EFTA01127310.pdf

Wednesday, August 22, 2012 U.S. Trust Comments to Leon Black Revocable Trust. Comment 3.1 Since most of Leon's art is owned in entities (Narrows Holdings I and Narrows Holdings II), I assume you will need a specific disposition of those entity interests so that such interests pass (i) to the Marital Trust if Debra survives Leon or (ii) per stirpes to Leon's issue subject to the trusts held under the Black 2006 Family Trust if Debra predeceases Leon. As drafted, these LLC interests would pass as part of the residuary trust fund : 1/2 to the CLATs and 1/2 per stirpes to Leon's issue subject to the trusts under the 2006 Family Trust. Comment 6.1 Since you anticipate that Leon will not fund his revocable trust during his lifetime, if Debra survives, consider disposing of tangibles and residences under the Will so that title does not need to be changed twice—once to the Trustees of the Revocable Trust and again to the Marital Trust or Debra. Comment 6.2 Include in the definition of residences, interests In any entity that owns a residence used by Leon as a personal residence? Comment 7.1 I understood that the impetus for Leon giving half his estate to charity if Debra predeceases is that he felt his children had already received enough assets. If that is so, why not simply leave Share A to the Black Family Foundation, rather than create four separate CLATs? I think we should raise this with Leon. Riders to Page 22: 22.1 or at the time of the Senior's death if DEBRA shall survive the Settlor. 22.2 (the "Issue's Share") shall be further subdivided into two separate shares according to value: (1) one share consisting of that portion of the Issue's Share having a fair market value at the time of division substantially equal to seventy-five percent (75%) of the total fair market value of the Issue's Share (Share A), and (2) one share consisting of the balance of the Issue's Share ("Share Be). 1 EFTA01127310 Wednesday, August 22, 2012 Comment 23.1 Consider including provisions giving the Trustees absolute discretion to select which specific Items of property will be included in Share A versus Share B. Consider also whether Leon wants to give them any guidance in this regard or would like the Trustees to consult with the children before making the division. For example, a child may prefer to have income producing assets held in the Share B trust and to have Works of Art (or LLC interests holding the art) held in the Share A trust. Comment 38.1 If the removing individual is also a beneficiary of the trust, do you not need to always require that a replacement Trustee selected by such individual be an independent Trustee (whether or not the removed Trustee was independent)? Comment 40.1 Does Leon want to limit compensation so that Barry, John and Richard do not receive double compensation in any year (i.e., $500,000) for acting as both an Executor and a Trustee? IMPORTANT: This brief summary of planning ideas is for discussion purposes only. It does not contain legal, tax, investment, or insurance advice and cannot be relied upon for implementation and/or protection from penalties. Always consult with your independent attorney and tax advisor for legal and tax advice. IRS Cucutar 230 Disclosure: Pursuant to IRS Regulations, we inform you that any tax advice contained in this communication (including any attadsments) Is not intended or written to be used, and cannot be used by any person or entity for the purpose of (i) avoiding tax related penalties Imposed by any governmental tax authority or agency, or (II) promoting, marketing or recommending to another party any transaction or matter discussed herein. We advise you to consult with an independent tax advisor on your particular tax circumstances. 2 EFTA01127311  THE LEON D. BLACK 2012 REVOCABLE TRUST AGREEMENT Dated: Prepared by McDermott Will dc Emery LLP New York. New York DNIUS 37O1901O O8SS;5 0011 EFTA01127312  member or members) and in such amounts or proportions as the Independent Trustees, in their sole discretion, shall determine. Payments or applications pursuant to this subsection may be made at any time or from time to time, for any reason or purpose whatsoever. In exercising the discretion granted in this subsection, the Independent Trustees need not, but may, consider such of the financial resources apart from the Trust as they deem appropriate of such class member or members. (3) The Senior confirms that the entire Trust Fund may be distributed at any time to or for the benefit of any one or more of the class members pursuant to this section, even though such distribution terminates the Trust, and without regard to the interest of any remainderman of the Trust. (4) If the Settbr is under a disability, the Trustees shall pay any portion of the Trust Fund that the Independent Trustees determine is appropriate to or for the benefit of those individuals to whom the Settlor customarily made periodic gifts prior to the Senior's disability. Such payments shall be consistent with the amounts that the Senior customarily gave to such individuals and may be made outright or to any of the trusts that the Settlor or any of the /L- Senior's issue has established for such individuals during the Settlor's life. In addition, the Trustees shall pay such additional amounts from the Trust Fund to or for the benefit of any one or more individuals to or for whose benefit a gift is to be made under this Trust Agreement at the Settlor's death as modified by any power of appointment exercisable by the Settlor and delivered —to the Trustees pursuant to section (E)that the Independent Trustees determine, in their sole li discretion, (a) will not jeopardize the comfort and well being of the Senior and)DEBRA, (b) are ;AW' .e consistent with the pattern of dispositions directed to be made by this Trust Agreement at the Senior's death as modified by any power of appointment exercised by the Senior and delivered pr to the Trustees pursuant to section (Eit and (c) will meaningfully reduce the estate taxes that -- would otherwise be payable at the death of the Settlor or at the death of the survivor of the Settlor and DEBRA. Such payments may be made outright to any of such individuals or to any trust of which any combination of such individuals, the issue of such individuals,and he Senior are the primary beneficiaries. ,O44-1 (C) Accumulation of Income. At the end of each year, the Trustees shall add to principal any net income not paid or applied pursuant to the provisions of this Article. 2 DM Us 37671901.1 osn3sooli EFTA01127313  (D) Additions to Trust. The Se lor may add property to this Trust (i) by lifetime transfers of additional property; (ii) by Will• (ii) by naming the Trustees as beneficiaries of one or more life insurance policies; or (iv) by any other means. The Trustees need not retain any property in the form received. (E) Power of Appointment. The Settlor shall have the absolute power to appoint any part or all of the Trust Fund remaining at the Settler's death, together with any property distributed or distributable to the Trustees upon the Senior's death, to or for the benefit of any one or more Persons including the Settler's estate and the creditors of the Settler's estate in such amounts and proportions, either outright or in further trust, upon such terms and conditions (including the granting to the appointee of a further and general or limited power of appointment), as the Senior shall determine. The Settler may exercise this power of appointment either () by written instrument that is delivered to the Trustees at a time when the Senior is competent, which makes specific reference to this section, and which is signed and acknowledged by the Settler or (ii) by a provision in the Settler's Will that makes specific reference to this section. Any appointment made by such exercise shall be effective on the date of the Settlor's death. (F) Trust Termination. Unless sooner terminated by the distribution of the entire Trust Fund, the Trust shall terminate upon the death of the Senior. Upon such termination, the Trustees shall dispose of the Trust Fund, together with any property distributed or distributable to the Trustees upon the Settler's death, to the extent not effectively appointed by the Settler pursuant to the power of appointment granted under this Article, pursuant to the subsequent provisions of this Trust Agreement. COiAte: - 3.( III: PERSONAL PROPERTY (A) Works of Art. (I) If DEBRA survives the Settlor, the Trustees shall hold all of the Settler's works of art that are valued at more than TWENTY-FIVE THOUSAND ($25,000) DOLLARS for federal estate tax purposes, the Settlor's collection of first edition books and the Settler's collection of canes (including cane stands and glass canes) in as many separate Trusts, each upon the terms set forth in Article VIII, as the Trustees, in their sole discretion, shall determine. This provision shall apply to any works of art valued at more than TWENTY-FIVE THOUSAND ($25,000) DOLLARS for federal estate tax purposes and any 3 DIN_US 37471901.1 088835.0011 EFTA01127314 items of the Senior's first edition book and cane collections that are held in any Entity the equity interests of which are owned by the Settlor. (2) (a) If DEBRA does not survive the Settlor, the Trustees shall sell such portion of the property described in subsection (1) as they deem appropriate, and shall dispose of the proceeds of sale pursuant to the subsequent Articles of this Trust Agreement. l'he Trustees shall divide any of the property described in subsection (I) that they have not sold pursuant to the preceding sentence into shares of substantially equal value as the Independent Trustees, in their sole discretion, shall determine, so that there is (i) one (I) share for each of the Settlor's Children who survive the Senior and (ii) one (1) share for the issue (taken collectively) of each Child of the Senior who does not survive the Senior but has issue who survive the Settlor, and shall set aside one (I) such share for each such Child of the Settlor. The Trustees shall further divide each share set aside for a Child of the Senior who does not survive the Settlor into as many shares of substantially equal value as there are children of such Child of the Settlor who survive the Settlor, and shall set aside one (1) such share for each of them. The Trustees shall dispose of each share so set aside an issue of the Senior for his or her benefit as-provided-it- jc_co ) Article X11(1). C:Jr (b) If DEBRA does not survive the Settlor, the Settlor requests (but does not require) that the Independent Trustees take into account the Settlor's wishes as to how the property described in subsection (1) should be divided among the Settlor's issue as may be set forth in a letter from the Settlor that is delivered to the Trustees during the Senior's lifetime. (B) Disposition of Remaining Tangible Personal Property. (1) The Trustees shall distribute all of the Senior's tangible personal property not disposed of by section (A) to DEBRA, if DEBRA survives the Settlor. If DEBRA does not survive the Settlor, the Trustees shall dispose of such tangible personal property: (i) by distributing to those of the Senior's Children who survive the Settbr so much or all of such property, and in such amounts or proportions (if the Settlor is survived by more than one such child), as the Independent Trustees, in their sole discretion, shall determine; and/or (ii) by selling all of such property that is not disposed of pursuant to clause (i) of this sentence and distributing the proceeds of sale to those of the Senior's Children who 4 D.MUS 374 11901. 1 010183$ 0011 EFTA01127315  survive the Settler, and in such amounts or proportions (if the Settler is survived by more than one such child), as the Independent Trustees, in their sole discretion, shall determine; provided that if more than one of the Settler's Children survives the Settler, the combined value of all items and proceeds of items of such property distributed to each Child of the Settler pursuant to this subsection shall be equal (or as nearly equal as practicable) to the combined value ofall items and proceeds of sales of items of such property distributed to every other Child of the Settler pursuant to this subsection, and provided, further, that notwithstanding the foregoing, any property distributable to any Child of the Settler under this subsection may, in the sole discretion of the Independent Trustees, be disposed of for his or her benefit pursuant to Article XII(I). (2) If DEBRA does not survive the Settler, the Settler requests (but does not require) that the Trustees consult with the Settler's Children who survive the Settler before making the dispositions provided for in this section, and that in making such dispositions, the Independent Trustees take into account any preferences that the Settler's Children who survive the Settler may express. (3) If neither DEBRA nor any of the Settler's Children survive the Settler, the Trustees shall sell all of such tangible personal property, except to the extent the Trustees believe that it would be in the best interests of the beneficiaries of the balance of the Trust Fund of the Trust under Article II disposed of under Article VI (or any one or more of them) to retain any one or more items of such tangible personal property. The Trustees shall dispose of the proceeds of sale and any unsold tangible personal property pursuant to the subsequent provisions of this Trust Agreement. (C) Definition of Tangible Personal Property. (I) For purposes of this Article, the term "the Settler's tangible personal property" shall include, but not be limited to, the clothing, jewelry, personal effects, books, automobiles: household furniture and furnishings, silverware, china, works of art, and all other items of tan ible personal property that are held by or given to the Trustees of the Trust under Article II the Settler's death, together with all insurance policies thereon, if any, but shall exclude cash and coins that do not have numismatic value and gold and other precious metals and minerals that are held for investment purposes rather than for personal use. c...•\11.--1 2/, 5 Dmijs 3747190I-I 0888350011 EFTA01127316  an 0 e...53rite c_ c•," art C_ I' .4-it (2) For purposes of this Trust Agreement, the term "works of art" shall mean paintings, drawings. pictures and sculptures, including archaic Chinese bronzes and Chinese terra cotta figures. The Independent Trustees, in their sole discretion, shall determine whether any particular item of the Settlor's tangible personal property is a "work of art" and such decision shall be binding and conclusive upon all Persons who may in any way be affected thereby. (D) Expenses. The Trustees shall pay, as an administration expense, the reasonable expenses of storing, insuring, packing, and shipping the Senior's tangible personal property, and of delivering each item to the appropriate beneficiary. IV: RESIDENTIAL PROPERTY Com.t&) (A) Disposition if DEBRA Survives the Senior. The Trustees shall distribute to DEBRA, if DEBRA survives the Settlor, all of the right, title, and interest in and to any residence that is held by or given to the Trustees of the Trust under Article II at the Senior's death that DEBRA or the Settlor use as a permanent or occasional residence, together with all policies of insurance thereon. The property referred to in the preceding sentence shall include real property (together with buildings, fixtures, and improvements thereon), interests in condominium units (including common areas), and cooperative apartments (together with proprietary leases and shares of stock relating thereto). e," • ri"a -i- . (B) Disposition if DEBRA Does Not Survive the Settlor. If DEBRA does not survive the Settlor, the Trustees shall sell the property described in section (A), except to the extent the Trustees believe that it would be in the best interests of the beneficiaries of the balance of the Trust Fund of the Trust under Article If disposed of under Article VI (or any one or more of them) to retain any one or more of such properties. The Trustees shall dispose of the proceeds of sale and any unsold residential property pursuant to the subsequent provisions of this Trust Agreement. V: GENERAL GIFTS (A) Cash Gifts. (I) If DEBRA survives the Settlor, the Trustees shall distribute to DEBRA, outright and not in trust, an amount equal to the difference between the sum of TWENTY-FIVE MILLION DOLLARS ($25,000,000) and the proceeds of any life insurance policies DEBRA receives( s a result of the Senior's death. 6 O14_US 37471901.108883$ 0011 EFTA01127317  (2) If the Settlor's sister JUDY BLACK ("JUDY") survives the Settbr, the Trustees shall hold the sum of FIVE MILLION DOLLARS ($5,000,000) in a Trust for JUDY's benefit upon the terms set forth in Article IX. (B) Gift of Generation-Skipping Tax Exempt Amount. (1) The Trustees shall distribute an amount equal to the Generation-Skipping Tax Exempt Amount to the trustees then in office of the BLACK FAMILY 1997 GST EXEMPT TRUST, who shall add such property to the principal of such trust and dispose of the same therewith. (2) The Generation-Skipping Tax Exempt Amount, as defined more precisely in Article XX(A)(14), is approximately equal to the largest amount that can be protected from the generation-skipping transfer tax by the allocation of the Senior's remaining GST exemption. VI: BALANCE OF TRUST FUND The Trustees shall distribute the balance of the Trust Fund of the Trust under Article II remaining after the dispositions in Articles III, IV and V and after making the payments required to be made from such balance under Article VII (hereinafter the "Trust Fund Balance") as follows: (A) Disposition if DEBRA Survives the Settlor. If DEBRA survives the Senior, the Trustees shall hold the Trust Fund Balance in a separate Trust for DEBRA's benefit, upon the terms set forth in Article VIII. (B) Disposition if DEBRA Does Not S rvt e the Settlor. If DEBRA does not survive the Settlor, the Trustees shall divide the Trust F Balance into two (2) equal shares, Share A and Share B, which shall be distributed as follows: Cooks/Ara 414-• 7 .1 (I) The Trustees shall divide Share A into as many separate shares as there are Children of the Settlor who survive the Settlor and Children of the Settlor who do not survive the Settlor but have issue who survive the Settlor (each such share being referred to herein as a "Share A Subshare"). The Trustees shall hold each Share A Subshare in a separate Trust upon the terms set forth in Article X. (ce (2) The Trustees s all divide Share B into shares of the same number and size into which such property would ha been divided if the Trustees had been directed to distribute such property to the Senior's issue wehrati, . iv., the-Settlor. The Trustees shall set aside for each issue of the Settlor who survives the Settlor and who would have received a share of such 7 DMUS 37471901-I OSSS35.00I I EFTA01127318  qualify for the federal esta tax marital eduction, the Trustees shall use such property: (1) to pay the Senior's Death T es due upon r in connection with any property described in the first sentence of section (A)(I) (2) to pay t Senior's debts, funeral expenses and the administration expenses of the Settlor's estate that t e Senior's Personal Representatives request in writing from the Trustees pursuant to section (Band (3) to satisfy the Sailor's other general gifts, if any, to or for the benefit of persons other than DEBRA. The Trustees shall pay the balance of such property to the trustees then serving under the BLACK 2006 FAMILY TRUST AGREEMENT, who shall add the same to the principal of the BLACK 2006 FAMILY TRUST and dispose of the same as provided in the BLACK 2006 FAMILY TRUST AGREEMENT. By including this section in the Trust Agreement, the Senior does not intend to indicate that any of the property that the Settlor or the Trustees of the Trust under Article II now owns or that the Senior expects to acquire in the future or that the Settlor expects such Trustees to hold in the future is property that, by its nature, cannot qualify for the federal estate tax marital deduction. Notwithstanding the foregoing provisions of this section, if chapter II of the Code does not apply to the Settlor's estate for any reason, the reference in this section to "the Settlor's gross estate for federal estate tax purposes" shall be read instead as a reference to "the Settlor's gross estate for state estate tax purposes" and each reference in this section to "the federal estate tax marital deduction" shall be read instead as a reference to "any state estate tax marital deduction." (E) Income in Respect of Decedent. To the extent possible, the gift of the Trust Fund Balance disposed of under Article VI(A) shall be funded with rights to items of gross income in respect of a decedent within the meaning of § 691(a) of the Code. (F) Finality of Elections. Subject to the overriding provisions of Article XIV, any decision by the Trustees with respect to arty allocation or election authorized by this Trust Agreement or by law shall be binding and conclusive upon all Persons who may in any way be affected thereby, regardless of whether the effect of any such allocation or election is to benefit one or more of such Persons to the detriment of any one or more of such Persons. VIII: THE DEBRA R. BLACK MARITAL TRUST Following are the dispositive terms of the Trust directed to be held upon the terms set forth in this Article. Such trust shall be known as the "DEBRA R. BLACK MARITAL TRUST." 10 I>M_US 37471901.1 0$8113S 0011 EFTA01127319  5 \fit PP41115 (2) The Trustees s II retain such property until the termination of the Trust, subject only, in all cases, to DEBRA's power under section (B); and (3) The Trustees s II pay all expenses and carrying charges relating thereto from the Trust, or from any other Tru held under this Article, including, without limitation, all maintenance, improvement, insurance and repairs, charging against income only those expenses that are required to be charged against income under the EPTL. (E) Trust Termination. Unless sooner terminated by the distribution of the entire Trust Fund, the Trust shall terminate upon DEBRA's death. Upon such termination, the Trustees shall pay the Trust Fund as follows: (a) The Trustees shall dispose of all of the works of art, first edition books, and canes (including cane stands and glass canes) held in the Trust in the manner provided in Article III(A) as if the Settlor had died immediately after the death of DEBRA. (b) The Trustees shall dispose of Sin* the remaining Trust Fund in the same manner as the Trust Fund Balance would have been disposed of pursuant to Article VI(B) as if the Senior had died immediately after the death ofDEBRA. IX: THE JUDY BLACK TRUST Following are the dispositive terms of the Trust directed to be held for the benefit of JUDY upon the terms set forth in this Article. Such Trust shall be known as the JUDY BLACK TRUST. (A) Income Paid Currently. During JUDY's lifetime, the Trustees shall pay to JUDY, or apply for JUDY's benefit, the entire net income in quarter-annual installments or more frequent installments as may be convenient to the Trustees. (B) Principal Invasion. (I) The Trustees shall pay to JUDY or apply for JUDY's benefit as much of the principal as the Trustees, in their sole discretion, shall determine is necessary for JUDY's health, education, support and maintenance, taking into consideration JUDY's financial resources apart from the Trust. (2) The Trustees shall pay to JUDY, or apply for JUDY's benefit, as much of the principal as the Independent Trustees, in their sole discretion, shall determine. Payments or applications pursuant to this subsection may be made at any time or from time to time, for any reason or purpose whatsoever. In exercising the discretion granted in this subsection, the 12 DM_IJS 37471901.1 0US35 COI I EFTA01127320  Independent Trustees need not, but may, consider such ofJUDY's financial resources apart from the Trust as they deem appropriate. (C) Disposition on Termination. Unless sooner terminated by the distribution of the entire Trust Fund, the Trust shall terminate upon JUDY's death. Upon such termination, the Trustees shall pay the remaining Trust Fund to JUDY's issue who survive JUDY. If there are no issue of JUDY who survive JUDY, the Trustees shall divide the remaining Trust Fund into shares of the same number and size into which such property would have been divided if the Trustees had been directed to distribute such property to the Settlor's issue who survive JUDY. The Trustees shall set aside for each issue of the Senior who survives JUDY and who would have received a share of such distribution the share he or she would have received, and shall dispose of such share for his or her benefit as provided in Article XII(I). If none of the Settlor's issue survive JUDY, the Trustees shall distribute the remaining Trust Fund in equal shares to those of DEBRA's brothers, BRUCE RESSLER, JOHN RESSLER, RICHARD RESSLER and ANTHONY RESSLER. who survive JUDY. provided that if one of DEBRA's brothers does not survive JUDY but has issue who survive JUDY, the share such brother would have received had he survived JUDY shall be paid to his issue who survive JUDY. X: BLACK CHARITABLE LEAD TRUSTS 5:fc COM w14/42-11 Following are the dispositive provisions of each of the separate Trusts directed to be held upon the terms set forth in this Article. Each such Trust shall be known as the "BLACK CHARITABLE LEAD TRUST" preceded by the first name a Child of the Senior who survives the survivor of the Settlor and DEBRA, or of a Child of the Settlor who died before the survivor of the Senior and DEBRA but who had issue living on the death of such survivor. (A) Trust Term. The term of this Trust (the "Trust Term") shall commence on the date of death of the survivor of the Settlor and DEBRA (the "Beginning Date") and shall continue until the day before the tenth ( I09) anniversary of the Beginning Date. (B) Annuity. (I) On the day before each anniversary of the Beginning Date until the last day of the Trust Term (each such date being hereinafter referred to as an "Annuity Payment Date"), the Trustees shall pay to the Charitable Beneficiary from the Trust Fund an annuity amount (the "Annuity Amount") equal to the Applicable Percentage of the amount payable to the Trustees upon the death of the Settlor or DEBRA, as finally determined for Federal estate tax purposes in the Settlor's estate (the "Initial Fair Market Value"). The 13 ONUS 37471901.1 003835 0011 EFTA01127321  • annually, computed for any period at the rate of inter st that the federal income tax regulations prescribe for the Trust for such computation for su period. (E) Charitable Beneficiary. The Charitable Beneficiary of each Trust shall be such one or more Qualified Charitable Or anizations as the Child of the Settlor whose name appears in the name of the Trust, in his or er sole discretion, shall select from time to time. If such Child of the Senior is not living an competent at the time an Annuity Amount is required to be paid to a Charitable Beneficiary the Charitable Beneficiary shall be such one or more Qualified Charitable Organizations as the other Children of the Settlor who are then living, in their sole discretion, shall select. If none of the Settlor's Children is then competent, the Charitable Beneficiary shall be such one or more Qualified Charitable Organizations as the Trustees, in their sole discretion, shall select. If the Child of the Settlor whose name appears in the name of the Trust, or the other Children of the Settlor, as the case may be, fail to select the Charitable Beneficiary or Beneficiaries of a particular annuity amount prior to seven (7) days prior to the date on which such amount is payable, the Trustees shall select the Charitable Beneficiary or Beneficiaries. vt* .4e ) (F) Termination. This Trust shall terminate upon the last day of the Trust Term. Upon such termination, the rustees shall dispose of the Trust Fund for the benefit of the to the Child of the Senior whose ame appears in the name of the Trust, if such Child of the Settlor is then living, a Article XlI(I). If such Child of the Settlor is not then living, such property shall be divided into shares of the same number and size into which such property would have been divided if the Trustees had been directed to distribute such property to his or her issue living upon such termination, or, if there are none, into shares of the same number and size into which such property would have been divided if the Trustees had been directed to distribute such property to the Settlor's issue then living. The Trustees shall set aside for each issue of the Senior then living who would have received a share of such distribution the share he or she would have received, and shall dispose of such share for his or her benefit as-provide:14mi Article XII(I). 4C (G) Prohibited Transactions. Prior to the termination of the Trust, the Trustees are prohibited from engaging in any act of self-dealing as defined in § 494 I (d) of the Code, from retaining any excess business holdings as defined in § 4943(c) of the Code which would subject the Trust to tax under § 4943 of the Code, from making any investments which 15 DM US 37471901.1088635.0011 EFTA01127322  would subject the Trust to tax under § 4944 of the Code, and from making any taxable expenditures as defined in § 4945(d) of the Code. The Trustees shall make distributions at such time and in such manner as not to subject the Trust to tax under § 4942 of the Code. (H) Taxable Year. The taxable year of the Trust shall be the calendar year. Investment of Trust Assets. Nothing in this Trust Agreement shall be construed to restrict the Trustees from investing the Trust assets in a manner which could result in the annual realization of a reasonable amount of income or gain from the sale or disposition of Trust assets. 0)No Payment for Noncharitable Purposes. No payment shall be made from the Trust to any beneficiary other than a Qualified Charitable Organization prior to the termination of the Trust. (K) Qualification as Charitable Lead Annuity Trust. The Trust is intended to qualify as a charitable lead annuity trust, transfers to which arc deductible under § 2522 of the Code and the Treasury Regulations promulgated thereunder. Therefore, notwithstanding any other provision of this Trust Agreement, (i) no authorization or direction or other provisions contained in this Trust Agreement that would prevent the Trust from so qualifying shall apply to this Trust and (ii) any court having jurisdiction over this Trust Agreement shall construe this instrument accordingly. ?c, Vey— :b411. e-- m: RENUNCIATIONS of dic:,ps.sckion If DEB A renounces DEBRA's income interest in y portion of the roperty in any DEBRA R. BLA K MARITAL TRUST, or DEBRA's interes in any other gift under this Trust Agreement, the ropeny in which DEBRA haththe renounced interest) shall be paid to the trustees then serving under the BLACK 2006 FAMILY TRUST AGREEMENT, who shall add the same to the principal of the BLACK 2006 FAMILY TRUST and dispose of the same as provided in the BLACK 2006 FAMILY TRUST AGREEMENT. The Sett+ requests (but does not require) that DEBRA exercise DEBRA's power to renounce in such majtner as to maximize the amount of property that passes to the BLACK 2006 FAMILY TRUST, provided that such property passes to such Trust or Trusts without creating any significant f#deral and, if DEBRA deems appropriate, state estate tax liability. or DM_US 37471901-1.0U833 0011 16 es. • can inet.9-5 EFTA01127323  (6) An individual who is deemed to be a descendant of his or her adoptive parent by reason of adoption shall be deemed to be a descendant of all ancestors of such parent. An individual who is deemed not to be a descendant of a parent of his or hers who consented to his or her adoption by another shall be deemed not to be a descendant of any ancestor of such consenting parent unless such individual is a descendant of such ancestor without regard to his or her relationship to such consenting parent. An individual who is deemed not to be a descendant of his or her parent pursuant to subsection (3) or (4) shall be deemed not to be a descendant of any ancestor of such parent unless such individual is a descendant of such ancestor independent of his or her relationship to such parent. (7) For purposes of this section: (i) a child is the "Genetic Child" of each of the two individuals from whom he or she inherited one-half of his or her DNA; (ii) the man from whom a child inherited one-half of his or her DNA is such child's "Genetic Father," and (iii) the woman from whom a child inherited one-half of his or her DNA is such child's "Genetic Mother." (D) Survivorship. (I) For all purposes of this Trust Agreement, DEBRA shall be deemed to have died on the earliest date on which DEBRA is no longer the Settlor's spouse. (2) If DEBRA and the Settlor die under such circumstances that it is difficult or impossible to determine which one of them survived the other, then DEBRA shall be deemed to have predeceased the Settlor for purposes of Articles IIIand IV' and to have survived the Senior for all other purposes of this Trust Agreement. otc:Lt (3) If any issue of the Settlor dies within ninety (90) days of the date of the Settlor's death or the date of DEBRA's death, such issue shall be deemed to have predeceased the Senior or DEBRA, as the case may be, for all purposes of this Trust Agreement other than Article XVII. (4) Except as otherwise provided in subsection (2), any beneficiary whose entitlement to property (whether income or principal and whether outright or in trust) under this Trust Agreement depends upon his or her surviving the occurrence of some event who dies under such circumstances that it is difficult or impossible to determine whether or not he or she was alive upon the occurrence of such event shall be deemed for all purposes of this Trust Agreement to have died prior to the occurrence of such event. 19 DIA_t/S 37471901.10813$75 001I EFTA01127324  (E) Undisposed of Property. (I) If upon the occurrence of any event (the "Event") any share of a terminated Trust (other than a Trust held under Article IX) shall not be completely disposed of by the other provisions of this Trust Agreement, then such undisposed of share shall be paid as follows: (a) The Trustees shall distribute the sum of FIFTY MILLION DOLLARS ($50,000,000) to JUDY, if she is living at the time of the Event; provided, however, that the total sum of all amounts distributed to JUDY from all terminated Trusts shall not exceed the sum of FIFTY MILLION DOLLARS ($50,000,000). (b) The Trustees shall distribute the sum of TWENTY MILLION DOLLARS ($20,000,000) to JON RESSLER, if he is living at the time of the Event; provided, however, that the total sum of all amounts distributed to JON RESSLER from all terminated Trusts shall not exceed the sum of TWENTY MILLION DOLLARS ($20,000,000). The Trustees shall distribute the sum of TWENTY MILLION DOLLARS ($20,000,000) in equaleshar of IRA RESSLER and DOROTHY RESSLER who are living at the time of the Everim provided, however, that the total sum of all amounts distributed to IRA RESSLER and/or DOROTHY RESSLER from all terminated Trusts shall not exceed the sum of TWENTY MILLION DOLLARS ($20,000,000). e „ )‘.• (d) The Trustees shall distribute the sum of TEN MILLION DOLLARS -. • ($10,000,000) to each of the following individuals who is living at the time of the Event; provided, however, that the total sum of all amounts distributed to any such individual from all terminated Trusts shall not exceed the sum of TEN MILLION DOLLARS ($10,000,000): SAMANTHA RESSLER; N. 77 JILLIAN RESSLER; nc‘‘c ‘• cl a ANDREW RESSLER; REBECCA RESSLER; c't MATTHEW RESSLER; MICHAEL RESSLER; OLIVER RESSLER; NICKOLAS RESSLER; and JONATHAN LEVINE. 20 DM US S7471901-I OSSSIS.0011 EFTA01127325  (e) The Trustees shall distribute the sum of FIVE MILLION DOLLARS ($5,000,000) to MARILYN STEWART, if she is living at the time of the Event; provided, however, that the total sum of all amounts distributed to MARILYN STEWART from all terminated Trusts shall not exceed the sum of FIVE MILLION DOLLARS ($5,000,000). (f) If the aggregate of the property disposed of in paragraphs (a) through (e) shall be insufficient to make the dispositions described therein, such dispositions shall abate proportionately. (g) The balance of such undisposed of share, if any, after making the dispositions described in paragraphs (a) through (e), shall be paid to the LEON BLACK FAMILY FOUNDATION, INC. (the "Foundation"), if it is a Qualified Charitable Organization. The Settlor requests that the directors of the Foundation expend the disposition for the following purposes: (i) twenty-five percent (25%) thereof shall be used to promote medical research; (ii) twenty-five percent (25%) thereof shall be used to promote Judaica; (iii) twenty-five percent (25%) thereof shall be used to promote art and culture; and • (iv) twenty-five percent (25%) thereof shall be used to promote education. If the Foundation is not a Qualified Charitable Organization, the balance of such undisposed of share shall be paid to one or more Qualified Charitable Organizations in such amounts or proportions as the Trustees, in their sole discretion, shall determine, provided, however, that such property shall be used for the purposes provided in clauses (i) through (iv) of this paragraph (g). (2) If upon the occurrence of any event (the "Event") any share of a terminated Trust held under Article IX shall not be completely disposed of by the other provisions of this Trust Agreement, then such undisposed of share shall be paid to th Foundation. The Settlor requests that the directors of the Foundation expend the disposition fo ce-44O,-) the purposes provided in clauses (i) through (iv) of paragraph (g) of subsection (1)1-77; Foundation is not then a Qualified Charitable Organization, such undisposed of share shall be\ Ca--) paid to one or more Qualified Charitable Organizations in such amounts or proportions as the \.....------- Trustees, in their sole discretion, shall determine, provided, however, that such property shall be used for the purposes provided in clauses (i) through (iv) of paragraph (g) of subsection (1 .........„) t 21 DM_US 37471901.1.088839 ODI I EFTA01127326  (F) Assignment of Trust Interests. No disposition, charge, or encumbrance of the income or principal of any Trust, or any part thereof, by way of anticipation, alienation, or otherwise shall be valid or in any way binding upon the Trustees. No beneficiary of any Trust may assign, transfer, encumber or otherwise dispose of the income or principal of such Trust, or any part thereof, until it shall be paid to such beneficiary by the Trustees. The preceding provisions of this section shall not apply in the case of an exercise of a power of appointment. No income or principal of any Trust, or any part thereof, shall be liable to any claim of any creditor. (G) Judicial Intervention. Under no circumstances shall § 7-1.6 of the EPTL or any similar provisions of law apply to any Trust. (H) Exercise of Powers of Appointment. With regard to any power of appointment granted under this Trust Agreement that may be exercised by the Will of the holder of the power, the Trustees may rely on any instrument purporting to be a certified copy of the Will of the holder of the power. Commencing six (6) months after the death of the holder of the power, the Trustees (if they have no actual notice of the existence of the Will of the holder that exercises such power) shall incur no personal liability for administering the Trust as though the holder had not exercised the power. If the Will that exercises the power is subsequently discovered, any disposition of the Trust property by the Trustees shall be without prejudice to the rights of any appointee to recover the property from any Person to whom the Trustees have paid assets of the Trust or from the Trustees (in their capacities as Trustees) to the extent of any remaining Trust property. The exercise of a power of appointment granted under this Trust Agreement by the Will of DEBRA or by written instrument effective at DEBRA's death shall be 0 valid only if DEBRA is the Senior's spouse at the time of DEBRA's deathit r eI Property Paid to Trustees Under the Black 2006 Family Trutt' Agreement. Property directed to be disposed of for the benefit of a particular issue of the Senior pursuant to this subsection sherti-brelatideei.inh, b.° a‘parete-shapeer eettionsiseing . seventy -five of, sych-propptry-( A)TnMtn one try4ive-percent