property so transferred to, and
accepted by, the Trustees shall become a part of such trust or trusts created by
this Agreement as such person shall direct and may be commingled with the other
property in the trust or trusts to which such property has been added and shall
be held, administered and disposed of as a part of such trust or trusts.
ARTICLE SEVENTH
Third Parties Not Responsible For Administration
17
This trust is created with the express understanding that each
bank at which an account is maintained shall have no responsibility as a
depository of funds to see to the proper administration of this trust. Upon the
transfer of the right, title and interest in and to any account by any Trustee
hereunder, the bank shall conclusively treat the transferee as the sole owner of
such right, title and interest. Until the bank shall receive from some person
interested in this trust written notice of any death or other event upon which a
right to receive income or principal may depend, the bank shall incur no
liability for payment made in good faith to persons whose interests shall have
been affected by such event. The bank shall be protected in acting upon any
notice or other instrument or document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
This trust is created with the express understanding that each
issuer, transfer agent or custodian of any securities held hereunder shall have
no responsibility or liability to see to the proper administration of this
trust. Upon the transfer of the right, title and interest in and to such account
by any trustee hereunder, said issuer, transfer agent or custodian shall
conclusively treat the transferee as the sole owner of such securities. Until
the issuer, transfer agent or custodian shall receive from some person
interested in this trust written notice of any death or other event upon which a
right to receive income or principal may depend, the issuer, transfer agent or
custodian shall incur no liability for payment made in good faith to persons
whose
18
interests shall have been affected by such event. The issuer, transfer agent or
custodian shall be protected in acting upon any notice or other instrument or
document believed by it to be genuine and to have been signed or presented by
the proper party or parties.
ARTICLE EIGHTH
Appointment Of Trustees
The Grantor hereby appoints XXXX X. XXXXXXXX, and XXXX XXXXXX
as joint Trustees hereunder.
If any of the Trustees for any reason shall fail or cease to
act as Trustee, the remaining Trustees, at any time after qualifying to act as
Trustee, shall have the right to serve as sole co-Trustees or Trustee hereunder,
as the case may be, without appointment of a successor co-Trustee.
Any Trustee, at any time and from time to time, by instrument
in writing signed and acknowledged, may delegate any or all of the rights,
powers, duties, authority and privileges, whether or not discretionary, provided
herein, to any other Trustee for such period or periods of time as may be
designated in such written instrument; provided, however, that any such
instrument shall be revocable at any time.
The Trustees shall have the right to resign at any time during
the life of the Grantor by giving written notice to the Grantor and at any time
after the death of the Grantor by giving written notice to the then income
beneficiaries of each trust
19
created hereby, or it none of the income beneficiaries of a trust are sui juris,
to the persons sui juris who would be entitled to a share of the principal of
such trust if it were then to terminate. If upon such resignation no Trustee
remains in office, such resignation shall not be effective until the Grantor, or
if the Grantor is unable to do so, a court of competent jurisdiction, has
appointed a successor Trustee. The expenses of the accounting of a resigning
Trustee shall be a proper charge against such trust.
If the Trustees shall resign, the successor Trustee of each
trust created hereunder shall be such person, bank or trust company as shall be
designated in a written instrument executed by the Grantor, or, if the Grantor
is not then living, by a majority of the then income beneficiaries of such
trust, or if none of the beneficiaries are sui juris, by a majority of the
persons sui juris who would be entitled to receive the principal of such trust
if it were then to terminate.
The term "Trustees" wherever used herein shall mean the
trustee or trustees in office from time to time. Any such trustee shall have the
same rights, powers, duties, authority and privileges, whether or not
discretionary, as if originally appointed hereunder.
No bond, surety or other security shall be required of any
Trustee acting hereunder for the faithful performance of the duties of Trustee,
notwithstanding any law of any State or other jurisdiction to the contrary.
20
ARTICLE NINTH
Decisions Of Trustees Are Conclusive
The determination of the Trustees in respect of the amount of
any discretionary payment of income or principal from any trust established
hereunder, and of the advisability thereof, shall be final and conclusive on all
persons, whether or not then in being, having or claiming any interest in such
trust, and upon making any such payment, the Trustees shall be released fully
from all further liability or accountability therefor,
The right of any beneficiary to any payment of income or
principal shall in every case be subject to any charge or deduction which the
Trustees may make against the same under the authority granted to the Trustees
by any law or by this Agreement.
ARTICLE TENTH
Simultaneous Death
For purposes of this Agreement, any beneficiary hereunder
shall be deemed to have predeceased any other person upon whose death such
beneficiary shall become entitled to receive income or principal unless such
beneficiary shall survive such other person by more than thirty days. The
provisions of this Agreement shall be construed as aforesaid, notwithstanding
the provisions of any applicable law establishing a different presumption of
order of death or providing for survivorship for a fixed period an a condition
of inheritance of property.
21
ARTICLE ELEVENTH
Rights Of Beneficiaries Are Not Assignable
No disposition, charge or encumbrance on the income or
principal of any trust established hereunder shall be valid or binding upon the
Trustees. No beneficiary shall have any right, power or authority to assign,
transfer, encumber or otherwise dispose of such income or principal or any part
thereof until the same shall be paid to such beneficiary by the Trustees. No
income or principal shall be subject in any manner to any claim of any creditor
of any beneficiary or liable to attachment, execution or other process of law.
ARTICLE TWELFTH
Construction
The validity and constrution of this Agreement and the trusts
created hereunder shall be governed by the laws of the State of New Jersey.
Wherever used in this Agreement and the context so requires,
the masculine shall include the feminine and the singular shall include the
plural, and vice versa.
The captions in this Agreement are for convenience of
reference, and they shall not be considered when construing this Agreement.
If under any of the provisions of this Agreement any portion
of the trust estate would be held in trust for longer than a date twenty-one
years after the death of the last survivor of the
22
Grantor, his wife, and the issue of the Grantor and other beneficiaries
hereunder now in being; then, upon such date, the trust of such portion shall
terminate and the principal, and any unpaid income thereof, shall be paid and
distributed to the person or persons then living who would have been entitled to
receive the income therefrom had the trust continued, in the proportions to
which they would have been so entitled.
ARTICLE THIRTEENTH
Binding Effect
This Agreement shall extend to and be binding upon the heirs,
executors, administrators, successors and assigns of the undersigned Grantor and
upon the Trustees acting hereunder.
23
IN WITNESS WHEREOF, this Agreement has been duly executed as of the date first
above written.
/s/ XXXXXXX XXXXXXXXX
XXXXXXX XXXXXXXXX
Grantor
/s/ XXXX X. XXXXXXXX
XXXX X. XXXXXXXX
Trustee
/s/ XXXX XXXXXX
XXXX XXXXXX
Trustee
I, XXXX XXXXXXXXX, the legal spouse of the Grantor, hereby waive, renounce,
release and forever relinquish unto the Trustees all rights of dower, curtesy,
statutory election and other rights or claims which I may have in the trust
estate described above and give by assent to the provisions of the Agreement and
to the inclusion of said property.
/s/ XXXX XXXXXXXXX
XXXX XXXXXXXXX
23
EXHIBIT A
TRUST ESTATE PROPERTY
150,000.00
STATE OF NEW JERSEY)
) SS.:
COUNTY OF BERGEN )
SS.
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXXXXX X. XXXXXXXXX, who I am satisfied is the individual named in and who
executed the within instrument, and he acknowledged that he signed, sealed and
delivered said instrument as his act and deed for the uses and purposes therein
expressed,
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 0000
XXXXX XX XXX XXXXXX)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day Of June, 1992, before
me, the subscriber, a Notary Public of the State of New jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX X. XXXXXXXX, who I am satisfied is the individual named in and who executed
the within instrument, and he acknowledged that he signed, sealed and delivered
said instrument as his act and deed for the uses and purposes therein expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 1992
26
STATE OF NEW JERSEY)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX XXXXXX, who I am satisfied is the individual named in and who executed the
within instrument, and he acknowledged that he signed, sealed and delivered said
instrument as his act and deed for the uses and purposes therein expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 0000
XXXXX XX XXX XXXXXX)
) SS.:
COUNTY OF BERGEN )
Be it remembered that on this 9th day of June, 1992, before
me, the subscriber, a Notary Public of the State of New Jersey authorized to
take acknowledgments and proof in said County and State, personally appeared
XXXX XXXXXXXXX, who I am satisfied is the individual named in and who executed
the within instrument, and she acknowledged that she signed, sealed and
delivered said instrument as her act and deed for the uses and purposes therein
expressed.
/s/ XXXX X. XXXXXX
XXXX X. XXXXXX
XXXX X. XXXXXX
A Notary Public of New Jersey
My Commission Expires June 19, 1992
