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HomeMy WebLinkAbout03-0985 RECEIPT, RELEASE, REFUNDING AND INDEMNITY AGREEMENT CONCERNING TERMINATION OF THE CONSTANCE LYNN CRISPEN TRUST UNDER AGREEMENT DATED 11/02/89 THIS AGREEMENT, made this ~-] ~ day of May, 2003, WITNESSETH: THE CIRCUMSTANCES leading up to the execution of this Agreement are as follows: 1. On November 2, 1989, James F. Crispen, M.D. (the "Settlor"), established an inter vivos funded life insurance trust (the "Trust") by Trust Agreement with Heath L. Allen, of Camp Hill, Cumberland County, Pennsylvania, and Henry F. McKonly, Jr., of Mechanicsburg, Cumberland County, Pennsylvania (the "Co-Trustees"). An original of the Trust Agreement is attached hereto as Exhibit "A." 2. Under the terms of Item First, Paragraph 7 of the Trust Agreement, upon Constance Lynn Crispen (the "Beneficiary") attaining the age of forty-seven (47) years, the Co-Trustees were instructed to pay over and distribute to Beneficiary, absolutely and free of all trusts, the assets and principal, together with any accumulated or undistributed income, of the Trust. 3. The Beneficiary was born on February 17, 1956, and accordingly attained the age of forty-seven (47) on February 17, 2003. 4. The Co-Trustees have administered the Trust for the benefit of the Beneficiary in accordance with the terms of the Trust Agreement. As of November 26, 2002, the assets of the Trust consisted of a $500,000 paid-up life insurance policy on the life of Settlor, with a total cash value of One Hundred Fifty-Four Thousand Four Hundred Seventy-Nine and 91/100 Dollars ($154,479.91). The Trust also contains Thirty-Three Thousand (33,000) shares of Rite Aid Corporation stock (NYSE: RAD) valued at $3.82 per share as of March 5, 2003. 5. It is the desire of the Beneficiary that the Co-Trustees terminate the Trust in accordance with Item First, Paragraph 7 by the distribution of the remaining assets, principal and income of the Trust to the Beneficiary, and that such be done without the formality of an accounting in the Court and without the formal approval by the Court of a petition to terminate the Trust pursuant to the Pennsylvania Probate, Estates and Fiduciaries Code § 6102, 20 Pa.C.S.. § 6102. 6. In consideration of the indemnification and such other terms that are hereinafter provided, the Co-Trustees are willing to terminate the Trust and to distribute the assets, principal and income thereof as set forth below. NOW THEREFORE, in consideration of the foregoing, and intended to be legally bound hereby, the Beneficiary for herself, her heirs, personal representatives, successors and assigns, does hereby agree as follows: A. Statement of Accounts. The Beneficiary acknowledges receipt of copies of the Fiduciary Income Tax Returns and the Forms 1041 (U.S. Income Tax Returns for Estates and Trusts) since the inception of the Trust, declares that she has had the opportunity to review the Fiduciary Income Tax Returns and Forms 1041 and based upon an examination (or on her decision not to make such an examination), she is satisfied that she has sufficient information to make an informed waiver of her right to a formal accounting with the Court, and does hereby waive the filing and auditing of same. B. Approval of Termination. The Beneficiary approves the termination of the Trust and agrees to accept the assets, principal and interest listed on Exhibit "B" attached hereto and incorporated herein by reference, in full and complete satisfaction of her interest in the Trust. -2- mo Fo Receipt of Assets. The Beneficiary acknowledges receipt of the assets, principal and income of the Trust as indicated on Exhibit "B." Releases. The Beneficiary, for herself, her heirs, personal representatives, successors and assigns, hereby absolutely and irrevocably remises, releases, quitclaims and forever discharges the Co-Trustees (in their capacities as fiduciaries and in their individual capacities) and each and every of the Co-Trustees' employees, agents, attorneys, advisors, and counselors, and their respective heirs, personal representatives, successors and assigns, of and from any and all actions, payments, accounts, reckonings, liabilities, claims and demands relating in any way to the Co-Trustees' administration of the Trust, including, but not limited to, the failure of the Co-Trustees to file an account of such administration with, and obtain the approval of, the Court, and the termination of the Trust as provided herein. Refunds. The Beneficiary, to the extent of the funds received by her hereunder, covenants and agrees to refund upon demand by the Co-Trustees all or any amount which may hereafter be determined by the Co-Trustees or by the Court to have been an erroneous or excess distribution to her regardless of the cause of such erroneous distribution, and agrees that any period for the limitation of actions for the collection of any erroneous distribution to her shall commence only at such time as the Co-Trustees shall have obtained actual knowledge of such erroneous distribution and that in no event shall the period for the collection of any erroneous distribution be less than two years after the actual discovery thereof by the Co-Trustees. Indemnifications. The Beneficiary agrees to indemnify and hold harmless the Co-Trustees from and against any and all claims, loss, liability or damage (whether or not related to the negligence of the Co-Trustees) which they may suffer or to which they may be subjected by reason of their administration of the Trust, the distribution of the Trust based on the informal accounting and not a formal accounting, and the distribution of the assets, principal and income of the Trust without having the approval of the Court. Voluntary Act. The Beneficiary agrees that this Agreement has been freely and voluntarily executed, and that she has not relied on any special inducement, promise, or representation other than those representations set forth herein. Right to Counsel. The Beneficiary acknowledges that she understands all of the terms and conditions of this Agreement, and that she has been advised by legal counsel for the Co-Trustees that it may be in her best interest to seek the advice of independent legal counsel before executing this Agreement, in order to fully understand the legal consequences of such terms and conditions. -3- Consent to Jurisdiction. The Beneficiary consents to the Court of Common Pleas, Orphans' Court Division, Cumberland County, Pennsylvania, exercising personal jurisdiction over her in any suit or action arising out of the enforcement of this Agreement. Jo Governing Law. This Agreement shall be governed by the laws of the Commonwealth of Pennsylvania. IN WITNESS WHEREOF, the Beneficiary hereunder has set her hand and seal to the Consent attached hereto, to be effective as of the date first above written. -4- CONSENT TO RECEIPT, RELEASE, REFUNDING AND INDEMNITY AGREEMENT CONCERNING TERMINATION OF THE CONSTANCE LYNN CRISPEN TRUST UNDER AGREEMENT DATED 11/02/89 THE UNDERSIGNED, Constance Lynn Crispen, as the Beneficiary of the Trust Agreement of James F. Crispen, M.D., dated November 2, 1989, hereby consents to and joins in the Receipt, Release, Refunding and Indemnity Agreement Concerning Termination of the Constance Lynn Crispen Trust, a copy which (including all exhibits thereto) has been provided to her, for the purposes expressed therein. STATE OF FLORIDA COUNTY OF tr~r- ¢ v' SS On this, the 6.D_ I day of /T~ ,~ ~ ,2003, before me, the undersigned officer, personally appeared Constance Lynn Crlspen, known to me (or satisfactorily proven) to be the person whose name.is subscribed to the within instrument, and acknowledged that she executed the same as her free and voluntary act for the purposes expressed therein. IN WITNESS WHEREOF, I have hereunder set my hand and official seal. Notary Public ~ ......... ......I! ~: :.~ MY COMMISSION # CC 872630 II ~, ~-= EXPIRES: September 21, 2003 Il · ,~,~, So~ded Thru Notary Public Unbeliefs II EXHIBIT A THE CONSTANCE LYNN CRISPEN TRUST NOW, on ~,~m~%%~' ~ , 1989, JAMES F. CRISPEN, M.D., of Dauphin County, Pennsylvania, as Settlor, by this Agreement and desiring to establish a Trust, hereby assigns to HEATH L. ALLEN, of Camp Hill, Cumberland County, Pennsylvania, and HENRY F. McKONLY, JR., of 22 Kensington Square, Mechanicsburg, Cumberland County, Pennsylvania, as Co-Trustees, hereinafter referred to in the singular neuter gender, the property described in Schedule A to be held, together with such additional property as may be transferred, devised or bequeathed hereto by Settlor or any other person, upon the following terms of trust: FIRST: DISPOSITIVE PROVISIONS During the lifetime of Beneficiary: 1. Settlor's child, Constance Lynn Crispen, (born: February 17, 1956) hereinafter referred to as "Beneficiary," during Beneficiary's lifetime, shall have the absolute right (anything to the contrary appearing in Item THIRD hereof notWith- standing), exercisable in Beneficiary's sole discretion, to withdraw during each calendar year in which an addition or additions are made to this Trust, an aggregate amount equal to the lesser of the amount of the annual additions to this Trust up to the date of such withdrawal or Ten Thousand Dollars ($10,000) multiplied by the number of donors making addition(s) to this Trust during such calendar year, and such right of withdrawal shall be non-cumulative from year to year. 2. Trustee shall notify Beneficiary of any transfer or other contribution to the Trust, and of the donor(s) thereof, as soon as is practical after the contribution or transfer has been made but not later than December 31 of the year in which the contribution or transfer has been made. 3. All withdrawals shall be made by written demand signed by Beneficiary and delivered to Trustee not more than thirty (30) days after the date of Trustee's notification to Beneficiary of any transfer or other contribution to the Trust. Withdrawals shall be paid by Trustee not more than sixty (60) days after the date of such written demand. For purposes of this special right of withdrawal, assets originally transferred to this Trust shall be deemed to be an addition in the year in which the transfer occurs. 4. Such rights of withdrawal shall constitute a first charge against the principal of this Trust and during the contin- uance of this Trust shall take precedence over all other dis- tributions and all other beneficial interests hereunder. 5. In creating this power of withdrawal, it is the intention of Settlor to create an annual non-cumulative power of invasion which will qualify any transfer of property hereto as a transfer of a present interest under Section 2503(b) of the Internal Revenue Code of 1986, as amended, and which will not be treated as a release of such a power as that term is defined in Section 2514(e) of said Code. -2- 6. Trustee shall pay to or apply for the benefit of Beneficiary at such times as Trustee determines as much of the net income and, if income shall be insufficient therefor, as much of the principal, as Trustee, in its sole discretion both as to income and principal, shall deem necessary for Beneficiary,s maintenance, support and education (including college and graduate and professional studies); provided, however, that before making any such payments of principal to Beneficiary, Trustee shall take into account other property and income available to Beneficiary, and in so doing the decision of Trustee as to the amount of principal so used and the extent to which other resources are considered shall be conclusive as to all parties in interest. Any income not expended may be accumulated and added to principal. 7. When Beneficiary attains the age of forty-seven (47) years, Trustee shall pay over and distribute to Beneficiary, absolutely and free of all trusts, such share or the then- remaining principal, together with any accumulated or undis- tributed income, of the Trust. SECOND: DISPOSITIVE PROVISIONS UPON BENEFICIARY'S DEATH In the event Beneficiary dies before Settlor, or in the event that Beneficiary survives Settlor but dies before the entire principal of the Trust has been withdrawn or distributed, such share or the then-remaining principal, together with any accumulated or undistributed income, of the Trust (as the case may be) shall be distributed to or for the benefit of such person -3- or persons or corporation or corporations (including Bene- ficiary's estate, Beneficiary's creditors or the creditors of Beneficiary's estate) in such amounts or proportions and in such lawful interests or estates, whether absolute or in trust, as Beneficiary may direct by Beneficiary's Last Will, provided such Last Will contains a specific reference to this general power of appointment, or in default of such appointment, or to the extent it is not effectively exercised, then, to Beneficiary's estate. THIRD: TERMINATION OF TRUSTS 1. Notwithstanding any other provisions hereof, Trustee may, in its sole discretion, at any time after Settlor's death, terminate any or all of the trusts created herein if the amount thereof would make the continuing of said trust imprac- tical. Upon such termination, Trustee shall pay the principal and any accumulated or undistributed income of any such trust share to the person or persons entitled to receive the income therefrom in the proportions to which they were then entitled to receive the income. If no such fixed proportions then exist among beneficiaries, payment shall be made in equal shares, per stirpes, among the persons to whom the income may then be paid, and upon such termination the rights of all other persons who might otherwise have interests as succeeding life tenants or remaindermen shall cease. 2. Any and all trusts created herein shall terminate in any event, and every final distribution or payment of the principal of the trust estate shall be made, not later than -4- twenty-one (21) years after the death of the last to die of Settlor's issue living on the date hereof, in the event that this trust shall have not terminated previously in accordance with the terms hereof. In the event of the termination of this trust as provided for in this paragraph, Trustee shall pay over and deliver the principal, together with any accumulated or undis- tributed income, free and discharged of any trust, to the person or persons then entitled to receive the income thereof in the proportions to which he, she or they were then entitled to receive the income. FOURTH: MINORITY AND DISABILITY PROVISIONS Unless otherwise provided for herein, any income or princi- pal payable to any beneficiary who may be then a minor (for all purposes of this Trust, a minor shall be deemed to be a person who has not attained twenty-one (21) years of age) or, who may then be, in the opinion of Trustee, mentally or physically disabled, shall be held in a separate trust by Trustee during such minority or disability unless the trust share is sooner terminated as otherwise provided herein; said net income and/or principal may be accumulated or expended for the maintenance, support and education (including college and graduate and professional studies) of such beneficiary, as Trustee, in its sole discretion, may determine. Trustee, in the expenditure of income and/or principal for such purposes, may, in its discre- tion, apply the same directly without intervention of a guardian, or pay the same to any person having care or control of said -5- beneficiary, or with whom the beneficiary resides, without the duty on the part of Trustee to see to or inquire into the application of the funds by any person to whom any payment is so made. The balance of such income and/or principal shall be paid to said beneficiary when the disability or minority ceases, or to said beneficiary's estate in the event of death prior thereto. FIFTH: PROTECTIVE PROVISION All principal and income shall, until actual distribution to a beneficiary, be free of the debts, contracts, alienations, torts and anticipations of any beneficiary, and the same shall not be liable to any levy, attachment, execution or sequestration while in the possession of Trustee. SIXTH: INSURANCE POLICIES 1. Trustee shall not be under any obligation to pay premiums on insurance policies held hereunder, if any, and shall have no responsibility to see that such policies are kept in force. 2. No life insurance company shall be responsible to see to the execution or performance of any trust created herein or to the application of any insurance proceeds paid to any such trust. 3. Trustee may, without incurring liability, compromise and settle any questions relating to any insurance policy upon such terms as it deems wise. Trustee need not institute litigation to collect the proceeds of any policy unless -6- it is reasonably indemnified for costs, counsel fees and other expenses of such litigation. SEVENTH: ~OWERS OF TRUSTEE In addition to the powers hereinbefore provided and those given by law, Trustee, and any additional or successor Trustee, without any order of court and in its sole discretion, may: 1. Hold and retain the property now or hereafter comprising a part of this trust, for such length of time as in its sole discretion it may deem wise, or sell any part thereof, without liability of any kind by reason of such retention or sale and invest and reinvest, alter, vary and change investments from time to time, in such manner and in such property, real, personal or otherwise, including any common or diversified trust funds maintained by, or stock of, any bank or trust company or any holding company or affiliate thereof, as Trustee may deem prudent, without being confined to what are known as legal investments under the laws of any state or jurisdiction and without regard to whether such property (including but not limited to Rite-Aid Corporation stock) does or does not represent an overconcentration in one investment; 2. Repair, alter, improve or lease, for any period of time (even for more than five (5) years) any property and give options for leases; 3. Make distribution hereunder either in cash or in kind or partly in each, and cause any share to be composed of -7- property different in kind from any other shares, without regard to the basis of such property; 4. Purchase investments at a premium; 5. Vote in person, or by proxy, all stocks or other securities held; 6. Exercise any rights or warrants to subscribe for stocks or bonds or other allotments received by reason of securities held, or sell them for such prices as it may deem best; 7. Deposit, surrender or exchange stocks or pay any assessments in connection with any reorganization or merger or similar proceedings as it may deem best; 8. Exercise any option, right or privilege granted in any insurance policy; 9. Sell any real or personal property at public or private sale to any person or entity, or give options therefor for cash or credit, without liability on the part of the pur- chaser to see to the application of the purchase money; provided, however, that no sale hereunder shall be made at a price less than that which Trustee acting in good faith shall consider to represent adequate and full consideration; 10. Borrow money from any source, including any Trustee, mortgage or pledge any property; 11. After the death of Settlor, to merge any trust created hereunder with any other trust or trusts created by Settlor or by Settlor's spouse under will or trust, if the terms -8- of such trusts are then substantially similar and held for the primary benefit of the same person; 12. Compromise claims; 13. Register securities in the name of a nominee in such manner that title shall pass by delivery; 14. Employ attorneys, investment counsel, accountants and agents in connection with the discharge of its duties, and determine and pay to them reasonable compensation; 15. Pool the assets of all trusts created hereunder or any of them for investment purposes, allocating to each trust an undivided interest in all of the assets so held; 16. Add to the principal of any trust created here- under any property received from any person by Deed, Will or in any other manner; 17. In the exercise of its discretion with respect to the use of principal for any beneficiary, Trustee may take into account other property and income available to such beneficiary; in so doing, Trustee may conclusively rely on written represen- tations made to it by such beneficiary, and the judgment of Trustee as to the amount of principal so used and the extent to which other resources are considered shall be conclusive as to all parties in interest; 18. Anything herein to the contrary notwithstanding, no individual Trustee hereunder shall make or participate in any decision of Trustee required for the discretionary termination of any trust hereunder or to authorize the discretionary payment of -9- income or principal in cases where such terminated trust or such principal or income (as the case may be) would be distributable to or for the benefit of himself, herself, or anyone such Trustee is legally obligated to support; 19. Exercise all power, authority and discretion given by this Trust after termination of any trust created herein until the same is fully distributed; 20. Accept property or not, in Trustee's sole discre- tion, by bequest or lifetime transfer from any person, estate or trust, subject to the payment of, or liability for, state and/or federal gift, estate, transfer, succession, inheritance or other death taxes, including any interest or penalties thereon, and sign any required consent or acknowledgement of liability for such taxes and/or lien against such property; 21. Anything hereinbefore to the contrary notwith- standing, Trustee shall not exercise any power, authority or discretion if the exercise of such power, authority or discretion would cause the assets of this trust to be included in the "gross estate', of Settlor and/or Trustee, as such term is defined in the Internal Revenue Code of 1986, as amended. -10- EIGHTH: APPOINTMENT OF ADDITIONAL AND SUCCESSOR TRUSTEES 1. If, during the term of this Trust, Heath L. Allen shall be unable or unwilling to serve as an individual Co- Trustee, then the law firm with which he is associated, or was last associated shall designate an attorney residing in Cumber- land County, Pennsylvania as his successor. 2. If, during the term of this Trust, Henry F. McKonly, Jr. shall be unable or unwilling to serve as an indi- vidual Co-Trustee, then the public accounting firm with which he is associated, or was last associated, shall designate a cer- tified public accountant as his successor. 3. At any time during the term of this Trust, the then-serving individual Co-Trustees may designate a bank or trust company with trust powers to serve with them, or with one of them, or as sole Trustee. At all times prior to such designa- tion, an attorney and a certified public accountant shall serve as individual Co-Trustees so that two persons shall serve at all times. 4. Any Trustee acting hereunder may resign at any time without court approval, to become effective upon delivery to any of the other then serving Trustees of a written instrument signed by the resigning Trustee, or if there be no other Trustee then serving then when filed with the clerk of the court having jurisdiction of this Trust. -11- ~INTH: WAIVER OF BOND Settlor directs that Trustee and any alternates or succes- sors thereto shall not be required to file a bond to secure the faithful performance of the duties of their office in any jurisdiction. TENTH: IRREVOCABILITY This Trust shall be irrevocable, and Settlor hereby ex- pressly waives all rights and powers to alter, amend, revoke or terminate the Trust or any of its terms in whole or in part. Settlor hereby renounces any interest, either vested or contin- gent, including any reversionary interest or possibility of reverter, in the income or principal of this Trust. ELEVENTH: SITUS The situs of this Trust shall be Cumberland County, Pennsyl- vania, and questions pertaining to the validity, construction and administration of any trust hereunder shall be determined in accordance with the laws of the Commonwealth of Pennsylvania. TWELFTH: MISCELLANEOUS 1. Wherever the words "child," "children,, or "issue" are used in this instrument, they shall include those both naturally born and legally adopted. 2. Throughout this Agreement of Trust, nouns, pronouns and verbs shall be construed as masculine, feminine, neuter, singular or plural, whichever shall be applicable. 3. Trustee, and any successors, shall receive reasonable compensation for services rendered in such capacity. -12- IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day and year first above written. WITNESS: yteeChereby accepts: cKONLY, ~, (SEAL) Trustee -13- COMMONWEALTH OF PENNSYLVANIA : : COUNTY OF DAUPHIN : SS. On the~ day of ~'cm3, , 1989, before me, the subscriber, a notary public in and for the Commonwealth of Pennsylvania, personally appeared the above-named JAMES F. CRISPEN, M.D. and in due form of law acknowledged the foregoing Agreement of Trust to be his voluntary act and deed for the purposes expressed therein. WITNESS my hand and notarial seal the day and year afore- said. Notary ,~ubl ic :~ NOTARIAL SEAL KATHRYN C. HOLLINGER, Notary_Public Harrisburg, Dauphin County My Commission Expires March 14, 1991 --14-- COMMONWEALTH OF PENNSYLVANIA : : COUNTY OF DAUPHIN : SS. On the~. day of ~.%'. , 1989, before me, the subscriber, a notary public in and for the Commonwealth of Pennsylvania, personally appeared the above-named HEATH L. ALLEN, and in due form of law acknowledged the foregoing Agreement of Trust to be his voluntary act and deed for the purposes expressed therein. WITNESS my hand and notarial seal the day and year afore- said. Notary P~blic ~ NOTARIAL SEAL KATHRYN C. HOLLINGER, Notary. Public Harrisburg, Dauphin County My Commission Exoires March ~ -15- COMMONWEALTH OF PENNSYLVANIA : : COUNTY OF DAUPHIN : SS. On the ~ day of ~%~, , 1989, before me, the subscriber, a notary public in and for the Commonwealth of Pennsylvania, personally appeared the above-named HENRY F. McKONLY, JR., and in due form of law acknowledged the foregoing Agreement of Trust to be his voluntary act and deed for the purposes expressed therein. WITNESS my hand and notarial seal the day and year afore- said. Notary Public NOTARIAL SEAL KATHRYN C. HOLLINGER, Notary_Pub;ic Harrisburg. Dauphin Counly My Commission Ex~ires March 14, 1991 -16- Item SCHEDULE A Description 8,250 shares Rite Aid Corporation common @ 38% per share Value $317,625