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Home My WebLink About12-02-09J REV-1500 1505607120 EX (06-05) OFFICIAL USE ONLY PA Department of Revenue County Code Year File Number Bureau of Individual Taxes INHERITANCE TAX RETURN PO 60X.280601 21 0 9 0 3 4 3 Harrisburg, PA 17128-0601 RESIDENT DECEDENT ENTER DECEDENT INFORMATION BELOW Social Security Number Date of Death Date of Birth 222249977 03022009 02041907 Decedent's Last Name Suffix Decedent's First Name MI BELLANCA LEONARD (If Applicable) Enter Surviving Spouse's Information Below Spouse's Last Name Suffix Spouse's First Name MI Spouse's Social Security Number FILL IN APPROPRIATE OVALS BELOW ® 1. Original Return ^ 4. Limited Estate ® g Decedent Died Testate (Attach Copy of Will) THIS RETURN MUST BE FILED IN DUPLICATE WITH THE REGISTER OF WILLS ^ 2. Supplemental Retum ^ qa. Future Interest Compromise (date of death after 12-12.82) ® ~ Decedent Maintained a Living Trust (Attach Copy of Trust) ^ 9. Litigation Proceeds Received ^ 1 p. Spousal Poverty Credit (dale of death 1 t .Election to tax under Sec. 9113(A) between 12-31-91 and t-1.95) ^ (Attach SCh. O) CORRESPONDENT -THIS SECTION MUST BE COMPLETED. ALL CORRESPONDENCE AND CONFIDENTIAL TAX INFOR ATION SHOULD BE DIRECTED TO: ame Daytime Telephone Number RICHARD E. CONNELL ESQ. 7172328731 Firm Name (If Applicable) BALL, MURREN & CONNELL Ort` ~ First line of address 2303 MARKET STREET Second line of address City or Post Office CAMP HILL State ZIP Code PA 17011 ^ 3, Remainder Return (date of death prior to 12-13-82) ^ 5. Federal Estate Tax Return Required 0 8. Total Number of Safe Deposit Boxes REGISTER ~I~LLS USE~ILY r' A ~ i' 7"t Z7 ~ r- G ~ --.. ~ rn 7Cl~~ I N ~~c~~ ~ c ~ ~' D~E~ILED to ~. rya an ^.; - =r_ro '; i _~ 4_> -r ;~.:3 r -r~f i Correspondent'se-mail address: COnnell~bmC-law.net Under penalties of pery'ury, I deGare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete. DeGaration of preparer other than the personal representative Is based on all information of which preparer has anv knowledge. vwnn rcnovi. vrv~ro: ~ rv m c i ur<rv DATE (/G,~ Leonard C. Bellanca /Y/~~~Ze~c~ ADDRESS 11 y, nicsburg, PA 17055 GNATURE OF PREP R HER A R RES N TIVE DATE Richard E. Connell Esq. p AD 2303 Market Street, Camp Hill, PA 17011 Side 1 1505607120 1505607120 J ~~ REV-1500 EX 1505607220 Decedents Name: B E L L A N C A, L E O N A R D RECAPITULATION 1. Real Estate (Schedule A) .......................................................................................... 1. 2. Stocks and Bonds (Schedule B) ............................................................................... 2. 3. Closely Held Corporation, Partnership or Sole-Proprietorship (Schedule C).......... 3. 4. Mortgages & Notes Receivable (Schedule D) ............................................... ........... 4. 5• Cash, Bank Deposits & Miscellaneous Personal Property (Schedule E) ...... .......... 5. 6. Jointly Owned Property (Schedule F) ^ Separate Billing Requested ... .......... 6. 7. Inter-Vivos Transfers & Miscellaneous Non-Probate Property (Schedule G) ^ Separate Billing Requested ... .......... 7, 8. Total Gross Assets (total Lines 1-7) ............................................................. .......... g, 9. Funeral Expenses & Administrative Costs (Schedule H) ............................... .......... 9. 10. Debts of Decedent, Mortgage Liabilities, & Liens (Schedule I) ...................... .......... 10. 11. Total Deductions (total Lines 9 & 10) ........................................................... ........... 11. 12. Net Value of Estate (Line 8 minus Line 11) .................................................. ........... 12. 13. Charitable and Governmental Bequests/Sec 9113 Trusts for which an election to tax has not been made (Schedule J) ....................................... .......... 13, 14. Net Value Subject to Tax (Line 12 minus Line 13) ............................................... .. 14. TAX COMPUTATION -SEE INSTRUCTIONS FOR APPLICABLE RATES 15. Amount of Line 14 taxable at the spousal tax rate, or transfers under Sec. 9116 (a)(1.2) X .00 15. 16. Amount of Line 14 taxable at lineal rate X .045 1, 2 0 7, 7 5 3. 5 5 16. 17. Amount of Line 14 taxable at sibling rate X .12 17. 18. Amount of Line 14 taxable at collateral rate X .15 18. 19. Tax Due .................................................................................................................... . 19. 20. FILL IN THE OVAL IF YOU ARE REQUESTING A REFUND OF AN OVERPAYMENT. Decedent's Social Security Number 222249977 158.34 140,125.00 9,274.09 1,106,894.94 1,256,452.37 47,837.54 861.28 48,698.82 1,207,753.55 1,207,753.55 54,348.91 54,348.91 ~~ Side 2 1505607220 1505607220 J REV-1500 EX Page 3 Decedent's Complete Address: File Number 21 - 09 - 0343 Bellanca, Leonard STREET ADDRESS 4905 East Trindle Road CITY STATE ZIP Mechanicsburg PA 17055 Tax Payments and Credits: 1. Tax Due (Page 1 Line 19) 2. Credits/Payments A. Spousal Poverty Credit B. Prior Payments C. Discount 49,419.00 2,601.00 (1) 54,348.91 Total Credits (A + B + C) (2) 52,020.00 3. InteresUPenalty if applicable - p. Interest E. Penalty _ Total InteresUPenalty (D + E) (3) 0.00 --- --- _ 4. If Line 2 is greater than Line 1 + Line 3, enter the difference. This is the OVERPAYMENT. (4) Check box on Page 2 Line 20 to request a refund 5. If Line 1 + Line 3 is greater than Line 2, enter the difference. This is the TAX DUE. (5) 2 , 3 2 8.91 q, Enter the interest on the tax due. (5A) B. Enter the total of Line 5 + 5A. This is the BALANCE DUE. (5B) 2 , 3 2 $ . 9 ~ Make Check Payable to: REGISTER OF WILLS, AGENT ~_: _ ~ .. PLEASE ANSWER THE FOLLOWING QUESTIONS BY PLACING AN "X" IN THE APPROPRIATE BLOCKS 1. Did decedent make a transfer and: Yes No a. retain the use or income of the property transferred :.................................................................................. ^x b. retain the right to designate who shall use the property transferred or its income :.................................... c. retain a reversionary interest; or .................................................................................................................. U i_~ d. receive the promise for life of either payments, benefits or care? .............................................................. ~ ~~ 2. If death occurred after December 12, 1982, did decedent transfer property within one year of death without receiving adequate consideration? ....................................................................................................................... u 'U 3. Did decedent own an "in trust for' or payable upon death bank account or security at his or her death?......... ~ 0 4. Did decedent own an Individual Retirement Account, annuity, or other non-probate property which contains a beneficiary designation? ...................................................................................................................... ~~ ~~ IF THE ANSWER TO ANY OF THE ABOVE QUESTIONS IS YES, YOU MUST COMPLETE SCHE~D~ULE G AND FILE IT AS PART OF THE RETURN. ~.T. tiz~k4: _~,4~~-;r~.'- ~%~ ~ ~ },~r~~~~k$~~.4' ~~- ..:~°,. t..' `;F ice, :t'".h For dates of death on or after July 1, 1994 and before January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is three (3) percent [72 P.S. §9116 (a) (1.1) (i)]. For dates of death on or after January 1, 1995, the tax rate imposed on the net value of transfers to or for the use of the surviving spouse is zero (0) percent p2 P.S. §9116 (a) (1.1) (ii)J. The statute does not exempt a transfer to a surviving spouse from tax, and the statutory requirements for disclosure of assets and filing a tax return are still applicable even if the surviving spouse is the only beneficiary. For dates of death on or after July 1, 2000: The tax rate imposed on the net value of transfers from a deceased child twenty-one years of age or younger at death to or for the use of a natural parent, an adoptive parent, or a stepparent of the child is zero (0) percent [72 P.S. §9116 (a) (1.2)]. The tax rate imposed on the net value of transfers to or for the use of the decedent's lineal beneficiaries is four and one-half (4.5) percent, except as noted in 72 P.S. §9116 1.2) [72 P.S. §9116 (a) (1)]. The tax rate imposed on the net value of transfers to or for the use of the decedent's siblings is twelve (12) percent [72 P.S. §9116 (a) (1.3)]. A sibling is defined under Section 9102, as an individual who has at least one parent in common with the decedent, whether by blood or adoption. COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT SCHEDULE B STOCKS & BONDS FILE NUMBER ESTATE OF Bellanca, Leonard 21 - 09 - 0343 All property jointly-owned with right of survivorship must be disclosed on Schedule F. ITEM DESCRIPTION UNIT VALUE !VALUE AT DATE OF NUMBER DEATH 1 Lucent / Alcatel $.5278 ' 158.34 300 shares common stock TOTAL (Also enter on line 2, Recapitulation) 158.34 SCHEDULE C CLOSELY-HELD CORPORATION, COMMONWEALTH OF PENNSYLVANIA PARTNERSHIP or INHERITANCE TAX RETURN RESIDENT DECEDENT SOLE-P RO P RI ETO RS H I P FILE NUMBER ESTATE OF Bellanca, Leonard 21 - 09 - 0343 Schedule C-1 or C-2 (Including all supporting information) must be attached for each closely-held corporation/partnership interest of the decedent, other than asole-proprietorship. See instructions for the supporting information to be submitted for sole-proprietorships. ITEM DESCRIPTION VALUE AT DATE OF NUMBER DEATH 1 Bellanca Family GAA Partnership (Valuation Attached) 72,125.00 2 ~ Empire State Building Associates (Valuation Attached) ~ 68,000.00 TOTAL (Also enter on Line 3, Recapitulat;on) I 140,125.00 SCHEDULE E CASH, BANK DEPOSITS, & MISC. COAMIONWEALTH OF PENNSriVnNw PERSONAL PROPERTY INHERRANCE TA7C RETURN RESIDENT DECEDENT FILE NUMBER ESTATE OF Bellanca, Leonard 21 - 09 - 0343 Include the proceeds of litigation and the date the proceeds were received by the estate. All property jointly-owned with the right of survivorship must be disclosed on schedule F. ITEM DESCRIPTION VALUE AT DATE OF NUMBER DEATH 1 Wachovia -Account No. 9132 9,274.09 TOTAL (Also enter on Llne 5, Recapitulation) ~ 9,274.09 COMMONWEALTH OF PENNSYLVANIA SCHEDULE G INHERITANCE TAX RETURN INTER-VIVOS TRANSFERS ~ RESIDENT DECEDENT MISC. NON-PROBATE PROPERTY ESTATE OF Bellanca, Leonard FILE NUMBER 21 - 09 - 0343 This schedule must be completed and filed if the answer to any of questions 1 through 4 on page 2 is yes. ITEM NUMBER DESCRIPTION OF PROPERTY DATE OF DEATH PY VALUE OF ASSET and t ed a of trans(e a tAttach a cot eofrthe Ideed1 or~ el estate i ~~ OF DECD'S INTEREST EXCLUSION TAXABLE VALUE (IF APPLICABLE) II 1 -- _ _____ -_ _ _ _- _ Leonard Bellanca Trust ~ 529,581.04 _ _ ___ -- ', 529,581.04 Under Trust 4/15/97 ~ I 2 Trust for the Benefit of 577,313.90 ', 577,313.90 Leonard Bellanca under 'I Mary G. Bellanca Trust 10/9/97 ~, ~ i I ', I 'li i I ~ I ', i ': TOTAL (Also enter on line 7, Recapitulation) .1,106,894.94 CHEDIRF H ~ COhMONVYEALTH OF PENNSYLVANIA rVl~ ~NGI~ INHERITANCE TAX RETURN e~~~e~/~ /~M'TG~ RESIDENT DECEDENT ram. w, wr , , v'~, 1- ` V~Jv7 ~ ~7 FILE NUMBER ESTATE OF Bellanca, Leonard __ 21 - 09 - 0343 _ Debts of decedent must be reported on Schedule I. I I EM DESCRIPTION NUMBER FUNERAL EXPENSES: A. 1 Malpezzi Funeral Home 2 3 4 5 B. 1. 2. 3. 4. Funeral Luncheon Flowers for Funeral Luncheon Clergy Honorarium Cathedral Cemetery (Headstone-Grave Monument) i ADMINISTRATIVE COSTS: Personal Representative's Commissions Leonard C. Bellanca Social Security Number(s) / EIN Number of Persona! Representative(s): Street Address 112 Leyton Way city Mechanicsburg state PA zip 17055 Year(s) Commission paid 2009 Attorney's Fees Ball, Murren & Connell Family Exemption: (If decedent's address is not the same as claimant's, attach explanation) Claimant Street Address City State Zip Relationship of Claimant to Decedent Probate Fees Register of Wills, Cumberland County 5. Accountant's Fees Bergdoll and Company 6. Tax Return Preparer's Fees 7. Other Administrative Costs 1 Leonard C. Bellanca -Reimbursement of Expenses (postage, auto, supplies) AMOUNT 8, 598.65 3,868.97 75.00 125.00 2,500.00 15,000.00 4,000.00 168.00 8,087.50 500.00 TOTAL (Also enter on line 9, Recapitulation) 47,837.54 Schedule H Funeral & COMMONWEALTH OF PENNSYLVANIA w~N~M ^~ ~n~ INHERITANCE TAX RETURN /1~,a' U' II.711AYYC \+W 41 RESIDENT DECEDENT FILE NUMBER ESTATE OF Bellanca, Leonard J 21 09 - 0343 2 Reserve: For prior tax years and for additional professional fees. 3,000.00 3 Ziegler's Storage & Transfer 314.42 4 Appraisers & Planners, Inc. - Valution of Partnerships ~ 1,400.00 5 Wien & Malkin Attorneys (Partnership Transfers of Empire State Building Associates) I~ 200.00 Page 2 of Schedule H SCHEDULEI DEBTS OF DECEDENT, MORTGAGE COMMONWEALTH OF PENNSriVANIA LIABILITIES INHERRANCE TAX RETURN , & LIENS RESIDENT DECEDENT FILE NUMBER ESTATE OF Bellanca Leonard , 21 - 09 - 0343 Include unreimbursed medical expenses. ITEM NUMBER DESCRIPTION AMOUNT 1 Azizkhan Internal Medicine 35.76 2 Verizon (final bill) 52.52 3 Home Instead-Personal Services 246.00 4 Help-U-File (professional processing of medical bills -dealings with third party insurers and with 27.00 health care providers.) 5 Edna Goode -Personal Caregiver 500.00 TOTAL (Also enter on Line 10, Recapitulation) ~ 861.28 REV-7673 EX+ (9.00) COMMONWEALTH OF PENNSYLVANIA INHERITANCE TAX RETURN RESIDENT DECEDENT ESTATE OF Bellanca, Leonard NUMBER I. NAME AND ADDRESS OF PERSON(S) RECEIVING PROPERTY ,TAXABLE DISTRIBUTIONS[include outright spousal i distributions, and transfers under Sec. 9116 (a) (1.2)] 1 f Leonard C. Bellanca 112 Leyton Way Mechanicsburg, PA 17055 2 i Mary Ann Slattery 3209 Nuttree Woods Drive ', Midlothian, VA 23112 3' Paul M. Bellanca 1730 Nakiu Place Honolulu, HI 96822 FILE NUMBER 21 - 09 - 0343 RELATIONSHIP TO SHARE OF ESTATE ~ AMOUNT OF t51 A 1 t DECEDENT (Words) ($$$) Do Not Llat Trustee(a) ~ _ _ _ _ _ _ Son Daughter Son One-fifth of remainder Partnership interests on Schedule C plus one-fifth of remainder. One-fifth of remainder ~ Enter dollar amounts for distributions shown above on lines 15 through 1 S, as appropriate, on Rev 1500 cover sheet i II. NON-TAXABLE DISTRIBUTIONS: A. SPOUSAL DISTRIBUTIONS UNDER SECTION 9113 FOR WHICH AN ELECTION TO TAX IS NOT BEING MADE B. CHARITABLE AND GOVERNMENTAL DISTRIBUTIONS SCHEDULE) BENEFICIARIES TOTAL OP PART II -ENTER TOTAL NON-TAXABLE DISTRIBUTIONS ON LINE 13 OF REV-1500 COVER SHE-E ~ 0.00 REV-1613 EX+ (8.00) SCHEDULE J CDMMNHERIETANCETAXRETURNANIA BENEFICIARIES continued RESIDENT DECEDENT ESTATE OF Bellanca, Leonard ~ FILE NUMBER 21 - 09 - 0343 T _ _ _ -- -- -- ------ -- _..- - ----- ---- --- _ _ _ - -- RELATIONSHIP TO SHARE OF ESTATE AMOUNT OF ESTATE NUMBER ~~ NAME AND ADDRESS OF PERSON(S) DECEDENT (Words) ($$$) RECEIVING PROPERTY Do Not Llat Trustee(s) I~ (TAXABLE DISTRIBUTIONS [include outright spousal j i distributions and transfers under Sec. X116 (a) (1.2)] i 4 James A. Bellanca Son One-fifth of ~ 310 Keystone Court I remainder. '~, Glencoe, IL 60022 ' I 5 I! Joseph J. Bellanca Son ~ One-fifth of i 61 B Line Road 'remainder. Malvern, PA 19355 Page 2 of Schedule J LAST WILL AND TESTAMENT OF LEONARD BELLANCA I, LEONARD BELLANCA, wn-ently a resident of and domiciled in the Town of Hilton Head Island, County of Beaufort, State of South Carolina, do hereby make, publish and declare this to be my Last Will and Testament. ARTICLE t I am married to MARY G. BELLANCA, who is referred to in this Instrument as my "spouse." LEONARD C. BELLANCA, of Mechanicsburg, Pennsylvania, JAMES A. BELLANCA, of Winnetka, Illinois, JOSEPH J. BELLANCA, of Malvern, Pennsylvania, PAUL M. BELLANCA, of Honolulu, Hawaii, and MARY ANN SLATTERY, of Midliothian, Virginia, together with any children whom I may adopt after my execution of this Instrument, are referred to in this Instrument as my children, and no other individual, regardless of relationship to me, shall be entitled to share in any bequest or devise made to my children, or to any of them. It is my wish that, upon my death, I be cremated and my ashes disposed of as determined by my Executor. ARTICLE II I revoke all Wills and Codicils previously made by me. I direct that my just debts (as determined by my Executor), the expenses of my last illness and funeral, and the expenses of the administration of my estate be paid as soon as practicable after my death from my residuary estate. If at the time of my death any real property herein bequeathed is subject to a mortgage, I direct that the beneficiary receiving the mortgaged property shalt ,.:: - 1 - take it subject to the mortgage and the indebtedness secured thereby and shall not be entitled to have such indebtedness paid out of my general estate. I direct that all estate, inheritance, or other taxes assessed upon or with respect to any property or interest in property included in my estate for such tax purposes shall be paid as provided in the Trust referenced in, or created pursuant to, Article V of this Instrument. ARTICLE ifl I direct that, to the extent permitted by the Probate Code of South Carolina, my Executor, Beneficiaries and Heirs abide by any Memorandum, signed by me, designating the recipients of specific items of tangible personal property which I own at the time of my death, whether such Memorandum is executed before or after the date of this Instrument. I further direct that, if any named recipient shall not survive me, the bequest to that recipient shall be deemed to have lapsed, and the items of tangible personal property designated for such recipient shalt, unless otherwise provided in the Memorandum, become part of my remaining tangible personal property bequeathed by this Instrument. ARTICLE IV I hereby bequeath all of my tangible personal property (except currency) not otherwise bequeathed by separate Memorandum to beneficiaries who have survived me, ~ including but not limited to furniture, furnishings, collections, antiques, paintings, silverware, china, glass, books, jewelry, wearing apparel, automobiles, boats, and all insurance policies thereon, to my spouse if my said spouse survives me by thirty (30} days. ,If my said spouse does not so survive me, I bequeath all of said tangible personal property to my children who survive me, to be divided among them by my Executor in as nearly equal shares as may be practical. I request, but do not require, that my Executor give due regard to any preferences expressed by my children; the discretion of my Executor shall be exclusive and absolute, and no decision made by my Executor maybe challenged by J~ ~~ . - 2 - any beneficiary hereunder. The cost of storing and insuring any of my tangible personal property shall be an administrative expense payable from my residuary estate; costs of delivery shall be borne by the beneficiary receiving the same. ARTICLE V I bequeath the remainder of my property, real and personal, tangible and intangible, of whatever nature and wherever it may be located, whether acquired before or after the execution of this Instrument, including any specific devise or bequest established by this Instrument which lapses (referred to in total as my "residuary estate") to the then Trustee or Trustees under that certain Trust Agreement executed by me as Grantor prior to the execution of this Instrument and dated the 15~' day of April, 1997. The Trustee or Trustees shall add the property bequeathed and devised by this Article to the corpus of the above described Trust and shall hold, administer and distribute said property in accordance with the provisions of the said Trust Agreement, including all amendments thereto. In the event that, for any reason, the bequest and devise under this Article is ineffective and invalid, then I bequeath the same to my eldest son, LEaNARD C. BELLANCA as Trustee, to be held, administered and distributed in accordance with the provisions of the above described Trust Agreement, which provisions are incorporated by this reference and made a part of this Instrument to the same extent as if set forth in their entirety in this Instrument. ff for any reason such person or entity is unable or unwilling to serve as Trustee, l hereby nominate, constitute and appoint as successor or substitute Trustee that person or entity which is next designated in ARTICLE XII of the above referenced Trust Agreement that is willing and able to so serve; if there be none, then I appoint that trust company, financial institution possessing a trust department or trust company subsidiary of a securities brokerage company designated in a written instrument filed with the court having jurisdiction over this Will and signed by my spouse, or, if my spouse fails to act in a timely manner, signed by or on behalf of my oldest living child, or ~°~ - 3 - if he or she fails to act in a timely manner, by the court having jurisdiction of the probate of my estate. I hereby refrain from exercising any power of appointment that I may have had at the time of my death. ARTICLE VI I hereby nominate my eldest son, LEONARD C. BELLANICA as Executor of this my Will. If for any reason such nominee is unable or unwilling to serve or to continue to serve in such capacity, I nominate my son, JAMES A. BELLAN~A as alternate or successor Executor. I direct that no person nominated as Executor hereunder shall be required to post any bond or other security for the faithful performance of such duties. My Executor shall receive reimbursement of all expenses reasonably incurred to undertake the duties of Executor. My Executor is specifically authorized and empowered to exercise all of the powers in the management of my Estate which any individual could exercise in the management of similar property owned in his own right, upon such teens and conditions as to my Executor may deem best, and to execute and deliver any and all instruments and to do all acts which my Executor may deem proper or necessary to carry out the purposes of this my Will, without the necessity of a court order. My Executor is specifically authorized to sell real property and personal property, regardless of value, without court approval whenever the Executor, in his or her sole discretion, determines that such sale will facilitate distribution of the estate, prevent loss of value, or otherwise be in the best interests of the beneficiaries. IN WITNESS WHEREOF, I, LEONARD BELLANCA, sign my name to this Instrument consisting of 5 typewritten pages (the following page included) this 15"' day of April, 1997, and being first duly sworn, do hereby declare to the undersigined authority that 4 ~,~ I sign this Instrument as my Last Wili and Testament and that I sign it willingly, that I execute it as my free and voluntary act for the purposes therein expressed, and that I am eighteen years of age or older, of sound mind, and under no constraint or undue influence. ~` ~~ _ i~' Leonard Bellanca, Testator We, PETER L. WOLF and NICHELLE L. CAMPBELL, the witnesses, sign our names to this Instrument and at least one of us, being first duly sworn, does hereby declare, generally and to the undersigned authority, that the above Testator signed and executed this Instrument as the Last Will and Testament of said Testator, and that said Testator signed it willingly, and that each of us, in the presence and hearing of the Testator, hereby signs this Will as witness to the execution hereof by the Testator, and that to the best of our knowledge the Testator is eighteen years of age or older, of sound mind, and under/~o constraint or undue influence. residing at Hilton Head Island, South Carolina. ding at Bluffton, South Carolina. (Witness) STATE OF SOUTH CAROLINA ) ACKNOWLEDGMENT COUNTY OF BEAUFORT ) Subscribed, sworn to and acknowledged before me by LEONARD BELLANCA, the Testator, and subscribed and sworn to before me by NICHELLE L. CAMPBEL , a wit ass, this 15T" day of April, 1997. d~ (SEAL) Notary Public for So Carolina . / U G~.-/ My Commiss-on Expires: C~data\W POJ~TAW ETERIBALLANCALW I LLHEwpd - 5 - - _ - STATE OF SOUTH CAROLINA } COUNTY OF BEAUFORT ) REVOCABLE TRUST AGREEMENT THIS "CRUST AGREEMENT, made and entered into April 15, 1997, by and between LEONARD BELLANCA (hereafter referred to as the "Grantor"), and LEONARD BELLANCA and LEONARD C. BELLANCA (hereafter referred to as the "Initial Co- Trustees"), sets forth the terms and trusts upon which property received by the Trust for the purpose of .this Agreement is to be held. NAME OF TRUST This Trust shall hereafter be referred to as the "Leonard Bellanca Revocable Trust dated April 15, 1997." WITNESSETH: THE GRANTOR HEREBY DECLARES that the Grantor is married to MARY G. BELLANCA, who is hereafter referred to as the "Grantor's spouse." THE GRANTOR HEREBY DECLARES that LEONARD C. BELLANCA, of Mechanicsburg, Pennsylvania, JAMES A. BELLANCA, of Winnetka, Illinois, JOSEPH J. BELLANCA, of Malvern, Pennsylvania, PAUL M. BELLANCA, of H!anolulu, Hawaii, and MARY ANN SLATTERY, of Midliothian, Virginia, are children of the Grantor and, together with any children hereafter adopted by the Grantor, are liereaftier referred to as the "Grantor's children." Any person not included in the definition of "Grantor's children" in the preceding sentence has been intentionally omitted and neither such person, nor any issue thereof, shall be entitled to share in any bequest or privilege granted to any or alt of the Grantor's children, or their issue, pursuant to the terms of this Agreement. All funds and other properties hereafter delivered, transferred, conveyed or bequeathed to this Trust, or to any person or entity as the Trustee hereof, at any time or from time to time, by the Grantor or by any other person or entity (hereafter referred to, in total, as the "Trust Estate"), are to be held by the Trustee, IN TRUST, and are to be invested, reinvested, administered and distributed upon the terms and conditions set forth below: ARTICLE I A. The Grantor, while serving as Initial Trustee or Co-Trustee, may manage, invest, and distribute income and principal however the Grantor so desires. Whenever any - _ _ _ _ ___ other person or entity is serving as Trustee, the Trustee shall be obligated to distribute all net income to the Grantor in convenient installments not less frequently than quarter-annually. Unless the Grantor has been determined to be incompetent pursuant to the provisions of ARTICLE XVIII hereafter, and so remains, the Trustee shall also be obligated to distribute to the Grantor such principal of the Trust Estate as the Grantor requests in writing from time to time; provided, however, such request(s) may not be made by any representative, agent, conservator, or attorney-in fact of the Grantor. B. Notwithstanding the foregoing, whenever the Trustee determines, in the Trustee's sole judgment, that because of any physical or mental illness or disability the Grantor is not fully capable of managing financial matters, the Trustee may apply income for the benefit of the Grantor, distributing only the balance to the Grantor. In addition, the Trustee shall then also apply such sums from the principal of the Trust Estate as the Trustee reasonably determines are reasonable and appropriate from time to time to provide the medical care and standard of living to Grantor set forth hereafter in ARTICLE VII, taking into consideration any other resources readily available to the Grantor which are known to the Trustee. Wherever used in this - 2 - Paragraph "B", the term "Trustee" shall also include any Co-Trustee serving with the Grantor. C. Upon the death of the Grantor, the Trustee shall take whatever action is necessary to collect the proceeds of any insurance policies on the Grantor's life which are in the Trust Estate. In order to facilitate prompt collection of such sums, the Trustee shall furnish the necessary proof of death to the respective insurance companies and is authorized and empowered to do any and al! things that in the Trustee's discretion are necessary to collect such proceeds, including, but hot limited to, the power to execute and deliver releases, receipts, and all other necessary papers. No insurance company which has issued a policy of insurance owned by this Trust shall be required to inquire into the terms of this Trust Agreement, nor to see that the policy proceeds are in fact applied or disposed of in accordance with the terms of this Trust. The receipt of the Trustee issued to any insurance company with respect to any policy shall be a complete release of such company from liability with respect to such policy and shall be binding upon all persons interested in the Trust. The Trustee is authorized to institute legal proceedings to collect the proceeds of the policies, provided that the Trustee may require, before instituting such proceedings, that the expenses, including legal fees, which such Trustee reasonably expects to incur in such action be advanced or guaranteed to the Trustee. The Trustee is also authorized to compromise and settle any claims arising in connection with the policies on any terms such Trustee considers satisfactory and the Trustee's decision sha{I be binding upon all persons interested in the Trust. The Trustee shall not be liable for any failure to collect the entire proceeds of any policy provided the Trustee has made a good faith and diligent attempt to do so. - 3 - ARTICLE II A. Unless the Grantor has been determined to be incompetent pursuant to the provisions of ARTICLE XVIII hereafter, and so remains, the Grantor may, by a written instrument duly executed and witnessed during the Grantor's life: 1. Add property to, or remove property from, this Trust; and 2. amend this Trust Agreement to change the beneficiaries, their respective shares, the-plan of distribution, or any other-provision; and 3. revoke this Trust in its entirety or any provision hereof, and add or substitute additional provisions hereto. B. The right to amend or revoke this Trust shall be personal to the Grantor, and may not be exercised by any representative, agent, conservator, ar attorney-in-fact. No change which increases the duties or changes the compensation of any corporate Trustee shall be effective without the consent of the Trustee. ARTICLE III Upon the death of the Grantor, the Trustee shall pay the Grantor's funeral expenses, the reasonable expenses of any administration of the Grantor's estate, and any Federal or State estate, inheritance, succession, death or similar taxes payable by reason of the Grantor's death, together with any interest thereon or other addition thereto, without reimbursement from any benei'iciary. Written statements by the Executor of such sums due and payable by the estate shall be sufficient evidence of their amount and propriety for the protection of the Trustee. All payments made by the Trustee hereunder shalt be - 4 - made first from the Grantor's Residuary Trust Estate, as an expense of administration, without apportionment, except that any Federal or State estate, inheritance, succession, death or similar taxes payable pursuant to this Article III, and any interest thereon or addition thereto, shall be paid first from Trust "A". ARTICLE IV A. Upon the death of the Grantor, the Trustee shall, after making any distributions pursuant to ARTICLE III hereof, distribute the following specific bequests (any ____ __ _ - - bequest to a Beneficiary who does not survive the Grantor ~s hereafter provided shall lapse and become part of the Grantor's Residuary Trust Estate}: 1. To the beneficiaries named in any Memorandum signed by the Grantor, designating recipients of specific items of tangibhe personal property, whether such Memorandum was executed before or after the date of this Instrument, any items of tangible personal property designated therein which are owned by the Trust, notwithstanding any other provision of this Instrument. The provisions of such Memorandum. shall be deemed to supersede any conflicting provisions of this Instrument, and shall be binding upon all of the beneficiaries of this Trust. If the sucbessor Trustee acting upon the death of the Grantor does not receive, or is otherwise not in possession of, the original Memorandum within sixty (60) days after the date of death of the Grantor, the Trustee may distribute tl~e tangible personal property pursuant to the terms of this Instrument, without further liability or obligation with respect thereto. 2. If the Grantor's spouse survives the Grantor by thirty (30) days, to Trust "A" a sum equal to the dollar amount, if any, which can pass free of federal - 5 - estate tax by reason of the unified credit and the state death tax credit allowable to the Grantor's estate (the "credit shelter amount"), reduced by the aggregate of (i) all items includible in such estate for federal estate tax purposes which either are disposed of in previous Articles of this Agreement or by the Will of the Grantor or which pass outside of either Instrument, but only if such items do not qualify for the federa! estate tax marital deduction or the federal estate tax charitable deduction, and (ii) the amount of any administration expenses claimed as income tax rather than estate tax deductions. For the purpose of computing the sum passirig to the Trustee, the values of assets as finally determined for federal' estate tax purposes shall be used. The Trustee then serving as Trustee under this Instrument shall likewise serve as Trustee of Trust "A" unless otherwise provided hereafter. 3. If the Grantor's spouse does not survive the Grantor, then to each of the following who is living, or in existence if an entity, on the date of death of the Grantor: NE B. Upon the death of the Grantor, the Trustee shall, after making any .distributions pursuant to ARTICLE III and pursuant to Paragraph "A" of this ARTICLE IV, distribute the remaining assets of the Trust, including undistributed income (herein referred to as the "Residuary Trust Estate"), as follows: 1. If the Grantor's spouse survives the Grantor ~by thirty (30) days, to the Grantor's spouse, free of trust; provided, however, if upon the death of the Grantor there shall exist a Trust of which the Grantor's spouse is the Grantor and a current income beneficiary, then this bequest shall be distributed to such Trust, subject to all of the terms and provisions thereof. - 6 2. If the Grantor's spouse does not survive the Grantor by thirty (30) days, to the Beneficiaries, and as provided, in Paragraph "F" of ARTICLE V hereof, subject to the provisions of Paragraph "G" of said ARTICLE V. ARTICLE V Trust "A" shall be held, administered and distributed as follows: A. The Trustee shall pay to or apply for the benefit of the Grantor's spouse, for such -__ _- -_ spouse's lifetime, all of the net income from Trust "A", in convenienf nstallrnents but no less frequently than quarter-annually. Further, the Grantor's spouse shall be entitled to use any tangible personal property, and to live in any real property, owned by the Trust for as long as the Grantors spouse may desire to do so, without charge and without liability except for gross negligence or intentional damage. To determine "net income", there shall be deducted from the gross income, in addition to other ordinary Trust expenses, all expenses of ownership and use applicable to such real property. B. In addition, the Trustee shall also make payments of principal to the Grantor's spouse, or expend the same for the benefit of such spouse, in such amounts and at such times as the Trustee determines are reasonable and necessary to provide to the Grantor's spouse: (1) full, high quality medical care including, whenever reasonable and to the extent reasonably needed, private nurses and private care, and (2) maintenance and support in reasonable comfort. C. With respect to Paragraph "B" of this Article V, the Trustee .shall give primary consideration to the needs (including, but not limited to, such financial obligations as debt repayment and income tax liability) and best interests of the Grantor's - 7 - spouse. Notwithstanding the foregoing, in making such determinations the Trustee shall take into account any other income and assets of the Grantor's spouse known to the Trustee. Notwithstanding Paragraph "B" of this Article V, with respect to any distribution of principal for the medical care of the Grantor's spouse, the Trustee is strictly prohibited from making any payments: (a) for medical car the cost of which is payable by any govemmental entity or pursuant to any governmental program of reimbursement or payment, or (b) in reimbursement to any government entity which may have incurred expense for the benefit of the Grantor's spouse pursuant to any governmental program of reimbursement or payment for medical care. _. __ __ _ _ __ __ D. The Grantor's spouse may at any time, by written notice, require the Trustee to make any nonproductive property of this Trust reasonably productive within a reasonable time. E. Upon the death of the Grantor's spouse, any undistributed income of the Trust shall be distributed to any Revocable Trust, existing on the date of death of the Grantor's spouse, of which such spouse was the Grantor and current income beneficiary or, if there is none, then to the estate of the Grantor's spouse. F. Upon the death of the survivor of the Grantor and the Grantor's spouse, the Trustee shall divide the Residuary Trust Estate or the remaining Trust Principal, as appropriate, into equal separate shares so as to provide one (1) share for each of the Grantor's children then living and one (1) share for each of the Grantor's children then deceased who shall leave issue then living, such issue to take their deceased parent's share by representation. Such shares shall be distributed to the beneficiaries thereof except as otherwise provided herein. - 8 - G. Notwithstanding the provisions of Paragraph F of this ARTICLE V, with respect to any Trust share allocated to MARY ANN SLATTERY, the Trustee shall hold such share, IN TRUST, for the lifetime of said beneficiary, to be administered and distributed as follows: 1. All income shall be distributed to or for the benefit of the beneficiary not less frequently than quarter annually. The beneficiary mayat any time, by written notice, require the Trustee to make any nonproductive Trust property reasonably productive within a reasonable time. __ __ __ ____ __ 2. Principal of the Trust shall be distributed to or for the benefit of the beneficiary at such times, and in such amounts, as the Trustee, in such Trustee's discretion, shall determine to be reasonable and appropriate for the education, medical care, and support and maintenance in reasonable comfort of the beneficiary; provided, however, with respect to any distribution of principal for the medical care of the beneficiary, the Trustee is strictly prohibited from making any payments: (a) for medical car the cost of which is payable by any governmental entity or pursuant to any governmental program of reimbursement or payment, or (b) in reimbursement to any government entity which may have incurred expense for the benefit of the beneficiary pursuant to any governmental program of reimbursement or payment for medical care. 3. Upon the death of the beneficiary, the Trustees shall distribute the then remaining principal of the Trust share of such beneficiary, cif any remains, to his or her then living issue by representation, or if such beneficiary has died leaving no such issue, then to the Grantor's then living issue, by representation, except that the share of any child or grandchild of the - 9 - Grantor for whose benefit a trust shall then exist hereunder shall be added to such trust, to be administered and disposed of as if a part thereof from inception. ARTICLE VI In the administration of any property, real or personal,:. forming a part of this Revocable Trust, or any Trust subsequently established hereunder, the Trustee shall, in addition to and not by way of limitation of the powers provided by law, Piave the following powers, to be exercised in the Trustee's sole discretion and without approval of -any Court: 1. To retain, temporarily or permanently, any or all property received by the Trustee in the form in which it was received; to acquire by purchase, exchange or otherwise and retain, temporarily or permanently, any kind of realty or personalty, wherever located; to invest and reinvest in stocks (common or preferred) and bonds, without being limited to investments authorized by law, and in investment companies and mutual funds, ready asset funds, and legal and discretionary common trust funds {including investment companies and common trust funds maintained by any corporate Trustee or any affiliate thereof without the necessity of notice to beneficiaries); and to deposit funds in one or more savings or other banks (including any corporate Trustee or any affiliate thereof without the necessity of notice to beneficiaries) in any form of interest-bearing account or deposit; 2. To sell, exchange or otherwise dispose of real property and personalty, publicly or privately, for any purpose (including the distribution or division of the asset, reduction of carrying costs of the Trust, securing cash needed for other Trust purposes, or to protect against loss of value thereof), wholly or partly on credit and for any consideration deemed reasonable and appropriate by the Trustee; - 10 - 3. To vote (if a corporation, through officers, employees or agents of the Trustee), in person or by general, limited or discretionary proxy, in connection with any stocks or other securities constituting assets of any Trust hereunder; 4. To manage real property in such manner as the Trustee shall deem best, with authority - to lease the same or grant easements with respect thereto, to erect, alter, repair or demolish buildings, to adjust boundaries, to dedicate streets or other ways for public use without compensation, to improve, repair, subdivide and vacate any of said property, to impose such easements, restrictions, conditions, _. ___ ___ - _-- stipulations and covenants as the Trustee may see fit, to insure the property-(and improvements thereon and contents thereof) with casualty, liability and other insurance in such amounts as the Trustee deems reasonable, to retain persons to inspect, treat, clean, and maintain the property and any improvements thereon without liability for any neglect, omission, misconduct, or default of any such person provided the same was selected and retained with reasonable care, and to pay all expenses related to the use and/or ownership of such property. Upon request of the Grantor, or, if the Grantor is deceased or has been determined to be incompetent pursuant to the provisions of ARTICLE XVIII hereafter and so remains, then upon the request of the Grantor's spouse (unless such spouse has likewise been determined to be incompetent and so remains), the Trustee shall sell any property which constitutes the personal residence of the Grantor or, upon the Grantor's death or residence in a nursing facility, of the Grantor's spouse, and purchase such substitute therefor of comparable or lower price, or lease such substitute therefor, as is likewise requested; 5. To determine, in the Trustee's sole discretion, what shall be.fairly and equitably charged or credited to income and what to principal, and in making that. determination to employ an accountant or attorney-in-law and to rely upon the opinion thereof; - 11 - 6. To make any payment or distribution directly to any beneficiary or to apply the same for such beneficiary's benefit; 7. To distribute principal and income in kind or in money, or partly in each, or by way of undivided interests; 8. To renew, assign, alter, extend, compromise, release, with or without consideration, or submit to arbitration, obligations or claims, including taxes, held by or asserted against the Trust or which affect Trust assets; 9. If a corporation, to hold property in the Trustee's own name or in the name of nominees, or with respect to stock certificates to hold the same in the form of street certificates; 10. To borrow money, from the Trustee if a corporation, or from others, and pledge or mortgage any property, for the payment of estate taxes, debts, legacies or expenses, or for any purpose which the Trustee deems reasonable and appropriate to facilitate the administration of the Trust or to avoid the untimely sale of Trust assets; 11. To abandon, in any way, property which the Trustee determines is not worth protecting; 12. To collect, receive and receipt for rents, issues, profits, and income of the Trust Estate; to retain such reserves for trust expenses and liabilities as the Trustee deems reasonable and appropriate; 13. To insure the assets of the Trust Estate, including insurance against any damage or loss that may occur during delivery to beneficiaries; - 12 - 14. To employ and compensate agents, accountants, investment advisors, brokers, attorneys, tax specialists, realtors, and other advisors deemed by the Trustee needful for the proper administration of the Trust Estate, and to do so without liability for any neglect, omission, misconduct, or default of any such agent or professional representative provided the same was selected and retained with reasonable care; 15. To hold and retain the principal of the Trust Estate undivided until actual division shall become necessary in order to make distribution; to hold, manage, invest and __ __ __ ___ - _ _ _ . -- account for the several shares or parts thereof by appropriate entries on the Trustee's books of account; and to allocate to each share or part of share its proportionate part of all receipts and expenses; provided, however, the carrying of several trusts as one shall not defer the vesting in title or in possession of any share or part of any share thereof; 16. To continue to hold any stock, memberships, securities, notes or obligations of any closely held corporation or limited liability company which Grantor may own in whole or in part, and to cooperate fully in the management and operation of said corporation or limited liability company; to sell, collect, or otherwise liquidate such stock, memberships, securities, notes or obligations if deemed advisable, for such amounts and upon such terms as the Trustee deems reasonable and appropriate; 17. To sell Trust assets to the current income beneficiary upon such terms as the Trustee deems reasonable and appropriate; 18. In the event that Co-Trustees shall be serving hereunder, all decisions shall be made with the unanimous approval of the Co-Trustees; provided, however, whenever the Grantor is serving as Co-Trustee, either Co-Trustee may act alone; provided further, however, if the Grantor's spouse is serving as Co-Trustee of Trust - 13 - "A", any discretion to be exercised by the Co-Trustees of Trust "A" shall be exercised solely by the remaining Co-Trustee. The provisions of this Paragraph shall not limit the right of any Co-Trustee to authorize another Co-Trustee to execute documents on his or her behalf pursuant to a Power of Attorney. 19. In the Trustee's discretion, to make gifts on behalf of the Grantor to the Grantor's children, grandchildren, or to any charity or church, giving due consideration to the financial needs of the Grantor and the recipient known to the Trustee and further limited as to each gift to the amount of the Federal Gift Tax Exclusion for such year. __ ............._...._._ . __ _ _ __ 20. In general, to exercise all powers in the management of the Trust Estate of this Revocable Trust or any Trust subsequently established hereunder which any individual could or would exercise in his own right, in the reasonable and prudent management of his own property, upon such terms and conditions as the Trustee may deem best, and to do all acts, and execute all documents, which the Trustee may deem necessary or proper to carry out the purposes of this Trust Agreement. ARTICLE VII Any Trustee of this Revocable Trust (except the Grantor), in distributing principal, exercising discretion, determining reasonableness and need, deciding whether or not to exercise authority granted herein, or considering investment of Trust assets, shall be obligated to give primary consideration to the needs and best interests of the Grantor, including the providing of full, high quality medical care including, whenever reasonable and to the extent reasonably needed, private nurses and private care sufficient to provide the Grantor with peace of mind and adequate personal attention .and, to the extent possible, taking into consideration the total assets of the Trust and the health and life - 14 - expectancy of the Grantor, to the providing of support in reasonable comfort, that is, a standard of living comparable to that enjoyed by the Grantor on the date hereof. ARTICLE VIII In no case shall any person dealing with a Trustee of this Revocable Trust or of any Trust created pursuant to this Instrument, in relation to any part of the Trust Estate, be obliged to see to the application of any money or other property paid or delivered to the Trustee thereof, or be obliged to see that the terms of any such Trust have __ - -- been complied with. No such person shall be required, and no person not a beneficiary or not acting for a beneficiary shall be entitled, to inquire into the necessity or expediency of any act of a Trustee. The performance by the Trustee then serving of any act, or the execution by any such Trustee of any instrument, in relation to the Trust Estate of such Trust shall be conclusive evidence in favor of any person dealing with such Trustee that the Trustee had the power and authority to perform such act or to execute such instrument. A written statement of a Trustee at any time as to any fact relative to the Trust may also be relied upon and shall also be conclusive evidence in favor of eny transfer agent and any other person dealing in good faith with the Trustee in reliance upon such statement. ARTICLE IX The rights, powers, authority, duties and obligations established by this Instrument shall apply to the Initial Trustee and to all successor Trustees. No bond shall be required of any Trustee for the faithful performance of the duties hereunder. Any successor to the trust business of any corporate fiduciary designated herein or acting hereunder shall succeed to the capacity of its predecessor without conveyance or transfer. Any Trustee serving hereunder shall be entitled to reimbursement of expenses reasonably incurred and reasonable compensation for services rendered (if a corporation, in - 15 - accordance with its standard fee schedule in effect at the time that such services are rendered or, if none, then the compensation shall be as provided by South Carolina law). No Trustee shall be responsible or liable for the actions or accounts of any previous Trustee, or of the Executor of the Grantor's estate. Unless requested in writing by a beneficiary, no Trustee shall be obligated to inquire into such acts or omissions or to ascertain that the property transferred to such Trustee is the entire trust property. No Trustee shall be liable for the exercise of any powers or discretion unless such exercise shall be made in bad faith or shall constitute gross negligence, unless otherwise specifically provided herein. __ __ ARTICLE X No interest in principal or income payable, or to become payable, to any beneficiary of any Trust created by this Instrument shall be subject to anticipation, assignment, pledge, sale or transfer in any manner. No beneficiary shat{ have the power to anticipate or encumber-such interest. No such interest, while in the possession of the Trustee, shalt be liable for, or subject to, the debts, contracts, obligations, liabilities or torts of any beneficiary. ARTICLE XI All questions pertaining to the validity, construction or administration of any Trust created by this Instrument shall be determined in accordance with the laws of the State of South Carolina. - 16 - ~. ARTICLE XII A. Any Trustee may resign at any time by executing a Resignation Declaration in form recordable in the Office of the RMC for Beaufort County,. South Carolina, and immediately delivering the original executed document to the current income beneficiary (or, if the Trustee is the Grantor, then to the Successor Trustee), or to the legal guardian or attorney-in-fact thereof. The Grantor and any individual Trustee or Co-Trustee may resign immediately; the resignation of any Corporate Trustee or Co-Trustee shall become effective on the thirtieth (30th) day following __ __ __ the date of execution of the Resignation Declaration unless otherwise approved by the can-ent income beneficiary. The Resignation Declaration shall clearly identify and reference this Trust Agreement, shall clearly identify the resigning Trustee, and, in the case of the Grantor or an individual Trustee or Co~Trustee, set forth the effective date of the resignation. The execution and delivery of the Resignation Declaration may be undertaken by an Attorney-in-Fact of a resigning Trustee, and any such execution and delivery of documents shall be binding upon the resigning Trustee (subject to Paragraph E of this Article as to the Grantor). Any resigning Trustee shall be obligated to use best efforts to facilitate the transfer of assets and Trust records and shall promptly prepare and deliver a final accounting. B. At such time as the Grantor shall resign as Trustee, or die or sooner be determined to be incompetent pursuant to the provisions of ARTICLE XVIII hereafter, LEONARD C. BELLANCA shall commence serving as sore Trustee hereunder. LEONARD C. BELLANCA shall be unable or unwilling to serve or to continue to serve in such capacity, the following shall serve as Successior thereto, as long as they are willing and able to do so, in the order of succession .designated, it being the intention of the Grantor to fill vacancies as they arise: first -JAMES A. BELLANCA; second -JOSEPH J. BELLANCA; third - PAUL M. BELLANCA. - 17 - C. If all of the foregoing Trustees and/or Co-Trustees shall be unwilling or unable to serve or continue to serve in such capacity, the Grantor, or if the Grantor is deceased or incompetent as aforesaid, then the Grantor's spouse or, if such spouse is deceased or incompetent as aforesaid then the eldest child of the Grantor then living and competent, shall promptly appoint a successor Trustee which is a trust company or a financial institution possessing a trust department or a trust company subsidiary of a securities brokerage company (except that the Grantor may appoint any person or entity whomsoever). _. ___ ____ _____ _. __ D. A Successor Trustee shall, prior to commencing service as a Successor Trustee, execute a Confirmation of Successor Trustee and record the same in the Office of the RMC for Beaufort County, South Carolina, to which shall be attached the Resignation Declaration of the preceding Trustee. Such Confirmation of Successor Trustee shall contain an accurate identification of the Trustee, the Trustee's address, telephone number and fax number as applicable, and the date upon which the Successor Trustee shall commence serving in such capacity; the Instrument shall also clearly identify and reference this Trust Agreement and shall include an acceptance by the Trustee of the obligations established hereunder. E. If the Grantor has ceased to serve as Trustee but is still living, the Grantor may thereafter commence re-serving as Trustee by delivering written notice of termination to the current Trustee, which notice shall clearly identify and reference this Trust Agreement and the effective date that the Grantor shall recommence serving as Trustee, and also recording the same in the Office of the RMC for Beaufort County, South Carolina. If the Grantor was determined 'to be incompetent pursuant to the provisions of ARTICLE XVIII hereafter, the Grantor must first be determined to be competent in the same manner, in which event the notice must also be executed by two physicians who, by their execution, are approving the action undertaken by the Grantor pursuant to such notice. The notice must be - 18 - r i signed by the Grantor, and may not be executed by any representative, agent, conservator, or Attorney-in-Fact of the Grantor. ARTICLE XIII Notwithstanding the provisions of ARTICLE XII, the current income beneficiary (or a majority thereof if more than one) of any Trust created hereunder, personally or, if a minor or under disability, by attorney-in-fact, shall have the absolute right at any time to discharge any Trustee or Co-Trustee of such Trust, without cause, __ __ __ _---- __ provided that such current income beneficiary (or a majority thereof if more than one) promptly appoints as successor Trustee the next succeeding Trustee or Co-Trustee designated by the Grantor in ARTICLE XII hereof or, if there be none, then a trust company or a financial institution possessing a trust departmer>t or a trust company subsidiary of a securities brokerage company. However, the Grantor may appoint any person or entity whomever to serve as successor Trustee. The income beneficiary (or majority thereof if more than one) shall deliver to the current Trustee written notice of Termination, which notice shall clearly identify and reference this Trust Agreement, clearly identify the terminated Trustee, and set forth the effective date of the termination. The Successor Trustee shall execute and record with the RMC for Beaufort County, South Carolina, a Confirmation of Successor Trustee, to which there shall'be attached a copy of the notice delivered to the terminated Trustee or Co-Trustee. The current Trustee shall be obligated to use best efforts to facilitate the transfer of assets and Trust records and shall promptly prepare and deliver a final accounting. The current income beneficiary shall be obligated to promptly notify the next succeeding beneficiary of income or principal as to the name and address of the new Trustee. - 19 - ARTICLE XIV With respect to any tangible personal property owned by the Trust, the Grantor's spouse shall be entitled to possession thereof for as long as such spouse desires, and during such possession (a) the Grantor's spouse shall'be responsible for the care, maintenance, and repair of such property, and all experyses applicable to the ownership or use thereof, (b) the Grantor's spouse shall have no liability with respect to such property except for intentional damage or destruction or conveyance, with or without consideration, to any person other than the Trustee hereof, and (c)~the Trustee shall _-__- _.. __ __ possess no liability whatsoever with respect to such property. When such property is returned to the custody of the Trustee the Trustee shall distribute the same by dividing such properly in as nearly equal shares a may be practical so as to provide one share for each child of the Grantor then living and one share for each child of the Grantor who, being deceased, has IefC children then living, such children to be allocated their deceased parent's share in as nearly equal shares as may be practical. The Trustee shall give due consideration to any preferences expressed by the Grantor's children and grandchildren to the extent reasonably possible; the discretion exercised by the Trustee in connection therewith shall be exclusive and absolute, and no decision made by the Trustee may be challenged by any beneficiary hereunder. As to any beneficiary under the age of 21 years, the Trustee may, in the Trustee's sole discretion, sell the property allocable to such beneficiary (including to other beneficiaries) and distribute the sale proceeds to the beneficiary in lieu thereof. ARTICLE XV The Grantor's spouse is specifically authorized to disclaim all, or any part, of any bequest made to said spouse by delivery of a written Instrument setting forth such disclaimer in such manner as is necessary to qualify the same as a "qualified disclaimer" - 20 - under Section 2518 of the Internal Revenue Code of 1986, as amended, or any successor to such Section; in such event, the assets so disclaimed shall be distributed as if the Grantor's spouse did not survive the Grantor and said spouse shall possess no right to restrict, influence or place any condition upon such distribution. ARTICLE XVI Whenever the word "Trustee", or any modifying or substitute pronoun thereof, is used in this Instrument, such word or pronoun shall (1) refer to the person or __ _. __ _- entity then properly serving, or authorized fo serve, in such fiduciaryv capacity-pursuant to the provisions of this Agreement, (2) be held and taken to include both the singular and plural, and the masculine, feminine, and neuter gender thereof, as appropriate, and (3) apply equally to any Trustee(s) herein named, to any Trustee(s) hereafter designated as permitted by this Agreement, and to any successor thereof. ARTICLE XVII If any share hereunder shall vest in absolute ownership in a beneficiary who has not then attained the age of twenty-one (21) years, the Trustee is authorized and empowered, in the Trustee's uncontrolled discretion, to hold the share so vested in such person, or any part thereof, in a separate Trust for the benefit of such person, notwithstanding that such share may consist of investments not authorized by law for trust funds. During the term of such Trust, the Trustee shall apply ail or such part of the income, and principal as necessary, as the Trustee shall determine to be reasonably needed for the support, maintenance, medical care, and education of such beneficiary, taking into account to the extent the Trustee deems appropriate the resources of the beneficiary's parent(s). Any undistributed income shall be accumulated. At such time as the beneficiary shall attain the age of twenty-one (21) years, or sooner die, the Trustee - 21 - shall pay over the principal and any accumulated income thereof to the beneficiary or to his or her estate, as applicable. The authority conferred upon the Trustee by this ARTICLE XVII shall be construed as a power only, and shall not operate to suspend the absolute vesting of ownership in such beneficiary. With respect to the administration of such Trust, the Trustee shall have all of the powers vested in the Trustee, and all of the obligations established with respect to a Trust beneficiary, under the provisions of this Agreement. If pursuant to any Trust created hereunder, income or principal shall become distributable to a person under the age of 21 years, or to a person under legal disability, or to a person not adjudicated incompetent but who, by reason of illness or mental or __ _ __ __ _ __ physical disability, may, in the opinion of the Trustee, be unable properly to administer such amounts, then the same, or any portion thereof, may, in the discretion of the Trustee, be applied for the benefit of the beneficiary and/or all, or the remaining portion thereof, shall be distributed by the Trustee in one or more of the following ways, as the Trustee deems best: (1) Directly to such beneficiary; or (2} To the parent(s) or legally appointed guardian of such beneficiary. ARTICLE XVIII In the event that the Grantor is determined to be incompetent, the Grantor shall cease to serve as Trustee under this Agreement. If two physicians, one of which is the regular physician of the Grantor, declare in writing that the Grantor is unable to undertake most financial affairs (investments, gifts, purchases, sales, payment of bills, incurring of expenses, etc.) in a competent manner, or is unable to protect financial assets to meet future needs, the Grantor shall be deemed to have been determined to be incompetent for the purposes of this Agreement. The term "regular physician of the - 22 - Grantor" shall refer to any physician who has treated the Grantor, and/or examined the Grantor's health, at least three (3) times during a period of time which begins no more than two (2) years before the determination of incompetency and, in addition, has examined the Grantor's mental and/or physical health, as appropriate (or secured competent examination thereof), within thirty (30) days prior to such determination of incompetency. Notwithstanding the foregoing, any judicial determination of incompetency, or of competency, shall supersede any determination hereunder made within one (1) year before or after such judicial determination. The foregoing provisions shall likewise apply to any individual who is serving, or is to serve, as Trustee or Co-Trustee~hereunder, if any. __ __ __ __ ___ ARTICLE XIX Every Trustee (except the Initial Trustee) shall maintain accurate accounts and records and shall prepare an account of the administration of the Tnast not less frequently than annually and render the account to each person entitled to receive Trust income during the period of the account and each person who would be entitled to distribution of principal if the Trust had terminated on such date. Such statement shall set forth a complete inventory of the property then constituting the Trust Estate and shall reflect all receipts and disbursements of income and principal of the Trust Estate. The assent by all persons so entitled to receive the account shall make such account, in the absence of fraud or manifest error, binding and conclusive upon all persons then having, or who may thereafter have, any interest, vested or contingent, in the income or principal of the Trust Estate. The failure of any such person (1) personally or (2) by his or her attorney-in-fact, or (3) if a minor by his or her parent or legal guardian, or (4) if under disability by his or her legal guardian or conservator, or (5) if deceased by his or her personal representative, to mail a written objection to any such account within sixty (60) days after receipt thereof shall be deemed to be an assent by such person. - 23 - ARTICLE XX Notwithstanding any other provision hereof, in the event any Trust held hereunder shall, in the opinion of the Trustee, become uneconomic or otherwise inadvisable to administer as a Trust, the Trustee, in the Trustee's absolute discretion, is authorized to terminate such Trust and distribute the remaining. principal to or for the benefit of the beneficiaries then entitled or eligible to receive the income and in the same proportion. In such event, no remainder beneficiary shall possess any claim against the income beneficiary or the Trustee. ARTICLE XXI Notwithstanding anything set forth in this Instnament to the contrary, all Trusts created hereunder shall terminate no later than twenty-one (21) years after the death of the last survivor of the Grantor's spouse, children and grandchildren living on the date of the Grantor's death, at which time the Trustee shall distribute the remaining principal to or for the benefit of the beneficiaries then entitled or eligible to receive the income therefrom. ARTICLE XXII In the event that it cannot be readily determined whether or not a beneficiary named hereunder has survived the Grantor, it shall be presumed that the beneficiary did not survive the Grantor for purposes of this Agreement. ARTICLE XXIII Notwithstanding anything else to the contrary hereinabove, the Grantor's spouse may not undertake any action, individually or in the capacity of Co-Trustee, which - 24 - would result in the inclusion of the assets of Trust "A" in such spouse's estate. This Article shall not limit the right of the Grantor's spouse to make any available election upon the Grantor's death. ARTICLE XXIV It is the intention of the Grantor (1) that this Instrument not be deemed to be, or treated as, the Last Will and Testament of the Grantor, (2) that no Probate of this Instrument be required or .undertaken, and (3) that the assets, the title to which are held in the name of the Trust or in the name of the Trustee as Trustee (whether or not such title is publicly recorded), shall not be treated as assets of the Estate of the Grantor or made subject to Probate. IN WITNESS WHEREOF, the Grantor and the Inital Trustee(s) have set their hands and seals to this Trust Agreement on the date first set forth above. IN THE PRESENCE OF: ~~ v I ~ w/V~ ~/f 'Gl, ~,uL,~ ~ ,~/ i fi ,i Grantor -Leonard Bellanca ~ "` ~ Initial Co-trustee -Leonard Bellanca "~~ ~' ~~ u Initial Co-trustee -Leonard C.$ellanca - 25 - ' STATE OF SOUTH CAROLINA ) PROBATE COUNTY OF BEAUFORT ) Grantor, Initial Co-Trustee PERSONALLY appeared before me the undersigned witness who, under oath, says that (s)he saw the within named Grantor and Initial Co-Trustee, LEONARD BELLANCA, sign, seal, and as his act and deed, deliver the within Trust Agreement, and that (s)he with the other witness subscribed above witnessed the execution thereof. ~L~,Xdi (Witness) SWORN to before me this 15"' day of April, 1997. ~~ Notary Public fo outh rolin My Commission Expires: ~' ~ ~ ~~ - 26 - STATE OF ? ~~ ) PROBATE COUNTY OF ~ ~ ~~ ~~ ~~_. ) Initial Co-Trustee PERSONALLY appeared before me the undersigned ~nritness who, under oath, says that (s)he saw the within named Initial Co-Trustee, LEONARD C. BELLANCA sign, seal, and as his act and deed, deliver the within Trust Agreement, and that (s)he with the other witness subscribed above witnessed the execution thereof. (Witness) SWORN to before me this 11i~~1~~ day of 1~ ~~ . , 1997. ~.~tC~:,~.Gi~~- ~.).~~.~t: Notary Public for I '?~ii~c)1c,~tr \ 7c~ f~ My Commission Expires: (~ ~~ 1 9s Nr~t~~i:;1 ~'g.~l Wanda s. Turner. ^:ot. ~/ Put;'ic h~?_r1C? i@Slvf ~t°+~.. ~rcrk l•~' it'{';', .. ~_---- C:\data\1NPDATA1PEiERVBAILMlCA1TRUST.HE.~wpd - 27 - STATE OF SOUTH CAROLINA COUNTY OF BEAUFORT FIRST AMENDMENT ~~ REVOCABLE TRUST AGREEMENT FIRST AMENDMENT dated February 1,1999, to that certain Revocable Trust Agreement dated April 15, 1997 (hereinafter Agreement"}, by and batween LEONARD BELLANCA (hereinafter referred to as the "Grantor") and LEONARD BELLANCA and LEONARD C. BELLANCA (hereinafter referred to as the "Initial Trustee"). WITNESSETH: WHEREAS, the Grantor, pursuant to the authority established by Article II of the Agreement, intends, and-does hereby undertake, to amend the Agreement; NOW, THEREFORE, the Grantor hereby amends the Agreement as follows: Article VI of the Agreement is hereby amended by adding the following additional Section: "21. Without limiting any of the foregoing, the Trustee shall f~ave the power to invest in Partnerships and Joint Ventures, to be a General nor Limited Partner or Join# Venturer, and to comply with all of the terms and provisions of every real estate Partnership and Joint Venture Agreement which is or may become a part of the principal of any Trust herein created. With respect to any such Partnership or Joint Venture, the Trustee shall have the power: A. To sell or otherwise dispose of any property, real or personal, for such purposes, upon such terms and at such time as the Trustee may deem advisable. B. To divide or distribute any property in kind. C. To retain all or any part of the Trust property in the form of which it is received. d. To vote and exercise all rights, and execute all required consents, in respect to the Trust property. E. To maintain reasonable reserves for depreciation and amortization. F. To treat as income all distributions actually received Wvhich are derived from rent or receipts from operations, even though a pprtion of any such distribution may be regarded as a return of capital for accounting purposes. In such event, the reserves maintained fore depreciation and amortization shall not prevent the distribution as TrWSt income of the amounts described in the preceding sentence." Subject to the foregoing amendments, the Agreement remains in ful I force and effect according to its terms; provided, however, in the event that any provision of this First Amendment conflicts with any provision of the Agreement, the provision of this First Amendment shall supersede and prevail. Amendment conflicts with any provision of the Agreement, the provision of this First Amendment shall supersede and prevail. IN WITNESS WHEREOF, the Grantor has set hand and seal to this First Amendment on the date first set forth above. IN THE RESENC~ OF: i pis / ,~ / ~ ~ ~ ~ eonard Bellanca, Grantor STATE OF SOUTH CAROLINA ) COUNTY OF BEAUFORT ) ACKNOWLEDGMENT Subscribed, sworn to and acknowledged before me by LEONARD BELLANCA, th'eI) Grantor, and subscribed nd sworn to before me by SSG .~~~ ~~ , a witness, this '~~ day of fn 1999. ~ ~- (SEAL) Notary Public for South Carolina My Commission Expires: .' ~~ O~ C.IDATANKKVIINDJITAWETERIPLANpJ01MLlAN['~NfAA10. WPD Cpp~, STATE OF SOUTH CAROLINA COUNTY OF BEAUFORT SECOND AMENDMENT REVOCABLE TRUST AGREEMENT SECOND AMENDMENT dated December 1, 2004, to that certain Revocable Trust Agreement dated April 15, 1997, as amended by First Amendment dated February « ,~ 1,1999(hereinafter Agreement ), by and between LEONARD BELLANCA (hereinafter referred to as the "Grantor") and LEONARD BELLANCA and LEONARD C. BELLANCA (hereinafter referred to as the "Initial Trustees"). WITNESSETH: WHEREAS, the Grantor, pursuant to the authority established by Article II of the Agreement, intends, and. does hereby undertake, to amend the Agreement; NOW, THEREFORE, the Grantor hereby amends the Agreement as follows: Article iV, Section "A", Paragraph "3" is hereby deleted, and the.following is hereby substituted in place thereof: " 3. If the Grantor's spouse does not survive the Grantor then to MARY ANN SLATTERY, if she is then living, any interest that the Trust may possess in EMPIRE STATE BUILDING ASSOCIATES, A PARtNERSHIP, and BELLANCA FAMILY GAA PARTNERSHIP, A PARTNERISHIP." 2. Article V, Section "G" is hereby deleted, and the following is hereby substituted in place thereof: "G. Notwithstanding the provisions of Section "F" of this Article V, assets constituting any bequest to MARY ANN SLATTERY pursuant to Article V shall be sold by the Trustee, and the proceeds thereof shall be app{ied to acquire a lifetime annuity for the benefit of MARY ANN SLATTERY. The selection of the annuity, and the terms thereof, shall be at the sole discretion of the T i u5tee. in the everii thdi arty assets of such Trust shall cannot be sold within a reasonable period of time at a price that the l~rustee deems to be reasonable, the Trustee is authorized to disburse such assets directly to MARY ANN SLATTERY. If any of the assets of the share of MARY ANN SLATTERY shall consist of tangible personal property, the Trustee shall distribute to MARY ANN SLATTERY any such items that she may request." Subject to the foregoing amendments, the Agreement remains in full force and effect according to its terms; provided, however, in the event that any provision of this Second Amendment conflicts with any provision of the Agreement, the provision of this Second Amendment sha11 supersede and prevail. Page 1 of 2 IN WITNESS WHEREOF, the Grantor has set hand and seal to this Second Amendment on the date first set forth above. IN THE PRESENCE OF: f ^ ~ ~~ ~~_ fitness ~~ U Gra for -LEO A D BELLANCA Witness STATE OF SOUTH CAROLINA GOUNTY OF BEAUF~RT ACKNOWLEDGMENT Subscribed, sworn to and acknowledged before me by LEONARD BF~ LANCA, the Grantor, and subscribed and sworn to before me by Cc~C~Z ~ ~ INLSZ~ , a witness, dated December 1, 2004. I~ ~ `~ ~-~- (SEAL) Notary Public for South Carolina ~ ~! ~._ My Commission Expires: K.iPeter denblPLANNWGIBALLMICAWMD 2 HE 1115M Page 2 of 2 $175,035 Partnership Interest In Georgetown Apartment Associates SUBMITTED TO Bellanca Family GAA Partnership c/o Mr. Leonard C. Bellanca 112 Leyton Way Mechanicsburg, Pennsylvania 17055 APPRAISERS AND PLANNERS INC EDWARD LEVY, ASA (7907-2004) JAMES L. LEW, MAI, ASA RUTH A. A~NESE, MAI WILLIAM M. CAVETTE APPRAISERS AND PLANNERS INC S EAST 40TH STREET NEW YORK, NY 10016 (212) 683-1122 FAX (212) 213-6120 ASSOCIATES ELINOR BRUNSWICK, MAI LAWRENCE E. BLOOM, MAI May 20, 2009 Bellanca Family GAA Partnership c/o Mr. Leonard C. Bellanca 112 Leyton Way Mechanicsburg, Pennsylvania 17055 Re: $175,035 Partnership Interest In Georgetown Apartment Associates Gentlemen: Pursuant to your request, we have made a market value appraisal of a $175,035 partnership interest in Georgetown Apartment Associates. The following pages include details on the subject participation as well as the method we used to establish its market value. Based on these calculations, the market value of a $175,035 partnership interest, as of March 2, 2009, was: FIVE HUNDRED SEVENTY SEVEN THOUSAND ($577,000) DOLLARS Respectfully submitted, i ames L. Levy, ,ASA, MRICS State of New York Certified General Appraiser I.D. #46000005134 White Plains, New York Miami, Florida Hamden, Connecticut Scottsdale, Arizona Interest Appraised A $175,035 or 8.335% ($175,035 _ $2,100,000) in a general partnership known as Georgetown Apartment Associates which owns the leasehold position and operates a garden apartment complex consisting of 42 buildings with 641 apartments and 3,135 rooms plus a swimming pool, clubhouse, etc., which is located on Laclede Station Road, Shrewsbury, Missouri.. This is approximately 6'~ miles south of downtown St. Louis. History In 1967, a syndicate, St. Louis Georgetown Associates, was organized to acquire the apartment complex at a cost of $9,]83,107, $2,100,000 cash above four first mortgages totaling $7,083,107. All of the mortgages were fully paid between December 1, 1987 and July 1, 1990. Simultaneously with the closing of title, a net lease was made with Georgetown Apartment Associates for a period of twenty-five years through April 30, 1992. There are nine renewal options afttyenty--five years each. The first renewal option was exercised. The lease provides for annual basic rent of $786,156 which will be reduced by 50% of any reduction of the overall annual requirements for interest and amortization under any fee mortgage to which the lease is or shall be subordinated. Additional rent is payable in an amount equal to SO% of the adjusted operating income in excess of $100,000. The $100,000 exclusion shall be increased by the amount of any reduction in the annual basic rent resulting from the reduction in the mortgage requirements. Appraisal Rationale There exists no active market where this real estate participation can be purchased or sold. The price that a purchaser would pay for an interest in Georgetown Apartment Associates would likely be based on the cash distribution payable with respect to the interest. Therefore, we have determined that the value of the interest should be determined by discounting the distributions made to Georgetown Apartment Associates over the remaining term of the lease and valuing the subject interest based on its share of such distributions. In determining the Capitalization Rate, consideration was given to the following. 1. The distributions can vary dramatically depending upon the cash flow being generated from operations during a particular calendar year. Past performances aze no indication of future distributions. The nature of this cash flow is volatile and speculative. 2. The capitalization rate of the income flow reflects the elements of safety, risk, non-liquidity and sinking fund. With regard to the safe rate, this is based on yields of government and triple AAA corporate bonds. The non- liquidity factor recognizes the difficulty in selling a non-controlling interest of an investment. There is no recognized active market where this participation can be purchased or sold as is provided by the stock market. The risk element reflects the difference in investing in safer channels of the money market as apposed to real -3 APPRAISERS AND PLANNERS lNC estate where returns can vary dramatically from year to year. The sinking fund factor rate is added to the ascertained interest rate which comprises the "safe" rate plus loading charges to amortize or recapture investment over its remaining economic life„ The total of interest and recapture rates is the capitalization rate which has been applied to the net income. Derivation of Capitalization Rate To estimate a reasonable capitalization rate, we have relied upon input from a number of market sources, including rates published by the Real Estate Research Corp. ~"BERG"), market transactions, and our own experience and awareness of current money market rates. RERC conducts an active survey by polling buyers and sellers, and also monitors returns in index form. Its survey for the Apartment/Second Tier Properties/Midwest Criteria/First Quarter of 2009 has apartment buildings selling at capitalization rates of between 7.2% and 12.00%, with an average of 8.50% and St. Louis survey with an average of 7.50%. Conclusion A capitalization rate of 6.5% has been applied to the Basic Rent, as the income stream is substantially more secure and predictable than that of the Additional Rent, which can vary substantially from year to year. Therefore, a capitalization rate of 8.5% has been applied to this riskier and variable Additional Rent. However, the above referenced survey does not reflect the dramatic changes that have taken place in the marketplace since September. It has been acknowledged that the United States has been in a recession since December 2007. Unemployment is sky rocketing, the credit crisis has not only continued but is more severe, companies who have rarely reported anything but profits are now reporting losses, major companies such as General Motors, Ford and Chrysler are on the brink of bankruptcy and the global economy is similarly affected. Under these circumstances we have applied a discount of 15% to the values based on the above capitalization rates. Discount The interest is a general partnership interest in Georgetown Apartment Associates, not direct ownership of the real property itself, and is an interest of 8.335%. It is our opinion that such a partial interest is worth less than the arithmetical proportion of the value of they subject property as a whole. By definition, a minority interest is the ownership of an amount that does not enable the holder to exercise control. The lack of control feature of a minority interest makes it less attractive to investors who are not necessarily willing to pay the allocable value of the holding. The reduction of what a willing buyer would pay for an interest with no control is called minority interest discount. Another discount is also taken for lack of marketability and liquidity. This reflects, among other things, the difficulty in selling a general partnership interest in Georgetown Apartment Associates as well as the inability to sell the holding as of a particular point in time. -4- APPRAISERS AND PLANNERS INC In arriving at the appropriate discount we have taken into consideration all of the above including studies related to Restricted Stock and the Restrictions On Transfer pursuant to the operating agreements previously discussed as well as decisions of the U.S. Tax Court. Samuel J. & Ethel LeFrak v. Commissioner TCM 1993-526 (combined 30% discount for minority interest and lack of marketability), Ellie B. Williams v. Commissioner TCM 1998-59 (combined 44% discount for lack of control and lack of marketability), Estate of James Barudin, deceased, Muriel B. Clarke, Executrix, Petitioner v. Commissioner TCM 1996-39'S (combined 45% discount for minority interest and lack of marketability), McCord v. Commissioner, 120 T.C. No. 13, May 14, 2003 (combined 32% discount for minority interest and lack of marketability}, Lappo v. Commissioner, T.C. Memo 2003-258 (35.4% discount for minority interest and lack of marketability), Peracchio v. Commissioner, T.C. Memo 2003-280 (combined 29.4% discount for minority interest and lack of marketability), Estate of Woodbury G. Andrews, deceased, Woodbury H. Andrews, Executrix, Petitioner v Commissioner, T.C. Memo No. 58, 79 TC 938 (combined 65% discount for minority interest and lack of marketability), Temple v. United States, 97 A.F.T.R.2d 2006-1649 (E.D. Tex. 2006) (combined 60% discount for lack of marketability) and E/O Margot Stewart v. Commissioner, Docket No. 5520-OS (Government stipulated to a combined valuation discount of 42.5% for lack of marketability and lack of control), among others. It is our opinion that a 35% discount is appropriate for minority interest and lack of control and lack of marketability and liquidity. 5- APPRAISERS AND PLANNERS INC Georgetown Apartment Associates Issue Price $ 175,035 Interest Held 8.335% Cash Distributions Capitalized Basic Rent $ 18,004 Additional Rent 2006 $ 62,513 2007 66,680 2008 66,680 Average $ 65,291 Capitalization Rates Used: Basic Rent 6.50% Additional Rent 8.50% Indicated Pro Rata Value Based on Basic Rent $18,004 $276,985 0.065 Based on Additional Rent $65,291 $768,129 0.085 Total $1,045,114 Less: 15% to reflect current economic conditions (156,767) 888,347 Less: 35% Discount for minority interest and lack of control and lack of marketability and liquidity (310,921 Indicated Value $ 577,426 Rounded $ 577,000 6- ' APPRAISERS AND PLANNERS INC CERTIFICATION I certify that, to the best of my knowledge and belief • The statements of fact contained in this report are true and correct. • The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. • I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • The reported analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • I have not made a personal inspection of the property that is the underlying asset of Georgetown Apartment Associates. • No one provided significant real property appraisal assistance to the person signing this certification. • As of the date of this report, I have completed the continuing education program of the Appraisal Institute. l J S L. LEVY, MAI~, A, MRICS -7- APPRAISERS AND PLANNERS INC STATEMENT OF QUALIFICATIONS JAMES L. LEVY, MAI, ASA, MRICS James L. Levy is Chairman of the Board of Appraisers and Planners, Inc. a full service appraisal and real estate consulting firm based in New York City. He has been involl~ed in commercial real estate valuation for over 45 years and holds the MAI and SRA designations from the Appraisal Institute, the ASA designation from the American Society of Appraisers and the MRICS designation from the Royal Institute of Chartered Surveyors. His clients include major law and accounting firms, developers, financial institutions and municipal ggvernments among others. Over his career, he has been involved in major New York City commercial projects valued in excess of fifteen billion dollars. Mr. Levy has been involved with many arbitrations serving both as an expert and arbitrator. He recently has become a member of the American Arbitration Association (AAA} Panel of arbitrators. In addition he has been appointed by the State of New York Office of Court Administration as an individual eligible to receive appointments. He has testified in more than eight hundred (800) and fifty (50) matters in New York State Supreme Court, Federal Bankruptcy Court, United States Tax Court (Samuel J. Lefrak vs. the Internal Revenue Service), New York Civil Court and various courts in the States of Connecticut, Missouri and New Jersey. He has completed a seminar and passed the examination sponsored by the Appraisal Institute entitled Cases Studies in Partnership and Common Tenancy Valuation. In addition he has attended The Philip E. Heckerling Institute on Estate Planning's annual five dad conference since 1998 in which valuation of partnership interests is always a topic. As Chairman and Senior Member of Appraisers & Planners, Inc. Mr. Levy prepares, reviews and/or signs approximately 95% of the five hundred (500) appraisal reports that the firm produces on an annual basis. The appraisal reports primarily are of office buildings, apartment houses including rentals, cooperatives and condominiums and retail centers mostly in the Tri- State area of New York, New Jersey and Connecticut. PROFESSIONAL AFFILIATIONS American Arbitration Association (AAA) -Panel of Arbitrators American Society ofAppraisers -ASA Appraisal Institute -MAI, SRA New York State Society of Real Estate Appraisers Real Estate Board of the City of New York Royal Institute of Chartered Surveyors (MRICS) Westchester County Board of Realtors, Inc. Westchester County Society of Real Estate Appraisers, Inc. -Senior Member -8- APPRAISERS AND PLANNERS INC EDUCATION Graduate Studies (Real Estate) -New York University Bachelor of Arts (Economics) -Rollins College Appraisal Institute • Basic Principles, Methods & Techniques (Course I ) • Real Estate Appraisal Principles (Course 1 A1) • Basic Valuation Procedures (Course lA2) • Capitalization Theory & Techniques, Part 1 (Course 1 B 1) • Urban Properties (Course II) • Techniques & Mathematics of Capitalization (Course VI) Continuing Education Courses: • National Uniform Standards of Professional Appraisal Practice Update Course • Standards and Ethics for Professionals • Business Practices and Ethics • Inspection/Evaluation of Properties/Physical Condition • Co-Op Valuation for Mortgage Financing • Land Valuation and Purchase Price Decisions • Appraisal Review -Income Properties • Wall Street Securitization • The Office Building • Appraisal Practices for Litigation • Eminent Domain and Condemnation Appraisal • Attacking and Defending an Appraisal in Litigation Part I and Part II • Government Impact on Real Estate and New York City Real Estate Trends LICENSES State of New York - Real Estate Broker - Certified General Appraiser #46000005134 State of Connecticut - Certified General Appraiser #0000372 State of Georgia - Certified General Appraiser #241009 State of New 3ersey - Certified General Appraiser #01572 State of Maryland - Certified General Appraiser #27593 Commonwealth of Pennsylvania - General Appraiser #GA-001674 Commonwealth of Massachusetts - Certified General Appraiser #101740 -9- APPRAISERS AND PLANNERS INC $20,000 Participating Interest In Empire State Building Associates L.L.C. SUBMITTED TO Estate of Leonard Bellanca c/o Mr. Leonard C. Bellanca 112 Leyton Way Mechanicsburg, Pennsylvania 17055 APPRAISERS AND PLANNERS INC EDWARD LEW, ASA (1907.2004) JAMES L. LEVY, MAI, ASA RUTH A. AGNESE, MAI WILLIAM M. CAVETTE APPRAISERS AND PLANNERS INC 9 EAST 40TH STREET NEW YORK, NY 10016 (212) 683-1122 FAX (212) 213-6120 ASSOCIATES ELINOR BRUNSWICK, MAI LAWflENCE E. BLOOM, MAI May 20, 2009 Estate of Leonard Bellanca c/o Mr. Leonard C. Bellanca 112 Leyton Way Mechanicsburg, Pennsylvania 17055 Re: $20,000 Participating Interest In Empire State Building Associates L.L.C. Gentlemen: Pursuant to your request, we have made a mazket value appraisal of a $20,000 participating interest in Empire State Building Associates L.L.C. The following pages include details on the subject pazticipation as well as the method we used to establish its market value. Based on these calculations, the mazket value of a $20,000 participating interest, as of March 2, 2009, was: SIXTY EIGHT THOUSAND ($68,000) DOLLARS Respectfully submitted, ames L. Le AI, ASA, MRICS State of New York Certified General Appraiser I.D. #46000005134 White Plains, New York Miami, Florida Hamden, Connecticut Scottsdaie, Arizona r Interest Appraised A $20,000 or 0.06060606% ($20,000 _ $33,000,000) in a general partnership known as Empire State Building Associates L.L.C. ("Associates"), which holds the master leasehold on the Empire State Building in New York City. History In December 1961, Associates acquired the master lease on the Empire Stag Building in New York City. The cost of the leases was $36,000,000, consisting of cash of $30,000,000 and a $6,000,000 leasehold mortgage. The cash portion of the purchase price and $3,000,000 of expenses were provided by participants who invested $33,000,000. Theme is currently no mortgage on the leasehold. The master lease contains renewal options extending through January 5, 2076. It provides for an annual ground rent of $1,970,000, which will be reduced to $1,723,750 on January 5, 2013. On April 17, 2002, the fee position was purchased for $57,500,000. Additional closing and related costs brought the price to $60,500,000. The entire amount has been financed through a first mortgage from North Fork Bank which is for a term of ten years and provides for payments of interest only at the rate of 6.5% per annum. There will be no change in the regular monthly distributions to Participants. The difference between interest payments on the mortgage and the rent previously paid to the former owners of fee title, $1,962,500 annually, will be covered by the reserve that has been established and will be renewed each year from a portion of the overage rent paid by Empire State Building Company L.L.C. to Associates. Simultaneously with the creation of the master lease, along-term operating sublease of the property was entered into with Empire State Building Company. The term of the operating sublease is coextensive with that of the master lease. Basic Rent under the sublease is $6,018,750, which Associates applies $1,970,000 to payment of ground rent, $159,417 in payment of supervisory fees to Wien & Malkin LLP and $3,889,333 as distributions to its participants. In January 2013, Basic Rent will reduce by $123,125, one-half of the reduction in the annual ground rent. The remaining $123,135, less 6% payable as an additional supervisory fee, will be available for distribution to the participants. Associates receive$ Additional Rent annually equal to one-half of the sub-lessee's profit in excess of $1,000,00, and 6% of the Additional Rent is paid to Wien & Malkin LLP as additional supervisory fees. Associates distributes all Basic Rent and Additional Rent, less ground rent and supervisory fees noted above, to its partners. Appraisal Rationale There exists no active market in which this real estate participation can be purchased or sold. -2- ' APPRAISERS AND PLANNERS INC T'he price that a purchaser would pay for a general partnership interest in Empire State Building Associates L.L.C. would likely be based on the cash distribution payable with respect to the interest. It is apparent that the repercussions of September 11, 2001 will have a long lasting effect on the cash flow and distributions from this property. Of particulaz interest, in addition to the escalating operating expenses, is that the rents on the highest floors (70's and 80's) which historically commanded the highest rents in the building no longer achieve those levels. However, commencing with 2405 the operations have improved. However, in March 2009, when distributions are usually made from the prior years operations it was determined that no additional distributions would be made in 2009 as a result of the dramatic turnaround in the economy and the market. We have averaged the distributions for the three years 2006 through 2008 made to Empire State Building Associates L.L.C. and valuing the subject interest based on its share of such distributions. The zero ($0) additional distributions projected for 2009 are reflected in the 25% discount of value referred to on the following page. In determining the Capitalization Rate, consideration was given to the following: 1. The capitalization rate of the income flow reflects the elements of safety, risk and non- liquidity. With regard to the safe rate, this is based on yields of government and AAA corporate bonds. The non-liquidity factor recognizes the difficulty in selling anon- controlling interest in an investment. There is no recognized active market in which this participation can be purchased or sold. The risk element reflects the difference between investments in safer channels of the money market and investments in real estate, where returns can vary dramatically from year to year. 2. Additional Rent can vary dramatically depending upon the cash flow being generated from operations during a particular calendar year. The variable nature of this cash flow is volatile and speculative. In the early to mid-1990's, vacancies increased and rental rates decreased. In addition, the building underwent major capital improvements and had to spend lazge sums for tenant installations and leasing commissions. For example, Associates received no Additional Rent for 1995 and 1996, while Additional Rent for 1997 was $1,061,319, $2,828,000 in 1998, $6,620,200 in 1999, $13,211,858 in 2000, $23,100,000 in 2001, $11,259,098 in 2002, $4,438,500 in 2003, $7,060,213 in 2004, $13,595,397 in 2005, $16,110,662 in 2006, $15,144,022 in 2007 and $13,370,544 in 2008. For the 2009 year there will be no distributions. This is partially a result of increasing vacancies and decreasing market rents in a weak economy but mainly from the $50,000,000 spent in an upgrading program that will continue into 2010. Discussions with management indicate that there probably will be no additional distributions in the 2010 year also. Derivation of Capitalization Rate To estimate a reasonable capitalization rate, we have relied upon input from a number of market sources, including rates published by the Real Estate Research Corp. ("BERG"), market transactions, and our own experience and awareness of current money market rates. RERC conducts an active survey by polling buyers and sellers, and also monitors returns in index form. Its survey for the Office/Second Tier Properties/East Coast/First Quarter of 2009 has Office/Central Business District buildings selling at capitalization rates of between 6.50% and 11.0°l0, with an average of 8.70% and New York City survey with an average of 8.00%. -3- APPRAISERS AND PLANNERS INC Conclusion Due to the unique nature of this property, a capitalization rate of 6.0% has been applied to the Basic Rent, as the income stream is substantially more secure and predictable than that of the Additional Rent, which can vary substantially from year to year. Therefore, a capitalization rate of 8.5% has been applied to this riskier and variable Additional Rent. However, the above referenced survey does not reflect the dramatic changes that have taken place in the marketplace since September. It has been acknowledged that the United States has been in a recession since December 2007. Unemployment is sky rocketing, the credit crisis has not only continued but is more severe, companies who have rarely reported anything but profits are now reporting losses, major companies such as General Motors, Ford and Chrysler are on the brink of bankruptcy and the global economy is similarly affected. Under these circumstances and the existing vacancies at the subject building, we have applied a discount of 25% to the values based on the above capitalization rates. Discount The interest is a general partnership interest in Empire State Building Associates L.L.C., not direct ownership of the real property itself, and is an interest of 0.06060606%. It is our opinion that such a partial interest is worth less than the arithmetical proportion of the value of the subject property as a whole. By definition, a minority interest is the ownership of an amount that does not enable the holder to exercise control. The lack of control feature of a minority interest makes it less attractive to investors who are not necessarily willing to pay the allocable value of the holding. The reduction of what a willing buyer would pay for an interest with no control is called minority interest discount. Another discount is also taken for lack of marketability and liquidity. This reflects, among other things, the difficulty in selling a general partnership interest in Empire State Building Associates L.L.C. as well as the inability to sell the holding as of a particular point in time. In arriving at the appropriate discount we have taken into consideration all of the above including studies related to Restricted Stock and the Restrictions On Transfer- pursuant to the operating agreements previously discussed as well as decisions of the U.S. Tax Court. Samuel J. & Ethel LeFrak v. Commissioner TCM 1993-526 (combined 30% discount for minority interest and lack of marketability), Ellie B. Williams v. Commissioner TCM 1998-59 (combined 44% discount for lack of control and lack of marketability), Estate of James Barudin, deceased, Muriel B. Clarke, Executrix, Petitioner v. Commissioner TCM 1996-395 (combined 45% discount for minority interest and lack of marketability), McCord v. Commissioner, 120 T.C. No. 13, May 14, 2003 (combined 32% discount for minority interest and lack of marketability), Lappo v. Commissioner, T.C. Memo 2003-258 (35.4% discount for minority interest and lack of marketability), Peracchio v. Commissioner, T.C. Memo 2003-280 (combined 29.4% discount for minority interest and lack of marketability), Estate of Woodbury G. Andrews, deceased, Woodbury H. Andrews, Executrix, Petitioner v Commissioner, T.C. Memo No. 58, 79 TC 938 (combined 65% discount for minority interest and lack of marketability), Temple v. United States, 97 A.F.T.R.2d 2006-1649 (E.D. Tex. 2006) (combined 60% discount for lack of marketability) and E/O Margot Stewart v. Commissioner, Docket No. 552005 (Government stipulated to a combined valuation discount of 42.5% for lack of marketability and lack of control), among others. -4- APPRAISERS AND PLANNERS INC It is our opinion that a 35% discount is appropriate for minority interest and lack of control and lack of marketability and liquidity. Empire State Building Associates L.L.C. Issue Price $ 20,000 Interest Held (Master Lease) 0,06060606% Cash Distributions Capitalized Basic Rent $ 2,357 Additional Rent 1995 $ 2,072 1996 0 1997 0 1998 643 1999 1,709 2000 4,012 2001 8,007 2002 14,000 2003 6,824 2004 2,691 2005 4,279 2006 8,240 2007 9,178 2008 8,103 Average 2006-2008 $ 8,507 Capitalization Rates Used: Lease Rent 6.00% Additional Rent 8.50% Indicated Pro Rata Value Based on Lease Rent $2,357 $39,283 0.060 Based on most recent distribution $8,507 $100,082 0.085 Total $139,365 Less: 25% to reflect current economic conditions (34,841) 104,524 Less: 35% Discount for minority interest and lack of control and lack of marketability and liquidity (36,583,) Indicated Value $ 67,941 Rounded $ 68,000 -5- APPRAISERS AND PLANNERS INC CERTIFICATION I certify that, to the best of my knowledge and belief: • The statements of fact contained in this report are true and correct. • The reported analyses, opinions and conclusions are limited only by the reported assumptions and limiting conditions and are my personal, impartial, and unbiased professional analyses, opinions, and conclusions. • I have no present or prospective interest in the property that is the subject of this report and no personal interest with respect to the parties involved. • I have no bias with respect to the property that is the subject of this report or to the parties involved with this assignment. • My engagement in this assignment was not contingent upon developing or reporting predetermined results. • My compensation for completing this assignment is not contingent upon the development or reporting of a predetermined value or direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. • The reported analyses, opinions, and conclusions were developed, and this report has been prepared in conformity with the requirements of the Code of Professional Ethics and Standards of Professional Practice of the Appraisal Institute, which include the Uniform Standards of Professional Appraisal Practice. • The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives. • I have not made a personal inspection of the property that is the underlying asset of Empire State Building Associates L.L.C. • No one provided significant real property appraisal assistance to the person signing this certification. • As of the date of this report, I have completed the continuing education program of the Appraisal Institute. J S L. LEVY, , ASA, MRICS 6 APPRAISERS AND PLANNERS INC STATEMENT OF QUALIFICATIONS JAMES L. LEVY, MAI, ASA, MRICS James L. Levy is Chairman of the Board of Appraisers and Planners, Inc. a full service appraisal and real estate consulting firm based in New York City. He has been involved in commercial real estate valuation for over 45 years and holds the MAI and SRA designations from the Appraisal Institute, the ASA designation from the American Society of Appraisers and the MRICS designation from the Royal Institute of Chartered Surveyors. His clients include major law and accounting firms, developers, financial institutions and municipal governments among others. Over his career, he has been involved in major New York City carnmercial projects valued in excess of fifteen billion dollars. Mr. Levy has been involved with many arbitrations serving both as an expert and arbitrator. He recently has become a member of the American Arbitration Association (AAA) Panel of arbitrators. In addition he has been appointed by the State of New York Office of Court Administration as an individual eligible to receive appointments. He has testified in more than eight hundred (800) and fifty (SO) matters in New York State Supreme Court, Federal Bankruptcy Court, United States Tax Court (Samuel J. Lefrak vs. the Internal Revenue Service), New York Civil Court and various courts in the States of Connecticut, Missouri and New Jersey. He has completed a seminar and passed the examination sponsored by the Appraisal Institute entitled Cases Studies in Partnership and Common Tenancy Valuation. In addition he has attended The Philip E. Heckerling Institute on Estate Planning's annual five day conference since 1998 in which valuation of partnership interests is always a topic. As Chairman and Senior Member of Appraisers & Planners, Inc. Mr. Levy prepares, reviews andJor signs approximately 95% of the five hundred (500) appraisal reparts that the firm produces on an annual basis. The appraisal reports primarily are of office buildings, apartment houses including rentals, cooperatives and condominiums and retail centers mostly in the Tri- State area of New York, New Jersey and Connecticut. PROFESSIONAL AFFILIATIONS American Arbitration Association (AAA) -Panel of Arbitrators American Society of Appraisers -ASA Appraisal Institute - MAI, SRA New York State Society of Real Estate Appraisers Real Estate Board of the City of New York Royal Institute of Chartered Surveyors (MRICS) Westchester County Board of Realtors, Inc. Westchester County Society of Real Estate Appraisers, Inc. -Senior Member -7- APPRAISERS AND PLANNERS INC EDUCATION Graduate Studies (Real Estate) -New York University Bachelor of Arts (Economics) -Rollins College Appraisal Institute • Basic Principles, Methods & Techniques (Course I ) • Real Estate Appraisal Principles (Course 1 A 1) • Basic Valuation Procedures (Course lA2) • Capitalization Theory & Techniques, Part 1 (Course 1 B 1) • Urban Properties (Course II) • Techniques & Mathematics of Capitalization (Course VI) Continuing Education Courses: • National Uniform Standards of Professional Appraisal Practice Update Course • Standards and Ethics for Professionals • Business Practices and Ethics • Inspection/Evaluation of Properties/Physical Condition • Co-Op Valuation for Mortgage Financing • Land Valuation and Purchase Price Decisions • Appraisal Review -Income Properties • Wall Street Securitization • The Office Building • Appraisal Practices for Litigation • Eminent Domain and Condemnation Appraisal • Attacking and Defending an Appraisal in Litigation Part I and Part II • Government Impact on Real Estate and New York City Real Estate Trends LICENSES State of New York - Real Estate Broker - Certified General Appraiser #46000005134 State of Connecticut - Certified General Appraiser #0000372 State of Georgia - Certified General Appraiser #241009 State of New Jersey - Certified General Appraiser #01572 State of Maryland - Certified General Appraiser #27593 Commonwealth of Pennsylvania - General Appraiser #GA-001674 Commonwealth of Massachusetts - Certified General Appraiser #101740 -8- APPRAISERS AND PLANNERS INC