HomeMy WebLinkAbout09-04-15 In the Court of Common Pleas of Cumberland County, Pennsylvania
Orphans' Court Division
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In re: The Ann F. Moyer Irrevocable C)
Trust U/A dtd. July 30, 2009 p �,
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N o. 293.-5=
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Petition for Modification of Non-charitable Irrevocable Trust by the Cou` U,
Pursuant to 20 Pa. C.S. Section 7740.2
AND NOW, come the Petitioners, Clark M. Sprague and Alexander P. Sprague, by
and through their undersigned attorney, and state the following in support of
their petition:
1. The Petitioners are Clark M. Sprague, of 112 Junction Rd., Hampton, New
Jersey, and Alexander P. Sprague, of 1590 Boiling Springs Drive, Boiling Springs,
Pennsylvania.
2. Ann F. Moyer (the "Settlor") established the Ann F. Moyer Irrevocable Trust
under a written agreement of trust dated July 30, 2009 (the "Trust"), appointing
the Petitioners, Clark M. Sprague and Alexander P. Sprague, as her Trustees.
3. Section 4.01 of the Trust authorized the Trustees, after the death of the
Settlor, to divide the Trust corpus into separate shares for each of the Settlor's
four (4) children, per stirpes, and to administer each share as a separate trust.
4. The Settlor died October 31, 2012, and Trustees thereafter divided the
Trust corpus into four separate trusts (the "25% Sub-Trusts"), one for the benefit
of each of the Settlor's children, Patricia A. Sprague, Oren D. Sprague, Clark M.
Sprague and Alexander P. Sprague.
5. With respect to the 25% Sub-Trust set apart for the benefit of Oren D.
Sprague, the Petitioners, as Trustees, exercised their authority, under Section
2.07 of the Trust, to appoint Stephen D. Tiley, esquire, as Independent Special
Trustee of the 25% Sub-Trust for the benefit of Oren D. Sprague, and thereby
ceded to the said Stephen D. Tiley all of their fiduciary powers to administer the
25% Sub-Trust for the benefit Oren D. Sprague.
6. The Petitioners continue to serve as Trustees for the other three separate
25% Sub-Trusts established for the benefit of Patricia A. Sprague, Clark M.
Sprague and Alexander P. Sprague, respectively.
7. Section 4.02 (e) of the Trust grants each beneficiary a general testamentary
power of appointment over the principal and income remaining in his or her
separate trust at the time of his or her death.
8. Section 4.02 (e) of the Trust further provides that, to the extent the
testamentary power of appointment is not exercised, the unappointed trust
remainder shall be distributed, per stirpes, in trusts for the descendants of the
deceased beneficiary.
9. Section 2.02 (b) of the Trust provides that if either of the Petitioners "shall
cease to serve, the other shall serve as sole successor Trustee."
10. Section 2.02 (b) of the Trust also provides that, if both of the Petitioners are
"unable or unwilling" to serve, either may appoint by written instrument, an
individual or corporate fiduciary to serve as successor trustee.
11. The Trust lacks any provision for the appointment of one or more successor
trustees after the deaths of both of the Petitioners, since they will not then be
able to appoint their successor by written instrument.
12. 20 Pa. C.S. § 7740.2 (b) authorizes the Court to modify the administrative
provisions of a noncharitable irrevocable trust if the existing provisions are
impracticable.
13. Unless the Trust is modified, a vacancy in the office of trustee must occur
after the deaths of both of the Petitioners, necessarily rendering the
administration of the Trust impracticable.
14. Petitioners believe it is appropriate to designate a separate successor
trustee for each of the 25% Sub-Trusts that have been set apart for the Settlor's
four children from the Ann F. Moyer Irrevocable Trust.
WHEREFORE, the Petitioners hereby pray this Court issue a Decree
modifying the Ann F. Moyer Irrevocable Trust, pursuant to 20 Pa. C.S. § 7740.2
(b), by adding subsection 2.02 (f) to provide as follows: "Upon the death,
resignation or incapacity of the last to serve of Clark M. Sprague and Alexander P.
Sprague—
(i) Daniel Sprague shall act as trustee of that portion of the Trust set
aside for Clark M. Sprague and his descendants;
(ii) Brenna Sprague shall act as trustee of that portion of the Trust set
aside for Alexander P. Sprague and his descendants;
(iii) Patricia A. Sprague while she lives, and thereafter her executor, shall
act as trustee of that portion of the Trust set aside for Patricia A.
Sprague and her descendants; and
(iv) Oren D. Sprague, while he lives, and thereafter his executor, shall act
as Trustee of that portion of the Trust set aside for Oren D.
Sprague and his descendants."
Respectfully submitted:
Dated: D S By:
Thomas E. Flower
Flower Law, LLC
10 W. High Street
Carlisle, PA 17013
(717) 243-5513
Counsel for the Petitioners
In the Court of Common Pleas of Cumberland County, Pennsylvania
Orphans' CourtDivision
In re: The Ann F. Moyer Irrevocable
Trust U/A dtd. July 30, 2009
No. 2015-
VERIFICATION
I, Alexander P. Sprague, hereby verify that the statements made in the foregoing
Petition are true and correct, to the best of my knowledge, information and
belief. I understand that false statements herein are made subject to the
penalties of 18 Pa. C.S.A. § 4904, relating toyn falsification to authorities.
DATED: September ! , 2015. By:
Alexander P. Sprage
t
THE ANN F. MOYER IRREVOCABLE TRUST
July 28, 2009
Taxpayer Identification No. 35-6815171
LAW OFFICES
STARK& STARK, P.C.
P.Q. BOX 5315
PRINCETON, NEW JERSEY 08543
(609) 896-9060
`t
The Ann F. Moyer Irrevocable Trust
Table of Contents
Article One Establishing My Trust ............................................... 1-1
Section 1.01 Identifying My Trust.............................................................. 1-1
Section 1.02 Reliance by Third Parties on Affidavit or Certification
ofTrust................................................................................... 1-1
Section 1.03 An Irrevocable Trust.............................................................. 1-1
Section 1.04 Transfers to the Trust............................................................. 1-2
Section 1.05 Statement of My Intent.......................................................... 1-2
Section 1.06 My Beneficiaries.................................................................... 1-2
Article Two Trustee Succession Provisions................................ 2-1
Section 2.01 Resignation of a Trustee........................................................2-1
Section 2.02 Trustee Succession.................................................................2-1
Section 2.03 Notice of Removal and Appointment....................................2-2
Section 2.04 Appointment of a Co-Trustee................................................2-2
Section 2.05 Corporate Fiduciaries.............................................................2-2
Section 2.06 Incapacity of a Trustee...........................................................2-3
Section 2.07 Appointment of Independent Special Trustee........................2-3
Section 2.08 Rights and Obligations of Successor Trustees.......................2-3
Article Three Administration During My Lifetime.......................... 3-1
Section 3.01 Beneficiaries' Right to Withdraw Contributions...................3-1
Section 3.02 Power to Limit or Exclude Beneficiaries' Withdrawal
Rights.....................................................................................3-1
Section 3.03 Exercise of Right to Withdraw by Lifetime
Beneficiaries..........................................................................3-1
Section 3.04 Notice by My Trustee of the Right to Withdraw...................3-2
Section 3.05 Lapse of Right to Withdraw...................................................3-2
Section 3.06 Satisfaction of Demand Right by My Trustee.......................3-2
Section 3.07 Definition of Contribution.....................................................3-2
Section 3.08 Discharge of My Trustee Upon a Distribution ......................3-3
Section 3.09 Distribution of Income and Principal.....................................3-3
Section 3.10 Lifetime Limited Power of Appointment..............................3-4
Section 3.11 Administration Upon My Death............................................3-4
Article Four Administration of Remaining Trust Property..........4-1
Section 4.01 Division of Remaining Trust Property...................................4-1
Section 4.02 Administration of the Separate Trusts...................................4-1
i
Article Five Remote Contingent Distribution............................... 5-1
Article Six Administration of Trusts for Underage and
Incapacitated Beneficiaries.......................................6-1
Section 6.01 Distributions for Underage and Incapacitated
Beneficiaries ..........................................................................6-1
Section 6.02 Methods of Distribution.........................................................6-1
Section 6.03 Application of Article............................................................6-2
Article Seven Trust Administration .................................................7-1
Section 7.01 Distributions to Beneficiaries ................................................7-1
............................
Section 7.02 No Court Proceedings............................................................7-1
Section 7.03 No Bond....................................... ...7-1
.......................................
Section 7.04 Exoneration of My Trustee....................................................7-1
Section 7.05 Trustee Compensation...........................................................7-2
Section 7.06 Employment of Professionals................................................7-2
Section 7.07 Collection of Proceeds Upon the Death of an Insured...........7-3
Section 7.08 Insurance Carrier Protected in Dealing With My
Trustee....................................................................................7-3
Section 7.09 Exercise of Power of Appointment........................................7-3
Section 7.10 Determination of Principal and Income.................................7-3
Section 7.11 Trust Accounting ..................................................................7-4
Section 7.12 Information to Beneficiaries..................................................7-4
Section 7.13 Action of Trustees; Disclaimer..............................................7-4
Section 7.14 Delegation of Trustee Authority; Power of Attorney............7-5
Section 7.15 Additions to Separate Trusts..................................................7-5
Section 7.16 Authority to Merge or Sever Trusts.......................................7-5
Section 7.17 Authority to Terminate Trusts...............................................7-6
Section 7.18 Merger of Corporate Fiduciary..............................................7-6
Section 7.19 Beneficiary's Status...............................................................7-6
Section 7.20 Discharge of Third Persons....................................................7-6
Section 7.21 Certificate by Trustee.............................................................7-7
Section 7.22 Funeral and Other Expenses of Beneficiary..........................7-7
Section 7.23 Generation-Skipping Transfer Tax Provisions......................7-7
Section 7.24 Grantor Trust Provisions........................................................7-8
Section 7.25 Authorization to Reimburse Me for Income Tax
Liability..................................................................................7-9
Article Eight My Trustee's Powers.................................................8-1
Section 8.01 Introduction to Trustee's Powers...........................................8-1
Section 8.02 Execution of Documents by My Trustee...............................8-1
Section 8.03 Investment Powers in General...............................................8-1
Section 8.04 Banking Powers.....................................................................8-2
Section 8.05 Business Powers.....................................................................8-2
Section 8.06 Contract Powers.....................................................................8-2
ii
Section 8.07 Common Investments ............................................................8-3
Section 8.08 Environmental Powers...........................................................8-3
Section 8.09 Insurance Powers...................................................................8-3
Section 8.10 Loans and Borrowing Powers................................................8-6
Section 8.11 Nominee Powers....................................................................8-6
Section 8.12 Payment of Taxes and Expenses............................................8-6
Section 8.13 Purchase of Assets from and Loans to My Probate
Estate......................................................................................8-6
Section 8.14 Real Estate Powers.................................................................8-7
Section 8.15 Residences and Tangible Personal Property..........................8-7
Section 8.16 Retention and Abandonment of Trust Property.....................8-8
Section 8.17 Securities,Brokerage and Margin Powers.............................8-8
Section 8.18 Settlement Powers..................................................................8-9
Section 8.19 Limitation on My Trustee's Powers......................................8-9
Article Nine General Provisions....................................................9-1
Section 9.01 Maximum Term for Trusts.....................................................941
Section 9.02 Spendthrift Provision.............................................................9-1
Section 9.03 Changing the Governing Law and Situs of
Administration.......................................................................9-1
Section 9.04 Definitions..............................................................................9-2
Section 9.05 General Provisions and Rules of Construction......................9-6
- 11]
The Ann F. Moyer Irrevocable Trust
Article One
Establishing My Trust
The date of this Irrevocable Trust Agreement is 2009. The parties to
the agreement are Ann F. Moyer(the"Settlor")and ark M Sprague and Alexander P. Sprague
(collectively my"Trustee").
By this agreement I intend to create a valid trust under the laws of the Commonwealth of
Pennsylvania and under the laws of any state in which any trust created under this agreement is
administered.
I may not serve as Trustee of any trust created under this agreement at any time.
Section 1.01 Identifying My Trust
My trust may be referred to as"Clark M raga and Alexander P. Sprague, Trustee of the Ann
F. Moyer Irrevocable Trust, dated ,2009."
For the purpose of transferring property my tru , or identifying my trust in any beneficiary or
pay-on-death designation, any description referring to my trust shall be effective if it reasonably
identifies my trust. Any description that contains the date of my trust, the name of at least one
initial or successor Trustee and an indication that my Trustee is holding the trust property in a
fiduciary capacity shall be sufficient to reasonably identify my trust.
Section 1.02 Reliance by Third Parties on Affidavit or Certification of Trust
From time to time, third parties may require documentation to verify the existence of this
agreement,or particular provisions of it, such as the name or names of my Trustee or the powers
held by my Trustee. To protect the confidentiality of this agreement, my Trustee may use an
affidavit or a certification of trust that identifies my Trustee and sets forth the authority of my
Trustee to transact business on behalf of the trust in lieu of providing a copy of this agreement.
The affidavit or certification may include pertinent pages from this agreement, such as title or
signature pages.
A third party may rely upon an affidavit or certification of trust that is signed by my Trustee with
respect to the representations contained in the affidavit or certification of trust. A third party
relying upon an affidavit or certification of trust shall be exonerated from any liability for actions
he or she takes or fails to take in reliance upon the representations contained in the affidavit or
certification of trust. A third party dealing with my Trustee shall not be required to inquire into
the terms of this agreement or the authority of my Trustee, or to see to the application that my
Trustee makes of funds or other property received by my Trustee.
Section 1.03 An Irrevocable Trust
This trust is irrevocable, and I cannot alter, amend,revoke, or terminate it in any way.
1-1
Section 1.04 Transfers to the Trust
I transfer to the Trustee the property listed in Schedule A, attached to this agreement, to be held
on the terms and conditions set forth in this instrument. I retain no right, title or interest in the
income or principal of this trust or any other incident of ownership in any trust property.
By execution of this agreement, my Trustee accepts and agrees to hold the trust property
described on Schedule A. All property, including life insurance policies, transferred to my trust
after the date of this agreement must be acceptable to my Trustee. My Trustee may refuse to
accept any property. My Trustee shall hold, administer and dispose of all trust property accepted
by my Trustee for the benefit of my beneficiaries in accordance with the terms of this agreement.
Section 1.05 Statement of My Intent
I am creating this trust with the intent that assets transferred to the trust be held for the benefit of
my trust beneficiaries on the terms and conditions set forth in this agreement. In order to
maximize the benefit to my trust beneficiaries, I give my Trustee broad discretion with respect to
the management, distribution and investment of assets in my trust. My specific objectives in
creating this trust include,but are not limited to,having:
Any gift made to the trust be treated as a completed gift for federal estate and gift
tax purposes;
Any gift made to the trust be treated as a gift of a present interest, if the gift is
subject to a beneficiary's right to withdraw as set forth in this agreement;
The assets of the trust estate, including life insurance proceeds, be excluded for
federal estate tax purposes from my gross estate and the gross estates of my trust
beneficiaries except to the extent I have explicitly granted a general power of
appointment to a trust beneficiary; and
The assets in this trust not be subject to the claims of any beneficiary's creditors.
All provisions of this agreement shall be construed so as to accomplish these objectives. Any
beneficiary has the right at any time to release, renounce or disclaim any right, power or interest
that might be construed or deemed to defeat these objectives.
Section 1.06 My Beneficiaries
I have four children. Their names are:
Clark M. Sprague;
Oren D. Sprague;
Alexander P. Sprague; and
Patricia A. Sprague.
All references in this agreement to"my children"are references to these children.
References in this agreement to "my descendants" are references to my children and their
descendants.
The"lifetime beneficiaries"of my trust are my descendants.
1-2
Article Two
Trustee Succession Provisions
Section 2.01 Resignation of a Trustee
A Trustee may resign by giving notice to me. if I am deceased, a resigning Trustee shall give
notice to the income beneficiaries of the trust and to any other Trustee then serving.
Section 2.02 Trustee Succession
This Section shall govern the removal and replacement of my Trustees.
(a) Removal and Replacement by Me
I may remove any Trustee, with or without cause, provided I appoint an
individual or corporate fiduciary as successor Trustee that simultaneously
commences service as Trustee and that is not related or subordinate to me within
the meaning of Section 672(c)of the Internal Revenue Code.
(b) Appointment of Successor Trustees
If either Clark M. Sprague or Alexander P. Sprague shall cease to serve, the other
shall serve as sole successor Trustee. If both Clark M. Sprague and Alexander P.
Sprague are unable or unwilling to serve as Trustee, either may appoint, by
written instrument, an individual or corporate fiduciary to serve as successor
Trustee. The Trustee so appointed may not be related or subordinate to the
appointing Trustee within the meaning of Section 672(c) of the Internal Revenue
Code.
(c) Trustees of the Separate Trusts
Upon the creation of the separate trusts as provided in Article Four, the primary
beneficiary of a separate trust, upon attaining the age of thirty (30) years, may
appoint himself or herself as a Co-Trustee of his or her separate trust to serve with
the then serving Trustee. At any time a beneficiary is serving as Co-Trustee of his
or her trust,there must be at least one other Trustee serving with the beneficiary.
(d) Removal by Beneficiaries
If I am incapacitated and following my death, a majority of the income
beneficiaries who have attained the age of thirty(30)years may remove a Trustee
with or without cause.
A Trustee may be removed under this subsection only if, on or before the
effective date of removal, the person or persons having the right of removal
appoint an individual or a corporate fiduciary that simultaneously commences
service as Trustee. The Trustee so appointed may not be related or subordinate to
the person or persons having the right of removal within the meaning of Section
672(c)of the Internal Revenue Code.
If a beneficiary is incapacitated, the legal representative of the beneficiary, other
than me,may act on behalf of the beneficiary.
2-1
(e) Default of Designation
If the office of Trustee of a trust created under this agreement is vacant and no
designated Trustee is able and willing to act, I must appoint an individual or
corporate fiduciary as successor Trustee that is not related or subordinate to me
within the meaning of Section 672(c) of the Internal Revenue Code. If I am
incapacitated or deceased, a majority of the income beneficiaries of the trust who
have attained the age of thirty (30) years may appoint an individual or corporate
fiduciary to serve as successor Trustee. In the case of an incapacitated
beneficiary, the legal representative of such beneficiary, other than me, may act
on behalf of such beneficiary.
Any beneficiary or his or her legal representative may petition a court of
competent jurisdiction to appoint a successor Trustee to fill any vacancy
remaining unfilled after a period of thirty (30) days. By making such
appointment, such court shall not thereby acquire any jurisdiction over the trust,
except to the extent necessary for making such appointment.
I may not serve as Trustee of any trust created under this agreement at any time.
Section 2.03 Notice of Removal and Appointment
Notice of removal shall be in writing and shall be delivered to the Trustee being removed, along
with any other Trustees then serving. The notice of removal shall be effective in accordance
with its provisions.
Notice of appointment shall be in writing and shall be delivered to the successor Trustee and any
other Trustees then serving. The appointment shall become effective at the time of acceptance
by the successor Trustee. A copy of the notice shall be attached to this agreement.
Section 2.04 Appointment of a Co-Trustee
Any individual Trustee may appoint an individual or a corporate fiduciary as a Co-Trustee. A
Co-Trustee so named shall serve only as long as the Trustee who appointed such Co-Trustee(or,
if such Co-Trustee was named by more than one Trustee acting together, by the last to serve of
such Trustees) serves, and such Co-Trustee shall not become a successor Trustee upon the death,
resignation, or incapacity of the Trustee who appointed such Co-Trustee, unless so appointed
under the terns of this agreement. Although such Co-Trustee may exercise all the powers of the
appointing Trustee, the combined powers of such Co-Trustee and the appointing Trustee shall
not exceed the powers of the appointing Trustee alone. The Trustee appointing a Co-Trustee
may revoke the appointment at any time with or without cause.
Section 2.05 Corporate Fiduciaries
Any corporate fiduciary serving under this agreement as a Trustee must be a bank or trust
company that is qualified to act as a fiduciary under applicable federal and state law and that is
not related or subordinate to any beneficiary within the meaning of Section 672(c)of the Internal
Revenue Code.
Such corporate fiduciary shall:
2-2
Have a combined capital and surplus of at least Two Hundred Fifty Million
($250,000,000.00)Dollars; or
Maintain in force a policy of insurance with policy limits of not less than Two
Hundred Fifty ($250,000,000.00) Million Dollars covering the errors and
omissions of my Trustee with a solvent insurance carrier licensed to do business
in the state in which my Trustee has its corporate headquarters; or
Have at least One Billion ($1,000,000,000.00) Dollars in assets under
management.
Section 2.06 Incapacity of a Trustee
If any individual Trustee becomes incapacitated, it shall not be necessary for the incapacitated
Trustee to resign as Trustee. A written declaration of incapacity by the Co-Trustee, if any, or, if
none, by the party designated to succeed the incapacitated Trustee, if made in good faith and if
supported by a written opinion of incapacity by a physician who has examined the incapacitated
Trustee, will terminate the trusteeship. If the Trustee designated in the written declaration
refuses to sign the necessary medical releases needed to obtain the physician's written opinion of
incapacity within 10 days of a request to do so,the trusteeship will be terminated.
Section 2.07 Appointment of Independent Special Trustee
If for any reason the Trustee of any trust created under this agreement is unwilling or unable to
act with respect to any trust property or any provision of this agreement, my Trustee shall
appoint, in writing, a corporate fiduciary or an individual to serve as an Independent Special
Trustee as to such property or with respect to such provision. The Independent Special Trustee
appointed shall not be related or subordinate to me while alive or to any beneficiary of the trust
within the meaning of Section 672(c)of the Internal Revenue Code.
An Independent Special Trustee shall exercise all fiduciary powers granted by this agreement
unless expressly limited elsewhere in this agreement or by the Trustee in the instrument
appointing the Independent Special Trustee. An Independent Special Trustee may resign at any
time by delivering written notice of resignation to the Trustee. Notice of resignation shall be
effective in accordance with the terms of the notice.
Section 2.08 Rights and Obligations of Successor Trustees
Each successor Trustee serving under this agreement, whether corporate or individual, shall have
all of the title, rights, powers and privileges granted to the initial Trustee named under this
agreement. In addition, each successor Trustee shall be subject to all of the restrictions imposed
upon, as well as all obligations and duties, both discretionary and ministerial, given to the initial
Trustee named under this agreement.
2-3
Article Three
Administration During My Lifetime
During my lifetime, my Trustee shall administer the trust as provided in this Article.
Section 3.01 Beneficiaries' Right to Withdraw Contributions
Immediately following a contribution to the trust, each living lifetime beneficiary, not excluded
under Section 3.02, (referred to in this Article as a "demand right beneficiary") shall have the
absolute present right to withdraw the lesser of:
A proportionate share of the total amount of the contribution, determined by
dividing the amount of the contribution by the number of demand right
beneficiaries; or
The amount of the federal gift tax annual exclusion under Section 2503(b) of the
Internal Revenue Code less the amount of prior annual exclusion gifts to the
demand right beneficiary by the same donor during the same calendar year.
The withdrawal right shall be subject to the limitations and qualifications as provided in
subsequent provisions of this Article.
Section 3.02 Power to Limit or Exclude Beneficiaries'Withdrawal Rights
Prior to or concurrent with the making of a contribution to the trust, a donor may, by a written
instrument delivered to my Trustee, limit or exclude one or more lifetime beneficiaries from
having withdrawal rights over all or any portion of the contribution or any future contribution or
both. A donor may not,however, limit or alter any rights resulting from prior contributions.
Section 3.03 Exercise of Right to Withdraw by Lifetime Beneficiaries
A beneficiary holding a withdrawal right may exercise that right by a written request delivered to
my Trustee. If a demand right beneficiary is unable to exercise a right to withdraw because of
minority or incapacity, that beneficiary's parent or legal representative may exercise the right to
withdraw. If there is no legal representative, my Trustee will designate an appropriate adult
individual who may exercise the beneficiary's right to withdraw. Under no circumstances may a
person who has contributed property to the trust or may I exercise any beneficiary's right to
withdraw.
Any property distributed to the legal representative of a minor or incapacitated beneficiary or
individual designated to make the withdrawal on behalf of the beneficiary must be held for the
use and benefit of the beneficiary and may not be used by the person who exercised the
withdrawal right on behalf of the beneficiary to discharge that person's legal obligation of
support. My Trustee may pay any money or property distributed to a minor pursuant to the
exercise of a right to withdraw to a custodian for such minor under the Uniform Transfers to
Minors Act or Uniform Gifts to Minors Act of any state.
3-1
Section 3.04 Notice by My Trustee of the Right to Withdraw
Following any contribution to the trust, my Trustee shall promptly notify each demand right
beneficiary or the person authorized to exercise the demand right beneficiary's right to withdraw
of the existence of the right to withdraw and the conditions under which the right may be
exercised.
Section 3.05 Lapse of Right to Withdraw
Each demand right beneficiary's withdrawal right shall lapse thirty(30) calendar days following
the notice by my Trustee of the contribution to which it relates, whether or not such lapse occurs
within the same calendar year in which the contribution was made. The amount of withdrawal
rights held by a demand right beneficiary that shall lapse in any calendar year,however,shall not
exceed the maximum amount under Section 2514(e) of the Internal Revenue Code to which the
lapse of the power to withdraw is not considered a release of the power to withdraw.
That portion of a withdrawal power held by a demand right beneficiary, the lapse of which
would exceed this limitation, shall continue to be exercisable, and shall lapse to the greatest
extent possible within this limitation on February I of each year in which it remains exercisable.
A demand right beneficiary's vested withdrawal right shall not terminate by reason of his or her
death. The personal representative of the demand right beneficiary's estate shall have the right to
exercise the vested withdrawal right on behalf of the demand right beneficiary's estate.
If the personal representative of a deceased demand right beneficiary does not exercise the
withdrawal right, my Trustee may distribute to the personal representative cash or other property
in an amount equal to the unlapsed vested withdrawal amount.
Following my death, a demand right beneficiary's right of withdrawal shall continue against any
subsequent trust shares established after my death, until such withdrawal right is exercised or
lapses in accordance with the terms of this Article.
Section 3.06 Satisfaction of Demand Right by My Trustee
My Trustee may satisfy a demand right beneficiary's exercise of a withdrawal right by
distributing cash,other assets or fractional interests in other assets, as my Trustee may determine
to be appropriate. Unless my Trustee has actual knowledge of other annual exclusion gifts prior
to making distributions to satisfy a demand right beneficiary's exercise of his or her demand
right, my Trustee may assume that no other gifts have been made to the demand right
beneficiary.
My Trustee shall retain sufficient cash or other assets or a line of credit against which to borrow,
or a combination thereof in order to satisfy the withdrawal rights that are then outstanding. I
grant a line of credit to my Trustee to borrow from me, at the applicable federal rate, for a period
of up to one day less than three years, such amounts as may be necessary to satisfy withdrawal
rights that are exercised to the extent that other property is not available to satisfy the withdrawal
rights.
Section 3.07 Definition of Contribution
For purposes of this Article, "contribution" means any cash or other assets transferred to the
Trustee to be held as part of the trust funds, in a manner that constitutes a gift for Federal gift tax
3-2
purposes. If a premium on a life insurance policy owned by the trust is paid, in whole or in part,
from assets that are not owned by the trust,the payment is deemed a contribution to the trust, and
generates a withdrawal right. The payment will be deemed a contribution on the date that the
premium was paid. The amount of a contribution is its Federal gift tax value.
Section 3.08 Discharge of My Trustee Upon a Distribution
The receipt of a distribution by a beneficiary or the beneficiary's legal representative to whom
my Trustee makes a distribution in satisfaction of the exercise of a demand right, shall be a
sufficient discharge of my Trustee to the extent of the payment or distribution. My Trustee shall
have no duty to see to the actual application of amounts so paid or distributed for the benefit of
the beneficiary.
Section 3.09 Distribution of Income and Principal
During my lifetime, my Trustee shall retain all property held under this agreement in a single
trust for the benefit of the trust beneficiaries. Subject to the limitation that my Trustee at all
times retain sufficient property in the trust to satisfy a pending right to withdraw set forth in
Section 3.06,my Trustee shall administer the trust as follows:
(a) Distribution of Income and Principal to the Lifetime
Beneficiaries
My Trustee, other than an Interested Trustee, may distribute to any one or more of
the lifetime beneficiaries as much of the net income and principal of the trust
property as my Trustee may determine advisable for any purpose. If my Trustee
is an Interested Trustee, my Trustee shall distribute to any one or more of the
lifetime beneficiaries as much of the income and principal of the common trust as
my Trustee determines is necessary or advisable for their health, education,
maintenance and support. In making distributions under this Section, my Trustee
may, but need not, take into consideration any income or other resources that are
available to the lifetime beneficiaries outside of the trust and are known to my
Trustee.
A distribution to or for the benefit of a lifetime beneficiary shall be charged to the
trust as a whole rather than against the lifetime beneficiary's ultimate share. If,
however,a distribution of principal is made to a lifetime beneficiary then having a
power of withdrawal, such distribution shall be deemed an exercise of the power
to withdraw to the extent of the distribution and shall reduce the amount subject to
the power to withdraw by the amount of the distribution.
Any net income not distributed by my Trustee shall be accumulated and added to
the principal of the trust.
(b) Distributions According to Needs
My Trustee may make distributions to or for the benefit of one or more trust
beneficiaries to the complete exclusion of the other beneficiaries. My Trustee
may make distributions to beneficiaries in equal or unequal amounts according to
their respective needs.
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(c) Discharge of a Legal Obligation
No payment or distribution shall be made by my Trustee for the discharge of any
of my legal obligations, or otherwise for my monetary benefit.
Section 3.10 Lifetime Limited Power of Appointment
During my lifetime, my Trustee, other than an Interested Trustee, may appoint all or part of the
principal of the trust (excluding any principal subject to a withdrawal right granted under this
Article) to or among one or more persons or entities subject to the limitations set forth in this
Section. The Trustee may not exercise this power in a manner that would give me or the Trustee
any pecuniary benefit or would discharge or satisfy our respective legal obligations.
The Trustee may not exercise this lifetime limited power of appointment to appoint to the
Trustee, the Trustee's estate, the Trustee's creditors, or the creditors of the Trustee's estate.
I intend that this lifetime power of appointment be a limited power of appointment and not a
general power of appointment as defined in Section 2441 of the Internal Revenue Code.
Section 3.11 Administration Upon My Death
Upon my death, my Trustee shall administer the remaining trust property as provided in the
Articles that follow.
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Article Four
Administration of Remaining Trust Property
My Trustee shall administer the remaining trust property as provided in this Article.
Section 4.01 Division of Remaining Trust Property
My Trustee shall divide the remaining trust property into separate shares for my descendants,per
stirpes.
My Trustee shall administer the share for each descendant in a separate trust for the benefit of
the descendant as provided below.
Section 4.02 Administration of the Separate Trusts
My Trustee shall administer the trust for each descendant as follows:
(a) Distributions of Income and Principal
My Trustee shall distribute to, or apply for the benefit of, the beneficiary and the
beneficiary's descendants as much of the income and principal of the
beneficiary's trust as my Trustee determines is necessary or advisable for their
health, education, maintenance and support. Notwithstanding the foregoing, my
Trustee shall make all distributions to, or for the benefit of, a beneficiary's
descendants from the portion of the beneficiary's trust that has an inclusion ratio,
for generation-skipping transfer tax purposes, of zero. My Trustee shall obtain
the written consent of a beneficiary prior to making any distributions to, or for the
benefit of,the beneficiary's descendants.
In making distributions my Trustee shall give principal consideration to the needs
of the beneficiary for whom the trust is created and only thereafter to the needs of
the beneficiary's descendants.
Any undistributed net income shall be accumulated and added to principal.
Upon a beneficiary attaining the age of twenty-five (25) years, my Trustee shall
distribute the net income of the beneficiary's trust to the beneficiary in convenient
installments,but at least annually.
(b) Guidelines for Discretionary Distributions
In making discretionary distributions to the beneficiaries of the trust, it is my
desire to provide for their well-being and happiness. Although I request that my
Trustee consider the other known resources available to the beneficiaries before
making distributions, I also request that my Trustee be liberal in making any
distributions to, or for the benefit of, the beneficiaries. I acknowledge that the
principal of the nonexempt trust established for the beneficiary may be exhausted
in making such distributions.
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(c) Right to Withdraw Principal
Upon a beneficiary attaining the age of thirty (30) years, the beneficiary shall
have the right, exercisable by written request to my Trustee before the close of
each calendar year,to withdraw either in cash or in kind:
An amount from the principal of the beneficiary's trust not
exceeding the amount referred to in Section 2514(e)(1) of the
Internal Revenue Code (currently Five Thousand ($5,000.00)
Dollars); and
If the beneficiary is living on the last day of the calendar year, that
percentage referred to in Section 2514(e)(2) of the Code (currently
Five (5%) Percent) of the current fair market value of the principal
of the beneficiary's trust that exceeds the amounts previously
withdrawn by the beneficiary during the calendar year under this
paragraph.
The amount referenced by Section 2514(e)(1) of the Internal Revenue Code must
be determined by taking into account all other powers of withdrawal exercised by
the beneficiary that must be aggregated under Section 2514(e)(1) of the Code in
determining the largest lapse that can occur without being treated as a release.
This right of withdrawal shall be noncumulative and shall lapse if not exercised
during the calendar year.
My Trustee shall distribute the requested property to the beneficiary outright, free
from trust.
(d) Lifetime Limited Power of Appointment
During the beneficiary's lifetime, my Trustee shall distribute as much of the
principal of the beneficiary's trust to or among one or more persons or entities as
the beneficiary from time to time directs in writing; provided, however, that the
beneficiary has attained the age of thirty-five(35) years. The beneficiary may not
exercise this power for the purpose of discharging his or her legal obligations or
otherwise for his or her pecuniary benefit.
The beneficiary may not exercise this lifetime limited power of appointment to
appoint to himself or herself, his or her estate, his or her creditors, or the creditors
of his or her estate. I intend that this lifetime power of appointment be a limited
power of appointment and not a general power of appointment as defined in
Section 2041 of the Internal Revenue Code.
(e) Distribution Upon the Death of the Beneficiary
Subject to the terms of the next paragraph, the beneficiary shall have the
testamentary general power to appoint all or any portion of the principal and
undistributed income remaining in the beneficiary's trust at the beneficiary's
death among one or more persons or entities and the creditors of the beneficiary's
estate. The beneficiary shall have the sole and exclusive right to exercise this
general power of appointment.
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The beneficiary may not exercise this power of appointment to appoint to himself,
his or her estate, his or her creditors, or creditors of his or her estate from the
limited share of the beneficiary's trust. For purposes of this power of
appointment, the "limited share" of the beneficiary's trust is that portion of the
beneficiary's trust that has an inclusion ratio for generation-skipping transfer tax
purposes of zero or which, in the absence of the exercise of the power of
appointment, would not constitute a taxable generation-skipping transfer at the
beneficiary's death. If the generation-skipping tax does not then apply, the
limited share shall be the beneficiary's entire trust.
Insofar as any part of the beneficiary's trust shall not be effectively appointed,my
Trustee shall distribute the remaining unappointed balance per stirpes in trusts to
the descendants of the beneficiary. If the beneficiary has no living descendants,
my Trustee shall distribute the balance of the trust property per stirpes in trusts to
my descendants. My Trustee shall administer the trusts under the same provisions
as the beneficiary's trust.
If I have no living descendants,my Trustee shall distribute the balance of the trust
property as provided in Article Five.
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Article Five
Remote Contingent Distribution
If,at any time,there is no person or entity qualified to receive final distribution of the trust estate
or any part of it, then my Trustee shall distribute the portion of my trust estate with respect to
which the failure of qualified recipients has occurred to those persons who would inherit it had I
then died intestate owning the property, as determined and in the proportions provided by the
laws of the Commonwealth of Pennsylvania then in effect.
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Article Six
Administration of Trusts for Underage and Incapacitated
Beneficiaries
Section 6.01 Distributions for Underage and Incapacitated Beneficiaries
If under another provision of this agreement any part of the trust property is required to be
distributed outright, or if a distribution is required to be made, to a person when that person has
not yet attained the age of twenty-one (21) years, or at a time when that person is incapacitated
and in the opinion of my Trustee is unable to manage the distribution properly, my Trustee may
distribute or retain the trust property in any one or more of the following methods described in
this Article.
I request,but do not require,that before making a distribution to a beneficiary,my Trustee, to the
extent that it is both reasonable and possible, consider the ability the beneficiary demonstrated in
managing prior distributions of trust property.
Section 6.02 Methods of Distribution
My Trustee may distribute or retain trust property in any one or more of the following methods
for the benefit of any beneficiary subject to the provisions of this Article:
(a) Distribution to Beneficiary
My Trustee may distribute trust property directly to the beneficiary.
(b) Distribution to Guardian or Conservator or Family Member
My Trustee may distribute trust property to the beneficiary's guardian,
conservator, parent or a family member or other person who has assumed the
responsibility of caring for the beneficiary.
(c) Distribution to Custodian
My Trustee may distribute trust property to any person or entity, including my
Trustee, as custodian for the beneficiary under the Uniform Transfers to Minors
Act, or similar statute.
(d) Distribution to Other Persons or Entities
My Trustee may distribute trust property to other persons and entities for the use
and benefit of the beneficiary.
(e) Distribution to Agent under Durable Power of Attorney
My Trustee may distribute trust property to an agent or attorney-in-fact authorized
to act for the beneficiary under a legally valid durable power of attorney executed
by the beneficiary prior to the incapacity.
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(f) Retention in Trust
My Trustee may retain trust property in a separate trust for the benefit of the
beneficiary until the beneficiary attains twenty-one (21) years of age or, in the
opinion of my Trustee,is no longer incapacitated(as the case may be).
My Trustee shall distribute as much of the net income and principal of any trust
created under this subsection that my Trustee deems necessary or advisable for
the health, education, maintenance and support of the beneficiary for whom the
trust was created. My Trustee shall accumulate any undistributed net income and
add such income to principal.
When the beneficiary for whom a trust is created under this subsection attains
twenty-one (21) years of age or is no longer incapacitated (as the case may be),
the beneficiary may withdraw from the trust at any time or times any portion or
all of the accumulated trust income and principal.
The beneficiary for whom a trust is created under this subsection shall have the
testamentary general power to appoint all or any portion of the principal and
undistributed income remaining in the beneficiary's trust at his or her death
among one or more persons or entities,including the creditors of the beneficiary's
estate. The beneficiary shall have the sole and exclusive right to exercise this
general power of appointment.
I intend that this testamentary power of appointment be a general power of
appointment as defined in Section 2041 of the Internal Revenue Code.
If the beneficiary fails to validly exercise this testamentary general power of
appointment, my Trustee shall distribute the balance of his or her trust property to
the then living descendants of the beneficiary,per stirpes.
If the beneficiary has no then living descendants, my Trustee shall distribute the
beneficiary's remaining trust property to my then living descendants,per stirpes.
If I have no then living descendants, my Trustee shall distribute the remaining
trust property as provided in Article Five.
Section 6.03 Application of Article
Any decision made by my Trustee under this Article shall be final, controlling and binding upon
all beneficiaries subject to the provisions of this Article.
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Article Seven
Trust Administration
The terms of this trust agreement prevail over any provision of Pennsylvania law, except those
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provisions that are mandatory and may not be waived.
Section 7.01 Distributions to Beneficiaries
Whenever this agreement authorizes or directs the Trustee to make a distribution of net income
or principal to a beneficiary, the Trustee may apply for the benefit of the beneficiary any
property that otherwise could be distributed directly to the beneficiary. The Trustee shall have no
responsibility to inquire into the beneficiary's ultimate disposition of the distributed property
unless specifically directed otherwise by this agreement.
The Trustee may make distributions in cash or in kind, or partly in each, in proportions and at
values determined by the Trustee. The Trustee may allocate undivided interests in specific assets
to a beneficiary or trust in any proportion or manner that the Trustee determines, even though the
i property allocated to one beneficiary may be different from that allocated to another beneficiary.
The Trustee may make these determinations without regard to the income tax attributes of the
property and without the consent of any beneficiary.
Section 7.02 No Court Proceedings
This trust shall be administered expeditiously, consistent with the provisions of this agreement,
free of judicial intervention, and without order, approval or action of any court. The trust shall be
subject to the jurisdiction of a court only if my Trustee or another interested party institutes a
legal proceeding. A proceeding to seek instructions or a court determination shall be initiated in
the court having original jurisdiction over matters relating to the construction and administration
of trusts. Seeking instructions or a court determination shall not subject this trust to the
continuing jurisdiction of the court.
Section 7.03 No Bond
No Trustee is required to furnish any bond for the faithful performance of the Trustee's duties,
unless required by a court of competent jurisdiction and only if the court finds that a bond is
needed to protect the interests of the beneficiaries. No surety will be required on any bond
required by any law or rule of court, unless the court specifies that a surety is necessary.
Section 7.04 Exoneration of My Trustee
No successor Trustee is obligated to examine the accounts, records or actions of any previous
Trustee or of the personal representative of my estate. No successor Trustee shall be in any way
or manner responsible for any act or omission to act on the part of any previous Trustee or the
personal representative of my estate. Unless a Trustee has received notice of removal, the
Trustee shall not be liable to me or to any beneficiary for the consequences of any action taken
by the Trustee that would have been, but for the prior removal of the Trustee, a proper exercise
by the Trustee of the authority granted to the Trustee under this agreement.
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Any Trustee may request and obtain from the beneficiaries or from their legal representatives,
agreements in writing releasing the Trustee from any liability that may have arisen from the
Trustee's acts or omissions to act and indemnifying the Trustee from liability for the acts or
omissions. An agreement described in this paragraph, if acquired from all the living beneficiaries
of the trust or from their legal representatives, shall be conclusive and binding upon all parties,
born or unborn, who may have, or may in the future acquire, an interest in the trust.
My Trustee may require a refunding agreement before making any distribution or allocation of
trust income or principal and may withhold distribution or allocation pending determination or
release of a tax lien or other lien.
Section 7.05 Trustee Compensation
An individual serving as Trustee shall be entitled to fair and reasonable compensation for the
services rendered as a fiduciary. A corporate fiduciary serving as Trustee shall be compensated
by agreement with an individual Trustee or, in the absence of an individual Trustee or in the
absence of an agreement, in accordance with the corporate fiduciary's published schedule of fees
in effect at the time the services are rendered.
The Trustee may charge additional fees for services it provides that are not comprised within its
duties as Trustee such as fees for legal services, tax return preparation and corporate finance or
investment banking services.
In addition to receiving compensation, the Trustee may be reimbursed for reasonable costs and
expenses incurred in carrying out its duties under this agreement.
Section 7.06 Employment of Professionals
A Trustee may appoint, employ and remove, at any time and from time to time, investment
advisors, accountants, auditors, depositories, custodians, brokers, consultants, attorneys, expert
advisers, agents, and employees to advise or assist the Trustee in the performance of its duties.
The Trustee may act upon the recommendations of the persons or entities employed with or
without independent investigation.
The Trustee may reasonably compensate an individual or entity employed to assist or advise the
Trustee regardless of whether the person or entity shall be a Trustee of a trust established under
this agreement or a corporate affiliate of a Trustee and regardless of whether the entity shall be
one in which a Trustee of a trust created under this agreement is a partner, member, stockholder,
officer,director or corporate affiliate or has any other interest.
The Trustee may pay the usual compensation for services contracted for under this Section out of
principal or income of the trust as the Trustee may deem advisable. The Trustee may pay
compensation to an individual or entity employed to assist or advise the Trustee without
diminution of or charging the same against the compensation to which the Trustee is entitled
under this agreement. Any Trustee who shall be a partner, stockholder, officer, director or
corporate affiliate in any entity employed to assist or advise the Trustee shall nonetheless receive
the Trustee's share of the compensation paid to the entity.
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Section 7.07 Collection of Proceeds Upon the Death of an Insured
Upon the death of an insured under any policy of life insurance forming a part of the trust
principal, my Trustee shall make a reasonable effort to collect all sums payable directly to my
Trustee or the trust. My Trustee may exercise any of the options of settlement that may at any
time be available to my Trustee under the terms of any such policy. My Trustee shall not be
liable to any beneficiary for the settlement option ultimately selected.
My Trustee may refuse to enter into or maintain any proceeding, whether in law or equity,
administrative or otherwise, with respect to any life insurance policy, until my Trustee has been
indemnified to its satisfaction against all expenses and liabilities that, in my Trustee's judgment,
may be involved in the proceeding.
My Trustee is authorized to compromise and adjust claims arising out of any insurance policy
upon such terms and conditions, as my Trustee may deem prudent. The decisions of my Trustee
shall be conclusive on all persons.
Section 7.08 Insurance Carrier Protected in Dealing With My Trustee
An insurance carrier is entitled to presume that my Trustee is properly exercising its powers as
Trustee under this agreement when working with or assisting my Trustee in any transaction. The
insurance carrier and the insurance carrier's agents are not required to inquire into any of the
provisions of this agreement to determine if my Trustee has the power to act or is properly
exercising its power or see to my Trustee's application of any proceeds paid to my Trustee.
My Trustee's receipt of the insurance proceeds shall relieve the insurance carrier of any further
liability with respect to payment of the proceeds.
Section 7.09 Exercise of Power of Appointment
A power of appointment granted under this agreement may be exercised by valid Last Will and
Testament, valid revocable trust or by any other written instrument that specifically refers to the
power of appointment. The holder of a power of appointment may exercise the power to appoint
property among the permissible appointees in equal or unequal proportions, and on such terms
and conditions, whether outright or in trust, as the holder of the power designates. The holder of
a power of appointment may grant further powers of appointment to any person to whom
principal may be appointed, including a presently exercisable limited or general power of
appointment.
My Trustee may conclusively presume that any power of appointment granted to any beneficiary
of a trust created under this agreement has not been exercised by the beneficiary if my Trustee
has no knowledge of the existence of a valid Last Will and Testament, valid revocable trust or by
any other written instrument exercising the power within three(3)months after the beneficiary's
death.
Section 7.10 Determination of Principal and Income
My Trustee may determine in a fair, equitable and practical manner how all Trustee's fees,
disbursements, receipts, and wasting assets shall be credited, charged, and apportioned between
principal and income.
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My Trustee may set aside from trust income reasonable reserves for taxes, assessments,
insurance premiums, repairs, depreciation, obsolescence, depletion, and for the equalization of
payments to or for the beneficiaries. My Trustee may select appropriate accounting periods with
regard to the trust property.
Section 7.11 Trust Accounting
Except to the extent required by law, my Trustee is not required to file accountings in any
jurisdiction. Upon the written request of a Qualified Beneficiary of a trust created under this
agreement, my Trustee must render an accounting to the Qualified Beneficiaries of that trust
during the accounting period that includes the date of the written request.
The accounting must include the receipts, expenditures, and distributions from the trust for
which the accounting is prepared occurring during the accounting period. If a tax return is
prepared for a trust during a period for which a trust accounting is made, the Trustee's
accounting must include a copy of that tax return. If there is no tax return prepared for the
accounting period, the Trustee's accounting must include a balance sheet itemizing the trust
property and my Trustee's reasonable estimation of the value of the assets held in the trust as of
the date the accounting is completed.
In the absence of fraud or manifest error, the assent by all Qualified Beneficiaries to a Trustee's
accounting will make the matters disclosed in the accounting binding and conclusive upon all
persons, including those living on the date of this agreement and those to be born in the future
who have, or will in the future have, a vested or contingent interest in the trust property. In the
case of a Qualified Beneficiary who is a minor or who is incapacitated, that beneficiary's natural
guardian or legal representative may give the assent required under this Section.
Section 7.12 Information to Beneficiaries
My beneficiaries' privacy is important to me. This section establishes my Trustee's duties to
inform, account, and report to beneficiaries of various trusts created under this agreement, and to
other individuals during the term of any trust created under this agreement. Except to the extent
required by law, my Trustee is not required to comply with a request to furnish a copy of this
trust agreement to a Qualified Beneficiary at any time, and my Trustee is not required to send
annual reports or reports upon termination of the trust to any Permissible Distributee or Qualified
Beneficiary who requests the report. If my Trustee decides, in my Trustee's sole and absolute
discretion, to provide any information to a Permissible Distributee or Qualified Beneficiary, my
Trustee may exclude any information that my Trustee determines is not directly applicable to the
beneficiary receiving the information. Any decision by my Trustee to make information
available to any beneficiary does not constitute an obligation to provide any information to any
beneficiary in the future.
Section 7.13 Action of Trustees; Disclaimer
If two Trustees are eligible to act with respect to a given matter, the concurrence of both shall be
required for action to be taken; if more than two Trustees are eligible to act with respect to a
given matter, the concurrence of a majority of my Trustees shall be required for action to be
taken.
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A nonconcurring Trustee may dissent or abstain from a decision of the majority. A Trustee shall
be absolved from personal liability by registering its dissent or abstention in the records of the
trust. After doing so, the dissenting Trustee shall then act with my other Trustees in any way
necessary or appropriate to effectuate the decision of the majority.
Notwithstanding any provision of this agreement to the contrary, any Trustee may disclaim or
release, in whole or in part, by an instrument in writing, any power it holds as Trustee,
irrevocably or for any period of time that the Trustee may specify. The Trustee may make the
relinquishment of a power personal to the Trustee or may relinquish the power for all subsequent
Trustees.
Section 7.14 Delegation of Trustee Authority; Power of Attorney
Subject to the limitations set forth in Section 8.19, any Trustee may, by an instrument in writing,
delegate to any other Trustee the right to exercise any power (including a discretionary power)
granted my Trustee in this agreement. During the time a delegation under this Section is in
effect, the Trustee to whom the delegation was made may exercise the power to the same extent
as if the delegating Trustee had personally joined in the exercise of the power. The delegating
Trustee may revoke the delegation at any time by giving written notice of revocation to the
Trustee to whom the power was delegated.
My Trustee may execute and deliver a revocable or irrevocable power of attorney granting any
individual or entity the power to transact any and all business on behalf of my trust or any other
trust created under this agreement. The power of attorney may grant to the attorney-in-fact all of
the rights,powers, and discretion that my Trustee is entitled to exercise under this agreement.
Section 7.15 Additions to Separate Trusts
If upon the termination of any trust created under this agreement a final distribution is to be
made to a person who is the only beneficiary of another trust created under this agreement, my
Trustee shall make the distribution to the second trust instead of distributing the property to the
beneficiary outright. For purposes of administration, my Trustee shall treat the distribution as
though it had been an original part of the second trust.
Section 7.16 Authority to Merge or Sever Trusts
My Trustee may merge and consolidate a trust created under this agreement with any other trust,
if the two trusts contain substantially the same terms for the same beneficiaries and at least one
Trustee in common.
My Trustee may administer the merged and consolidated trust as a single trust or unit. If,
however, a merger or consolidation does not appear feasible, my Trustee may consolidate the
assets of the trusts for purposes of investment and trust administration while retaining separate
records and accounts for each respective trust.
My Trustee may sever any trust on a fractional basis into two or more separate and identical
trusts or may segregate a specific amount or asset from the trust property by allocation to a
separate account or trust. The separate trusts may be funded on a non pro rata basis provided that
funding is based on the total fair market value of the assets on the date of funding. Income
earned on a segregated amount or specific asset after the segregation passes with the amount or
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asset segregated. My Trustee shall hold and administer each separate trust upon terms and
conditions substantially identical to those of the trust from which it was severed.
Subject to the terms of this agreement, my Trustee may consider differences in federal tax
attributes and other pertinent factors in administering the trust property of any separate account
or trust, in making applicable tax elections, and in making distributions. A separate trust created
by severance must be treated as a separate trust for all purposes from the date on which the
severance is effective; however, the effective date of severance may be retroactive to a date
before the date on which my Trustee exercises the power.
Section 7.17 Authority to Terminate Trusts
If, at any time, my Trustee, other than an Interested Trustee, in its sole and absolute discretion,
determines that any trust created under this agreement is no longer economical or is otherwise
inadvisable to administer as a trust,or if my Trustee,other than an Interested Trustee,deems it to
be in the best interest of my beneficiaries, my Trustee, without further responsibility, may
terminate the trust and distribute the trust property, including any undistributed net income, in
the following order of priority:
To the beneficiaries then entitled to mandatory distributions of net income of the
trust and in the same proportions; and
If none of the beneficiaries are entitled to mandatory distributions of net income,
to the beneficiaries then eligible to receive discretionary distributions of net
income of the trust, in such amounts and shares as my Trustee, other than an
Interested Trustee,may determine.
Section 7.18 Merger of Corporate Fiduciary
If any corporate fiduciary acting as my Trustee under this agreement is merged with or transfers
substantially all of its trust assets to another corporation or if a corporate fiduciary changes its
name, the successor shall automatically succeed to the trusteeship as if originally named a
Trustee. No document of acceptance of trusteeship shall be required.
Section 7.19 Beneficiary's Status
Until a Trustee receives notice of the incapacity,birth,marriage, death or other event upon which
a beneficiary's right to receive payments may depend, the Trustee shall not be liable for acting or
failing to act with respect to the event or for disbursements made in good faith to persons whose
interest may have been affected by such event. Unless otherwise provided in this agreement, the
parent or legal representative may act on behalf of a beneficiary who is a minor or is
incapacitated.
The Trustee may rely on any information provided by a beneficiary with respect to the
beneficiary's assets and income. The Trustee shall have no independent duty to investigate the
status of any beneficiary and shall not incur any liability for failure to do so.
Section 7.20 Discharge of Third Persons
Persons dealing in good faith with a Trustee shall not be required to see to the proper application
of money paid or property delivered to the Trustee, or to inquire into the authority of the Trustee
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as to any transaction. The receipt from the Trustee for any money or property paid,transferred or
delivered to the Trustee shall be a sufficient discharge to the person or persons paying,
transferring or delivering the money or property from all liability in connection with its
application.
Section 7.21 Certificate by Trustee
A written statement of my Trustee may always be relied upon by, and shall always be conclusive
evidence in favor of, any transfer agent or any other person dealing in good faith with my
Trustee in reliance upon the statement.
Section 7.22 Funeral and Other Expenses of Beneficiary
Upon the death of an income beneficiary a Trustee may pay the funeral expenses, burial or
cremation expenses, enforceable debts and other expenses incurred due to the death of the
beneficiary from trust property. This Section shall only apply to the extent the income
beneficiary has not exercised any testamentary power of appointment granted to him under this
agreement.
The Trustee may rely upon any request by the personal representative or members of the family
of the deceased beneficiary for payment without verifying the validity or the amounts and
without being required to see to the application of the amounts so paid. The Trustee may make
decisions under this Section without regard to any limitation on payment of expenses imposed by
statute or rule of court and may be made without obtaining the approval of any court having
jurisdiction over the administration of the deceased beneficiary's estate.
Section 7.23 Generation-Skipping Transfer Tax Provisions
Notwithstanding any other provision of this agreement to the contrary, if a trust created under
this agreement would be partially exempt from generation-skipping transfer tax after the
intended allocation of a GST exemption to the trust then:
(a) Division into Exempt and Nonexempt Trusts
My Trustee may divide the property of the trust into two separate trusts so that the
allocation of GST exemption can be made to a trust that will be entirely exempt
from generation-skipping transfer tax (the "exempt trust"). The exempt trust shall
consist of the largest fractional share of the total trust assets that will permit the
exempt trust to be entirely exempt from generation-skipping transfer tax. The
"nonexempt trust" shall consist of the balance of the total trust assets. For
purposes of computing the fractional share, asset values as finally determined for
federal estate tax purposes shall be used. The fraction shall be applied to the
assets at their actual value on the effective date or dates of distribution so that the
actual value of the fractional share resulting from the application of such fraction
will include fluctuations in the value of the trust property.
(b) Administration of the Trusts
The trusts created under this Section shall have the same terms as the original
trust. To the extent possible, distributions to a non-skip person as defined by
Section 2613 of the Internal Revenue Code shall be made from a nonexempt trust
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and distributions to a skip person as defined by Section 2613 shall be made from
an exempt trust.
My Trustee shall administer each exempt and nonexempt trust as a separate and
independent trust.
Any exempt or nonexempt trust established under this agreement may be referred
to by the name designated by my Trustee.
If an exempt trust and a nonexempt trust are further divided under the terms of
this agreement, my Trustee may allocate property from the exempt trust first to
the trust from which a generation skipping transfer is more likely to occur.
(c) My Intent; Trust Additions
My intent is to minimize the application of the generation-skipping transfer tax to
the trust property but not to affect the total amount of trust property to which any
beneficiary may be entitled under this agreement. This agreement shall be so
construed and interpreted to give effect to this intent.
If at any time any property that has an inclusion ratio greater than zero for
generation-skipping transfer tax purposes would be added to a trust with property
that has an inclusion ratio of zero, then my Trustee shall instead hold such
property in a separate trust on the same terms and conditions as the original trust.
(d) Independent Trustee May Confer Testamentary Power of
Appointment
My Trustee, excluding any Interested Trustee, may during the lifetime of the
beneficiary of the trust, grant the beneficiary a testamentary power to appoint all
or part of such beneficiary's trust or trust share to the creditors of the
beneficiary's estate. The Trustee granting the power of appointment may require,
as a condition for the beneficiary's exercise of such power, that the beneficiary
obtain the consent of such Trustee. Any testamentary power of appointment
granted by the Trustee shall be in writing and may be revoked at any time during
the lifetime of the beneficiary to whom the power was given. I suggest,but do not
require, that my Trustee exercise this authority to subject trust property to estate
tax instead of the generation-skipping transfer tax when it appears that it may
reduce overall taxes.
Section 7.24 Grantor Trust Provisions
I intend that this trust be a grantor trust for federal income tax purposes for those periods of time
during which I or any other person holds one or more of the powers described in Sections 671-
679 of the Internal Revenue Code, the effect of which is that I will be taxed on the income of my
trust. To carry out this intent, the following provisions shall apply in the administration of my
trust.
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(a) Power of Substitution
During my lifetime, I reserve the right to reacquire any trust property by
substituting other property of equivalent value. However, I may not exercise this
power with respect to any insurance policy on my life.
My Trustee has a fiduciary duty to determine whether the assets acquired and
substituted by me are in fact of equivalent value. If my Trustee determines that
the exercise of this power does not satisfy the terms of this agreement because the
acquired assets and substituted assets are not of equivalent value, then my Trustee
must obtain additional assets from me as necessary to overcome any shortfall.
I may not exercise this power in any manner that shifts benefits among the
beneficiaries. In consideration of this limitation,during any time I hold this power
of substitution:
No provision in this agreement may be construed in any manner
that limits my Trustee's power to reinvest trust corpus for the
benefit of the beneficiaries, and
My Trustee has a fiduciary duty to act impartially toward all trust
beneficiaries.
I may at any time, by written notice to my Trustee, release and relinquish this
right.
(b) Nonfiduciary Capacity
The powers described in this Section are exercisable solely in a nonfiduciary
capacity without approval or consent of any person acting in a fiduciary capacity.
No claim for breach of fiduciary duty may be imposed upon my Trust Protector,
my Trustee or any other person as a result of the exercise or nonexercise of the
powers granted under this Section.
Section 7.25 Authorization to Reimburse Me for Income Tax (Liability
My Trustee, other than an Interested Trustee, may distribute to me or my legal representative
income or principal of the trust sufficient to satisfy my personal income tax liability attributable
to the inclusion of all or part of the trust's income in my taxable income.
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Article Eight
My Trustee's Powers
Section 8.01 Introduction to Trustee's Powers
Except as otherwise specifically provided in this agreement, my Trustee may exercise, without
prior approval from any court, all the powers conferred by this agreement and any other powers
conferred by law, including, without limitation, those powers set forth under the common law or
statutory law of the Commonwealth of Pennsylvania or any other jurisdiction whose law applies
to this trust. The powers conferred upon my Trustee by law, including those powers conferred
by the Probate, Estates and Fiduciaries Code of the Commonwealth of Pennsylvania, shall be
subject to any express limitations or contrary directions contained in this agreement.
My Trustee shall exercise these powers in the manner my Trustee determines to be in the best
interests of the beneficiaries. My Trustee shall not exercise any of its powers in a manner that is
inconsistent with the right of the beneficiaries to the beneficial enjoyment of the trust property in
accordance with the general principles of the law of trusts.
The Trustee of a trust may have duties and responsibilities in addition to those described in this
agreement. I encourage my Trustee to obtain appropriate legal advice if my Trustee has any
questions concerning its duties and responsibilities as Trustee.
Section 8.02 Execution of Documents by My Trustee
My Trustee may execute and deliver any and all instruments in writing that my Trustee considers
necessary to carry out any of the powers granted in this agreement.
Section 8.03 Investment Powers in General
My Trustee may invest in any type of investment that my Trustee determines is consistent with
the investment goals of my trust, whether inside or outside the geographic borders of the United
States of America and its possessions or territories, taking into account my trust's overall
investment portfolio.
Without limiting my Trustee's investment authority in any way, I request that my Trustee
exercise reasonable care and skill in selecting and retaining trust investments. I also request that
my Trustee take into account the following factors in choosing investments for my trust:
The potential return from the investment, both in the form of income and
appreciation;
The potential income tax consequences of the investment;
The investment's potential for volatility; and
The role the investment will play in the trust's portfolio.
1 request that my Trustee, in arranging the investment portfolio of the trust, also consider the
possible effects of inflation or deflation, changes in global and U.S. economic conditions,
transaction expenses, and the trust's need for liquidity.
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My Trustee may delegate its discretion to manage trust investments to any registered investment
adviser or corporate fiduciary.
Section 8.04 Banking Powers
My Trustee may establish bank accounts of any type in one or more banking institutions that my
Trustee may choose. My Trustee may open accounts in the name of my Trustee(with or without
disclosing fiduciary capacity) or in the name of the trust. When an account is in the name of the
trust, checks on that account and authorized signatures need not disclose the fiduciary nature of
the account or refer to any trust or Trustee.
An account from which my Trustee makes frequent disbursements need not be an interest
bearing account. My Trustee may authorize withdrawals from an account by check, draft or
other instrument or in any other manner.
Section 8.05 Business Powers
My Trustee is authorized to serve as an officer, director,manager,or in any other capacity of any
proprietorship, partnership,joint venture, corporation, or other enterprise in which the trust has
an interest (whether or not such interest is total or controlling). My Trustee may receive
compensation for services.
My Trustee may contract with and otherwise deal with any such enterprise in the same manner as
it would with any enterprise in which the trust has no interest, and may use any voting power my
Trustee may have to implement its authority (whether as Trustee or as an officer, director, or
other official of the enterprise).
With respect to any units in a limited liability company, limited partnership, or stock in a closely-
held corporation("closely-held company")that are contributed to the trust, the powers granted to
my Trustee in this Article shall not disqualify my Trustee from acting personally and
independently, and not in a fiduciary capacity, with respect to any closely-held company, from
holding office in the closely-held company, from accepting remuneration from the closely-held
company, from voting any units or stock in favor of the Trustee as a director or officer of the
closely-held company, or from purchasing or selling units or stock of the closely-held company.
If any trust created under this agreement is funded with Subchapter S stock, my Trustee may
either elect to qualify the trust as a Qualified Subchapter S Trust ("QSST") under Section
1361(d)(3) of the Internal Revenue Code or as an Electing Small Business Trust under Section
1361(e)(1) of the Code, and then to administer the trust in accordance with the requirements of
the corresponding Section.
Section 8.06 Contract Powers
My Trustee may sell at public or private sale, transfer, exchange for other property, and
otherwise dispose of trust property for consideration and upon terms and conditions that my
Trustee deems advisable. My Trustee may grant options of any duration for any such sales,
exchanges, or transfers of trust property.
My Trustee may enter into contracts, and may deliver deeds or other instruments, that my
Trustee deems appropriate.
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Section 8.07 Common Investments
For purposes of convenience with regard to the administration and investment of the trust
property, my Trustee may invest part or all of the trust property jointly with trust property of
other trusts for which my Trustee is also serving as a Trustee. For this purpose, a corporate
fiduciary acting as my Trustee may use common funds for investment.
When trust property is managed and invested in this manner, my Trustee shall maintain records
that sufficiently identify that portion of the jointly invested assets that constitute the trust
property of this trust.
Section 8.08 Environmental Powers
My Trustee shall have the right to inspect trust property to determine compliance with or to
respond to any environmental law affecting the trust property. "Environmental law" shall mean
any federal, state, or local law, rule, regulation, or ordinance relating to protection of the
environment or of human health.
My Trustee may refuse to accept property if my Trustee determines that the property is or may
be contaminated by any hazardous substance or is or was used for any purpose involving
hazardous substances that could create liability to the trust or to my Trustee.
My Trustee may use and expend trust property to (i) conduct environmental assessments, audits
or site monitoring; (ii) take remedial action to contain, clean up or remove any hazardous
substance including a spill, discharge or contamination; (iii) institute, contest or settle legal
proceedings brought by a private litigant or any local, state, or federal agency concerned with
environmental compliance; (iv) comply with any order issued by any court or by any local, state,
or federal agency directing an assessment, abatement or clean-up of any hazardous substance;
and(v) employ agents, consultants and legal counsel to assist my Trustee in these actions.
My Trustee shall not be liable for any loss or reduction in value sustained by my trust as a result
of my Trustee's retention of property on which hazardous materials or substances requiring
remedial action are discovered unless my Trustee contributed to the resulting loss or reduction in
value through willful misconduct or gross negligence.
My Trustee shall not be liable to any beneficiary or to any other party for any decrease in the
value of trust property as a result of my Trustee's compliance with any environmental law,
including any reporting requirement.
My Trustee may release, relinquish or disclaim any power held by my Trustee that my Trustee
determines may cause my Trustee to incur individual liability under any environmental law.
Section 8.09 Insurance Powers
My Trustee may purchase disability, medical, liability, long-term health care and other insurance
on behalf of and for the benefit of any beneficiary. My Trustee may purchase annuities and
similar investments for any beneficiary.
My Trustee may purchase, accept, hold, and deal with as owner, policies of insurance on my life,
the life of any beneficiary, or on the life of any person in whom any beneficiary has an insurable
interest. It is my intent that life insurance policies be considered proper investments of trust
principal.
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The provisions of this Section shall supersede the principles of general trust law with respect to
my Trustee's duties and obligations relating to any life insurance policies owned or acquired by
my trust.
My Trustee is specifically authorized, but not required, to invest all, some or none of the trust
principal in policies of life insurance on my life or on the life of any other person for which an
insurable interest exists.
My Trustee is under no obligation to continue in force any insurance policy forming a part of the
trust principal and is under no obligation to pay premiums or other charges that may become due
and payable under the provisions of any insurance policy at any time.
Except as otherwise provided in this agreement, my Trustee shall have all of the incidents of
ownership and all possible powers with respect to any life insurance policy forming a part of the
trust principal including,by way of illustration and not limitation,the following powers:
(a) Automatic Premium Loans
My Trustee shall have the power to execute or cancel any automatic premium
loan agreement and the power to elect or cancel any automatic loan provision.
(b) Borrow for Premium Payments
My Trustee may borrow money with which to pay premiums due on a policy
either from the company issuing the policy or from any other source. My Trustee
may use the policy as security for the loan to the extent the policy permits.
(c) Policy Loans
My Trustee may borrow from the life insurance carrier issuing a policy and may
use the policy as security for the loan to the extent the policy permits.
(d) Exercise Option on a Policy
My Trustee may exercise any option contained in a policy with regard to any
dividend or share of surplus apportioned to the policy.
(e) Reduce or Convert a Policy
My Trustee may reduce the amount of a policy or convert or exchange the policy.
(f) Surrender a Policy
My Trustee may surrender a policy at any time for its cash value or withdraw a
portion of its cash value.
(g) Elect Paid-Up Insurance
My Trustee may elect any paid-up insurance or any extended-term insurance
nonforfeiture option contained in a life insurance policy.
(h) Sell Policies
My Trustee may sell a life insurance policy at its fair market value to the insured,
to anyone having an insurable interest in the policy, or through a viatical or life
settlement arrangement.
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(i) Split Dollar Arrangements
My Trustee may enter into a split-dollar arrangement with respect to a policy with
a beneficiary or the employer of a beneficiary or with another trust provided a
Trustee of this trust is serving as a Trustee of the other trust, notwithstanding that
the split-dollar arrangement may constitute an act of self-dealing, so long as the
split-dollar arrangement is not for the benefit of my Trustee, my Trustee's spouse,
or any of their ancestors or descendants, or the spouses of their ancestors or
descendants.
0) Distribution of Policies
My Trustee shall have the power to transfer and assign a policy to a beneficiary as
a distribution of trust property.
My Trustee shall make every effort to transfer any policy insuring a beneficiary's
life to the insured beneficiary as part of the beneficiary's distributive share,unless
my Trustee determines, in its sole and absolute discretion, that distribution of the
policy in another manner would have better tax consequences for the beneficiary.
(k) Exercise All Other Rights, Options, or Benefits
My Trustee shall have the right to exercise any other right, option, or benefit
contained in a policy or permitted by the insurance company issuing the policy.
(1) Standard of Care With Respect to Acquisition and Retention of
Life Insurance Policies
My Trustee shall have no duty at any time during the term of any trust created
hereunder to diversify with respect to policies or to inquire into the suitability of
an insurance policy or the financial condition of an insurer.
My Trustee may utilize all or any part of the trust principal and income to
purchase and continue in force a policy without any duty to diversify the
investments of the trust in assets other than life insurance. My Trustee may
purchase all such insurance from one or more insurers without a duty to diversify
the types of policies or to purchase policies from more than one insurer.
My Trustee shall have no liability for purchasing or retaining a policy of life
insurance as authorized in this Section, even if the investment in the policy does
not satisfy applicable standards of prudence or diversification, or if the policy is
inferior to another investment, including another life insurance policy that my
Trustee could have acquired. My Trustee shall have no liability or responsibility
for any loss resulting from any failure of an insurer to pay claims under a policy,
or for the exercise or non-exercise of any benefit, option or privilege under the
policy,including the right to borrow or withdraw cash values in order to invest for
a higher effective yield than under the policy.
My Trustee may, without incurring any liability to any person, purchase a policy
upon the recommendation of an experienced insurance advisor. My Trustee shall
be under no liability at any time during the term of this trust to any person for any
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loss suffered as a result of the financial condition, including insolvency, of any
insurer.
My Trustee is authorized to invest in or retain indefinitely, a policy that holds or
acquires an interest in any entity or asset held by me, members of my family or
trusts created by any of us. My Trustee shall have no duty, responsibility or
liability to monitor the investments or the investment performance of a policy
owned by this trust.
My Trustee shall not be liable for a loss, decrease in value or the economic
consequences sustained as a result of my Trustee acquiring or retaining a policy,
absent my Trustee's willful misconduct. The sole duty of my Trustee with respect
to a policy shall be to hold the policy and pay the premiums.
Section 8.10 Loans and Borrowing Powers
My Trustee may make secured or unsecured loans to any person(including a beneficiary), entity,
trust or estate, for any term or payable on demand, with or without interest. My Trustee may
enter into or modify the terms of any mortgage or security agreement granted in connection with
any loan and may release or foreclose on the mortgage or security.
My Trustee may borrow money at interest rates and on other terms that it deems advisable from
any person, institution or other source including, in the case of a corporate fiduciary, its own
banking or commercial lending department.
My Trustee may encumber trust property by mortgages, pledges and other hypothecation and
shall have the power to enter into any mortgage, whether as a mortgagee or mortgagor even
though the term may extend beyond the termination of the trust and beyond the period that is
required for an interest created under this agreement to vest in order to be valid under the rule
against perpetuities.
My Trustee may purchase, sell at public or private sale, trade, renew, modify, and extend
mortgages. My Trustee may accept deeds in lieu of foreclosure.
Section 8.11 Nominee Powers
My Trustee may hold real estate,securities and any other trust property in the name of a nominee
or in any other form without disclosing the existence of any trust or fiduciary capacity.
Section 8.12 Payment of Taxes and Expenses
Except as otherwise provided in this agreement, my Trustee is authorized to pay all property
taxes, assessments, fees, charges, and other expenses incurred in the administration or protection
of the trust. All payments shall be a charge against the trust property and shall be paid by my
Trustee out of the income, or to the extent that the income is insufficient, then out of the
principal of the trust property. The determination of my Trustee with respect to the payment of
expenses shall be conclusive upon the beneficiaries.
Section 8.13 Purchase of Assets from and Loans to My Probate Estate
Upon my death, my Trustee is authorized to purchase and retain in the form received, as an
addition to the trust, any property that is a part of my probate or trust estate. In addition, my
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Trustee may make loans, with or without security, to my probate or trust estate. My Trustee
shall not be liable for any loss suffered by the trust as a result of the exercise of the powers
granted in this Section.
Notwithstanding anything in this agreement to the contrary,my Trustee shall not have the power
to use any trust property for the benefit of my estate as defined in Section 20.2042-1(b) of the
Treasury Regulations, unless such property is included in my gross estate for federal estate tax
purposes.
Section 8.14 Real Estate Powers
My Trustee may sell at public or private sale, convey, purchase, exchange, lease for any period,
mortgage, manage, alter, improve and in general deal in and with real property in such manner
and on such terms and conditions as my Trustee deems appropriate.
My Trustee may grant or release easements in or over, subdivide, partition, develop, raze,
improve, and abandon any real property.
My Trustee may manage real estate in any manner that my Trustee deems best and shall have all
other real estate powers necessary for this purpose.
My Trustee may enter into contracts to sell real estate. My Trustee may enter into leases and
grant options to lease trust property even though the term of the agreement extends beyond the
termination of any trusts established under this agreement and beyond the period that is required
for an interest created under this agreement to vest in order to be valid under the rule against
perpetuities. For such purposes, my Trustee may enter into any contracts, covenants and
warranty agreements that my Trustee deems appropriate.
Section 8.15 Residences and Tangible Personal Property
My Trustee may acquire, maintain and invest in any residence for the use and benefit of the
beneficiaries, whether or not the residence is income producing and without regard to the
proportion that the value of the residence may bear to the total value of the trust property and
even if retaining the residence involves financial risks that trustees would not ordinarily incur.
My Trustee may pay or make arrangements for others to pay all carrying costs of the residence,
including, but not limited to, taxes, assessments, insurance, expenses of maintaining the
residence in suitable repair, and other expenses relating to the operation of the residence for the
benefit of the beneficiaries.
My Trustee may acquire,maintain and invest in articles of tangible personal property, whether or
not the property is income producing, and may pay the expenses of the repair and maintenance of
the property.
My Trustee shall have no duty to convert the property referred to in this Section to productive
property except as required by other provisions of this agreement.
My Trustee may permit any income beneficiary of the trust to occupy any real property or use
any personal property owned by the trust on terms or arrangements that my Trustee may
determine, including rent free or in consideration for the payment of taxes, insurance,
maintenance,repairs,or other charges.
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My Trustee shall have no liability for any depreciation or loss as a result of the retention of any
property retained or acquired under the authority of this Section.
Section 8.16 Retention and Abandonment of Trust Property
My Trustee may retain, without liability for depreciation or loss resulting from retention, any
property constituting the trust at the time of its creation, at the time of my death or as the result
of the exercise of a stock option. My Trustee may retain property, notwithstanding the fact that
the property may not be of the character prescribed by law for the investment of assets held by a
fiduciary, and notwithstanding the fact that retention may result in inadequate diversification
under any applicable Prudent Investor Act or other applicable law.
My Trustee may hold property that is non-income producing or is otherwise nonproductive if
holding the property is, in the sole and absolute discretion of my Trustee, in the best interests of
the beneficiaries. On the other hand, my Trustee shall invest contributions of cash and cash
equivalents as soon as reasonably practical after the assets have been acquired by the trust. My
Trustee is permitted to retain a reasonable amount in cash or money market accounts in order to
pay anticipated expenses and other costs and to provide for anticipated distributions to or for the
benefit of a beneficiary.
My Trustee may abandon any trust property that my Trustee deems to be of insignificant value.
Section 8.17 Securities, Brokerage and Margin Powers
My Trustee may buy, sell, trade and otherwise deal in stocks, bonds, investment companies,
mutual funds, common trust funds, commodities, options and other securities of any kind and in
any amount, including short sales. My Trustee may write and purchase call or put options, and
other derivative securities. My Trustee may maintain margin accounts with brokerage firms and
may pledge securities to secure loans and advances made to my Trustee or to or for the benefit of
a beneficiary.
My Trustee may place all or any part of the securities held by the trust in the custody of a bank
or trust company. My Trustee may have all securities registered in the name of the bank or trust
company or in the name of its nominee. My Trustee may appoint the bank or trust company as
the agent or attorney in fact to collect, receive, receipt for and disburse any income and generally
to perform the duties and services incident to a custodian of accounts.
My Trustee may employ a broker-dealer as a custodian for securities held by the trust and may
register the securities in the name of the broker-dealer or in the name of a nominee with or
without the addition of words indicating that the securities are held in a fiduciary capacity. My
Trustee may hold securities in bearer or uncertificated form and may use a central depository,
clearing agency or book-entry system, such as The Depository Trust Company, Euroclear or the
Federal Reserve Bank of New York.
My Trustee may participate in any reorganization, recapitalization, merger or similar transaction.
My Trustee may exercise or sell conversion or subscription rights for securities of all kinds and
description.
My Trustee may give proxies or powers of attorney that may be discretionary and with or
without powers of substitution. My Trustee may vote or refrain from voting as to any matter.
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Section 8.18 Settlement Powers
My Trustee may settle, by compromise, adjustment, arbitration or otherwise any and all claims
and demands in favor of or against the trust. My Trustee may release or abandon any claim in
favor of the trust.
Section 8.19 Limitation on My Trustee's Powers
All powers granted to my Trustee under this agreement or by applicable law shall be limited as
set forth in this Section,unless explicitly excepted by reference to this Section.
(a) An Interested Trustee Limited to Ascertainable Standards
An Interested Trustee may not exercise or participate in the exercise of discretion
with respect to the distribution of income or principal, or the termination of the
trust to or for the benefit of a beneficiary, to the extent that the exercise of such
discretion is other than for the health, education, maintenance or support of a
beneficiary as described under Sections 2041 and 2514 of the Internal Revenue
Code.
(b) No Distributions in Discharge of Certain Legal Obligations
My Trustee may not exercise or participate in the exercise of discretion with
respect to the distribution of income or principal that would in any manner
discharge a legal obligation of my Trustee,including the obligation of support.
If a beneficiary or any other person has the power to remove a Trustee, that
Trustee may not exercise or participate in the exercise of discretion with respect
to the distribution of income or principal that would in any manner discharge a
legal obligation of the person having the power to remove the Trustee, including
that person's obligation of support.
(c) Insurance Policy on the Life of My Trustee
If the trust holds a policy that insures the life of my Trustee, my Trustee shall
have no right to exercise any powers or rights with respect to the policy. A Co-
Trustee serving under this agreement shall exercise the powers and rights with
respect to the policy.
If the insured Trustee is the only Trustee, then an Independent Special Trustee
designated under Section 2.07 shall exercise the powers and rights with respect to
the policy.
If any rule of law or court decision construes the ability of the insured Trustee to
name an Independent Special Trustee as an incident of ownership of the policy,
then a majority of the then current mandatory and discretionary income
beneficiaries (excluding the insured Trustee if he or she is a beneficiary) shall
select the Independent Special Trustee.
(d) Insurance Policy on a Beneficiary's Life
If the trust holds a policy that insures the life of a beneficiary, the beneficiary
(acting individually or as Trustee) shall have no power over the policy, the cash
value of the policy, or the proceeds of the policy. The intent of this denial of
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power is to prevent an insured beneficiary from having a power that would
constitute an incident of ownership of the policy.
The limitations of this subsection shall not apply if the proceeds of the policy
would, upon the death of the beneficiary,otherwise be included in the gross estate
of the beneficiary for federal estate tax purposes.
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Article Nine
General Provisions
Section 9.01 Maximum Term for Trusts
Notwithstanding any other provision of this agreement to the contrary, unless terminated earlier
under other provisions of this agreement, each trust created under this agreement shall terminate
at the later of(a) twenty-one (21) years after the last to die of the descendants of my maternal
and paternal grandparents who are living at the time this agreement is signed, or (b) the date of
termination required by any applicable statutory provision.
At that time,the remaining trust property shall vest in and be distributed to the persons entitled to
receive mandatory distributions of net income of the trust and in the same proportions. If no
beneficiary is entitled to mandatory distributions of net income, the remaining trust property
shall vest in and be distributed to the beneficiaries entitled to receive discretionary distributions
of net income of the trust,in equal shares per stirpes.
Section 9.02 Spendthrift Provision
Neither the income nor the principal of any trust created under this trust agreement may be
assigned, anticipated, encumbered, alienated, or otherwise voluntarily transferred in any manner
by any beneficiary. In addition, neither the income nor the principal of any trust created under
this trust agreement is subject to attachment, bankruptcy proceedings or any other legal process,
to the interference or control of creditors or others, or otherwise subject to any involuntary
transfer.
This Section does not restrict a beneficiary's right to disclaim any interest or the exercise of any
power of appointment granted in this agreement.
Section 9.03 Changing the Governing Law and Situs of Administration
My Trustee may, at any time, change the governing law of the trust,remove all or any part of the
property or the situs of administration of the trust from one jurisdiction to another, or both. My
Trustee may elect, by filing an instrument with the trust records, that the trust will thereafter be
construed, regulated and governed as to administration by the laws of the new jurisdiction. My
Trustee may take action under this Section for any purpose my Trustee deems appropriate,
including the minimization of any taxes in respect of the trust or any beneficiary of such trust,
and may do so with or without providing notice to any beneficiary.
If necessary, or if deemed advisable by my Trustee, my Trustee will appoint an Independent
Trustee to serve as trustee in the new situs.
If necessary, and if my Trustee does not appoint an Independent Trustee within thirty (30) days
of my Trustee's action to change the governing law or situs of the trust, the beneficiaries entitled
to receive distributions of net income under the trust may, by majority consent, appoint a
corporate fiduciary in the new situs. If a beneficiary is a minor or is incapacitated, the parent or
legal representative of the beneficiary may act on behalf of the beneficiary.
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Section 9.04 Definitions
For purposes of this agreement, the following terms have the following meanings:
(a) Adopted and Afterborn Persons
A legally adopted person in any generation and his or her descendants, including
adopted descendants, has the same rights and shall be treated in the same manner
under this agreement as natural children of the adopting parent, provided such
person is legally adopted prior to attaining the age of eighteen (18) years. A
person is deemed to be legally adopted if the adoption was legal in the jurisdiction
in which it occurred at the time that it occurred.
A fetus in utero that is later born alive shall be considered a person in being
during the period of gestation.
(b) Agreement
The term "this agreement" means this trust agreement and includes all trusts
created under the terms of this agreement.
(c) Available GST Exemption
An individual's "available GST Exemption" means the GST exemption provided
in Section 2631 of the Internal Revenue Code in effect at the time; reduced by the
aggregate of (1) the amount, if any, of GST exemption allocated to lifetime
transfers and (2) the amount, if any, of allocations of GST exemption made or
deemed made to transfers other than allocations to transfers under this agreement.
If, at the time, the individual has made a gift with an inclusion ratio of greater
than zero but has not filed a gift tax return and the due date for the gift tax return
has not yet passed, that individual's GST exemption is deemed to have been
allocated to this gift to the extent necessary and possible to exempt the gift from
generation-skipping transfer tax.
(d) Descendants
The term "descendants" shall include a person's lineal descendants of all
generations.
(e) Education
The term "education" is intended to be an ascertainable standard in accordance
with Section 2041 and Section 2514 of the Internal Revenue Code and shall
include,but not be limited to:
Enrollment at private elementary, junior and senior high school
including boarding school;
Undergraduate and graduate study in any field at a college or
university;
Specialized, vocational or professional training or instruction at
any institution,including private instruction; and
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Any other curriculum or activity that my Trustee may deem useful
for developing the abilities and interests of a beneficiary including,
without limitation, athletic training, musical instruction, theatrical
training,the arts and travel.
The term "education" shall also include distributions made by my Trustee for
expenses such as tuition, room and board, fees, books and supplies, tutoring and
transportation and a reasonable allowance for living expenses.
(f) Incapacity
Except as otherwise provided in this agreement, a person is deemed incapacitated
in any one of the following circumstances.
(1) The Opinion of Two Licensed Physicians
An individual is deemed incapacitated whenever, in the opinion of
two licensed physicians, the individual is unable to effectively
manage his or her property or financial affairs, whether as a result
of age, illness, use of prescription medications, drugs or other
substances, or any other cause.
An individual is deemed restored to capacity whenever the
individual's personal or attending physician provides a written
opinion that the individual is able to effectively manage his or her
property and financial affairs.
(2) Court Determination
An individual is deemed incapacitated if a court of competent
jurisdiction has declared the individual to be disabled, incompetent
or legally incapacitated.
(g) Income Beneficiary
The term "income beneficiary" means any beneficiary who is then entitled to
receive distributions of the net income of the trust, whether mandatory or
discretionary.
Unless otherwise provided in this agreement, the phrase "majority of the income
beneficiaries" means any combination of income beneficiaries who, if all accrued
net income were distributed on the day of a vote by the beneficiaries, would
receive more than Fifty(50%)Percent of the accrued net income. For purposes of
this calculation, beneficiaries who are eligible to receive discretionary
distributions of net income are deemed to receive the income in equal shares.
References to a "majority" refer to a majority of the entire trust collectively until
my Trustee allocates property to separate trusts or trust shares. After the
allocation of property to separate trusts or trust shares, references to a"majority"
refer to a majority of each separate trust or trust share.
_. 9-3
(h) Independent Trustee
The term"Independent Trustee" means a Trustee who is not an Interested Trustee
as defined in subsection (i) and includes an Independent Special Trustee
appointed under the provisions of Section 2.07. Whenever(1) a power is granted
exclusively to an Independent Trustee or (2) the phrase "other than an Interested
Trustee" is used, then the power or discretion may be exercised only by an
Independent Trustee. Whenever this agreement specifically prohibits an
Interested Trustee from exercising discretion or performing an act, then only an
Independent Trustee may exercise that discretion or perform that act.
(i) Interested Trustee
The term "Interested Trustee" means a Trustee who (1) is a transferor or
beneficiary; (2) is related or subordinate to a transferor or beneficiary; (3) can be
removed and replaced by a transferor with either the transferor or a party who is
related or subordinate to the transferor; or(4) can be removed and replaced by a
beneficiary with either the beneficiary or a party who is related or subordinate to
the beneficiary.
For purposes of this subsection, (1) "transferor" means a person who transferred
property to the trust, including a person whose disclaimer resulted in property
passing to the trust; (2) "beneficiary"means a person who is or in the future may
be eligible to receive income or principal from the trust pursuant to the terms of
the trust, even if such person has only a remote contingent remainder interest in
the trust, but not if the person's only interest is as a potential appointee under a
power of appointment; and (3) "related or subordinate" means related or
subordinate within the meaning of Section 672(c)of the Internal Revenue Code.
0) Internal Revenue Code and Treasury Regulations
References to the "Internal Revenue Code" or to its provisions shall refer to the
Internal Revenue Code of 1986, as amended. References to the "Treasury
Regulations" are to the Treasury Regulations under the Internal Revenue Code in
effect from time to time.
Reference to any provision or section of that Code is deemed to refer to the
provision or section of the federal tax law in effect on the date of the execution of
this agreement.
If there is no provision or section that corresponds to such provision or section
and if the estate tax has been repealed, the reference to a provision or section of
the federal tax law shall nevertheless be deemed to refer to the provision or
section that was in effect at the time of the execution of this instrument or the
provision that was in effect immediately before the tax law was repealed, solely
for the purpose of determining the amount of property that passes under a
provision of this instrument if my Trustee, in its sole and absolute discretion,
determines that such result is more consistent with my intent.
9-4
My Trustee shall bear no liability for any decision made in good faith pursuant to
the power granted under the terms of this section defining the term "Internal
Revenue Code."
(k) Legal Representative
As used in this agreement, the term "legal representative" means a person's
guardian, conservator, executor, administrator, Trustee, or any other person. or
entity personally representing a person or the person's estate.
(1) Per Stirpes
Whenever a distribution is to be made to a person's descendants per stirpes, the
distribution shall be divided into as many shares as there are then living children
of such person and deceased children of such person who left then living
descendants. Each then living child shall receive one share and the share of each
deceased child shall be divided among such child's then living descendants in the
same manner.
(m) Permissible Distributee
"Permissible Distributee"means a beneficiary who is currently eligible to receive
distributions of trust income or principal,whether the distribution is mandatory or
discretionary.
(n) Primary Beneficiary
The primary beneficiary of a trust created under this agreement is the oldest
income beneficiary of that trust unless some other individual is specifically
designated as the primary beneficiary of that separate trust.
(o) Qualified Beneficiary
"Qualified Beneficiary" means a beneficiary who, on the date the beneficiary's
qualification is determined:
(1) is a distributee or Permissible Distributee of trust income or
principal;
(2) would be a distributee or Permissible Distributee of trust
income or principal if the interests of the distributees
described in subparagraph(1)terminated on that date; or
(3) would be a distributee or Permissible Distributee of trust
income or principal if the trust terminated on that date.
(p) Shall and May
Unless otherwise specifically provided in this agreement or by the context in
which used, I use the word "shall" in this agreement to command, direct or
require, and the word "may"to allow or permit, but not require. In the context of
my Trustee, when I use the word "may" I intend that my Trustee may act in its
sole and absolute discretion unless otherwise stated in this agreement.
9-5
(q) Settlor
"Settlor" has the same legal meaning as "Grantor," "Trustor" or any other term
referring to the maker of a trust.
(r) Trust
The terms "this trust" or "this trust agreement' shall refer to this agreement and
all trusts created under the terms of this agreement.
(s) Trustee
The term "my Trustee" or "Trustee" refers to the Trustee named in Article One
and to any successor, substitute, replacement or additional person, corporation or
other entity that is from time to time acting as the Trustee of any trust created
under the terms of this agreement. The term"Trustee"refers to singular or plural
as the context may require.
(t) Trust Property
The phrase "trust property" shall be construed to mean all property held by my
Trustee under this agreement, including all property that my Trustee may acquire
from any source.
Section 9.05 General Provisions and Rules of Construction
The following general provisions and rules of construction shall apply to this agreement:
(a) Duplicate Originals
This agreement may be executed in any number of counterparts, each of which is
deemed to be an original. Any person may rely upon a copy of this agreement
certified under oath by my Trustee to be a true copy, to the same effect as if it
were an original.
(b) Singular and Plural; Gender
Unless the context requires otherwise, words denoting the singular may be
construed as plural and words of the plural may be construed as denoting the
singular. Words of one gender may be construed as denoting another gender as is
appropriate within the context. The word "or" when used in a list of more than
two items may function as both a conjunction and a disjunction as the context
requires or permits.
(c) Headings of Articles, Sections, and Subsections
The headings of Articles, Sections, and subsections used within this agreement
are included solely for the convenience and reference of the reader. They have no
significance in the interpretation or construction of this agreement.
(d) Governing State Law
This agreement shall be governed, construed and administered according to the
laws of the Commonwealth of Pennsylvania as from time to time amended,
--
except as to trust property required by law to be governed by the laws of another
jurisdiction and unless the trust situs is changed as provided in Section 9.03.
(e) Notices
Unless otherwise stated, whenever this agreement calls for notice, the notice shall
be in writing and shall be personally delivered with proof of delivery, or mailed
postage prepaid by certified mail, return receipt requested, to the last known
address of the party requiring notice. Notice shall be effective on the date
personally delivered or on the date of the return receipt. If a party giving notice
does not receive the return receipt but has proof that he or she mailed the notice,
notice shall be effective on the date it would normally have been received via
certified mail. If notice is required to be given to a minor or incapacitated
individual, notice shall be given to the parent or legal representative of the minor
or incapacitated individual.
(f) Severability
The invalidity or unenforceability of any provision of this agreement shall not
affect the validity or enforceability of any other provision of this agreement. If a
court of competent jurisdiction determines that any provision is invalid, the
remaining provisions of this agreement shall be interpreted and construed as if the
invalid provision had never been included in this agreement.
I have executed this agreement on the day and year first above written. This Irrevocable Trust
Agreement shall be effective when signed by me, whether or not now signed by a Trustee.
I certify that I have read this Irrevocable Trust Agreement, that I understand it, and that it
correctly states the provisions under which my trust property is to be administered and
distributed by my Trustee.
Witney Ann F. Moyer, Settlor
Witnes Nexander
Sprague rustee
Witness P. Spr e, Trustee
9-7
except as to trust property required by law to be governed by the laws of another
jurisdiction and unless the trust situs is changed as provided in Section 9.03.
(e) Notices
Unless otherwise stated, whenever this agreement calls for notice, the notice shall
be in writing and shall be personally delivered with proof of delivery, or mailed
postage prepaid by certified mail, return receipt requested, to the last known
address of the party requiring notice. Notice shall be effective on the date
personally delivered or on the date of the return receipt. If a party giving notice
does not receive the return receipt but has proof that he or she mailed the notice,
notice shall be effective on the date it would normally have been received via
certified mail. If notice is required to be given to a minor or incapacitated
individual, notice shall be given to the parent or legal representative of the minor
or incapacitated individual.
(fl Severability
The invalidity or unenforceability of any provision of this agreement shall not
affect the validity or enforceability of any other provision of this agreement. If a
court of competent jurisdiction determines that any provision is invalid, the
remaining provisions of this agreement shall be interpreted and construed as if the
invalid provision had never been included in this agreement.
I have executed this agreement on the day and year first above written. This Irrevocable Trust
Agreement shall be effective when signed by me, whether or not now signed by a Trustee.
I certify that I have read this Irrevocable Trust Agreement, that I understand it, and that it
correctly states the provisions under which my trust property is to be administered and
distributed by my Trustee.
Witness Ann F. Moyer, Settlor
J d2���- —
Wiss Clark M. Spragu ,T stee
Witness Alexander P. Sprague,Trustee
9-7
ACKNOWLEDGMENTS
COMMONWEALTH OF PENNSYLVANIA }
) ss.
COUNTY OF )
On this day, 2009, before me personally appeared Ann F. Moyer,
as Settlor, personally known to me (or proved to me on the basis of satisfactory evidence) to be
the individual whose name is subscribed to the foregoing Irrevocable Trust Agreement, and
acknowledged that she executed the same as her voluntary act and deed for the purposes therein
contained.
Witness my hand and official seal.
[Seal]
Notary Public
STATE OF NEW JERSEY )
ss.
COUNTY OF C )
On this day, � j,c '3O 2009, before me personally appeared Clark M.
Sprague, as Trug6e, per6inally known to me (or proved to me on the basis of satisfactory
evidence) to be the individual whose name is subscribed to the foregoing Irrevocable Trust
Agreement, and acknowledged that he executed the same as his voluntary act and deed for the
purposes therein contained.
Witness my hand and official seal.
[Seal]
Notary Public
ANDREA KISSEL
NOTARYM COFN13NO Y
9-9 Comndss m B#w3A7/m14. .._.
COMMONWEALTH OF PENNSYLVANIA )
ss.
COUNTY OF Cu,b2., )4,d )
On this day, 'Ju 1. 30'* , 2009, before me personally appeared Alexander P.
Sprague, as Trustee, personally known to me (or proved to me on the basis of satisfactory
evidence) to be the individual whose name is subscribed to the foregoing Irrevocable Trust
Agreement, and acknowledged that he executed the same as his voluntary act and deed for the
purposes therein contained.
Witness my hand and official seal.
[Seal]
COMMONWEALTH OF PENNSYLVANIA
Notarial Seal '
6arbara M.Minnier,Notary Public
South Middleton Twp.,Cumberland Cotmty
My Commission E�ires March 22,zoo t &,&
No Public
Member,Fennsylvani�Assoclatton of Notaries
. 9-10
Schedule A
Ten($10.00)Dollars Cash