THE (TRUST NAME) CHARITABLE REMAINDER UNITRUST This TRUST AGREEMENT is made and is effective on this day of (MONTH), (YEAR), by and between (DONOR 1) and (DONOR 2), residing at (DONORS' ADDRESS), as the Donors, and (TRUSTEE), located/residing at (TRUSTEE'S ADDRESS), and its successor(s), as the Trustee. I. AGREEMENT OF TRUST The Donors are irrevocably assigning, transferring and delivering on the date hereof to the Trustee all right, title and interest in and to the property described in Exhibit A, a copy of which is attached hereto and specifically made a part hereof by this reference. The Trustee hereby accepts such irrevocable gift and agrees to hold, administer and distribute such property, together with any other property which is or shall become an asset of this Trust, in accordance with the provisions of the Trust Agreement. The Trust Agreement is intended to create a charitable remainder unitrust within the meaning of Section 6 of Revenue Procedure 90-30 and Section 664(d)(2) of the Code. Certain terms throughout this Trust Agreement are defined in Article XII. II. DISTRIBUTIONS A. Income and Principal. During the Unitrust Period, the Trustee shall distribute the income and principal of this Trust as follows: 1. In each taxable year of this Trust, the Trustee shall pay the Unitrust Amount to (RECIPIENT 1) and (RECIPIENT 2) jointly and then to the survivor of them during the Unitrust Period. 2. The Unitrust Amount shall mean an amount equal to (FMV PERCENT) percent ((FMV PERCENT)%) of the Net Fair Market Value of the Trust Assets, as modified by Paragraphs C and D of this Article II. other than the Unitrust Amount may be paid to or for the use of any person or entity other than a 3. The Unitrust Amount shall be paid in equal installments at the end of each calendar quarter of each taxable year of this Trust from Net Income, and to the extent Net Income is insufficient, from principal. Any Net Income in excess of t he Unitrust Amount shall be added to principal. Notwithstanding any existing or hereafter enacted state law, no amount Charitable Organization. However, an amount shall not be deemed to be paid to or for the use of any person other than a Charitable Organization if the amount is transferred for full and adequate consideration. 4. The Trustee may pay the Unitrust Amount to the Recipients by payment directly to him or her or by deposit in any bank designated by him or her. If any Recipient 2000 - Kallina & Ackerman, LLP
should at any time be under a Disability, the Trustee may pay the Unitrust Amount to his or her Custodian. Any such payment for the benefit of such Recipient shall release the Trustee from its obligation to pay the Unitrust Amount, and the Trustee shall have no duty to supervise or inquire into the application of any funds so paid. 5. Upon the expiration of the Unitrust Period, the Trustee shall distribute the then principal and income of this Trust in accordance with Article III herein. B. Valuation Date. The Net Fair Market Value of the Trust Assets shall be determined annually on the first day of each taxable year of this Trust (including any short taxable year), in accordance with the provisions of Paragraph E of this Article II. C. Taxable Year and Short Taxable Years. The first taxable year of this Trust shall commence on the date this Trust is first funded and shall end on December 31st of that year. Subsequent taxable years shall be on a calendar year basis, except that the last taxable year of this Trust shall end on the date that this Trust terminates pursuant to Article III herein. In the case of a taxable year which is for a period of less than twelve (12) months (other than the taxable year in which the Unitrust Period ends), the amount described in Paragraph A.2 of this Article II shall be such amount multiplied by a fraction the numerator of which is the number of days in the taxable year of this Trust and the denominator of which is 365 (366 if February 29 is a day included in the numerator). In the case of the taxable year in which the Unitrust Period ends, the amount described in Paragraph A.2 of this Article II shall be such amount multiplied by a fraction the numerator of which is the number of days in the period beginning on the first day of such taxable year and ending on the date the Unitrust Period ends and the denominator of which is 365 (366 if February 29 is a day included in the numerator). Notwithstanding the foregoing, the obligation of the Trustee to pay the Unitrust Amount shall terminate with the regular periodic payment next preceding the date the Unitrust Period ends. D. Additional Contributions. Any person may contribute property to this Trust, with the consent of the Trustee, either during life or at death. For the taxable year of this Trust in which any additional contribution is made, the additional property shall be valued at the time of contribution and in accordance with Paragraph E of this Article II, and the amount described in Paragraph A.2 of this Article II shall be (FMV PERCENT) percent ((FMV PERCENT)%) of the sum of the following components: 2. That proportion of the value of the additional property (that was excluded 1. The Net Fair Market Value of the Trust Assets determined on the first day of the taxable year (and thus excluding the value of the additional property, and earned income from, and any appreciation on, such property after its contribution); and under Paragraph D.1 of this Article II immediately above) which the number of days in the period that begins with the date of contribution and ends with the earlier of the last day of such taxable year or the date the Unitrust Period ends bears to the number of days in the period that begins on the first day of such taxable year and ends with the earlier of the last day of such taxable year or the date the Unitrust Period ends. 2000 - Kallina & Ackerman, LLP 2
If an additional contribution is made by Will, the obligation to pay the Unitrust Amount payable with respect to the additional contribution shall commence with the date of death of the person under whose Will the additional contribution is made. Payment of that portion of the Unitrust Amount may be deferred, however, from such date of death to the end of the taxable year in which occurs the complete funding of the additional contribution. Within a reasonable time following such complete funding of the additional contribution, the Trustee shall pay to the Recipients, in the case of an underpayment, or receive from the Recipients, in the case of an overpayment, the difference between: (i) the Unitrust Amount with respect to such additional contribution actually paid to the Recipients, plus interest on such amounts, compounded annually, computed for any period at the rate of interest that the Regulations under Section 664 of the Code prescribe for this Trust for such computation for such period; and (ii) the Unitrust Amount with respect to such additional contribution payable, determined under the method described in Section 1.664-1(a)(5)(ii) of the Regulations. Any payments required to be made because of an underpayment shall be paid to the Recipients (or each Recipient's estate) who received the underpayment. Any repayments required to be made because of an overpayment shall be repaid by the Recipients (or each Recipient's estate) who received the overpayment. E. Fair Market Value. The Trustee shall compute the Net Fair Market Value of the Trust Assets considering all assets and liabilities without regard to whether particular items are taken into account in determining the Net Income; provided, however, in the event an Unmarketable Asset is transferred to or held by this Trust, and whenever this Trust is required to value such asset, the valuation shall be either performed exclusively by an Independent Special Trustee or determined by a current qualified appraisal, as defined in Regulation Section 1.170A- 13(c)(3), from a qualified appraiser, as defined in Regulation Section 1.170A-13(c)(5). All determinations of the Net Fair Market Value of the Trust Assets shall be in accordance with generally accepted fiduciary accounting principles and any United States Treasury requirements governing charitable remainder unitrusts. In any conflict, Treasury requirements shall prevail over generally accepted fiduciary accounting principles and any inconsistent provisions of this Trust Agreement. In the event that the Net Fair Market Value of the Trust Assets is determined incorrectly for any taxable year, the Trustee shall pay to the Recipients or their respective estates (in the case of an undervaluation), or be repaid by the Recipients or their respective estates (in the case of an overvaluation), an amount equal to the difference between the Unitrust Amount which the Trustee should have paid to the Recipients if the correct values were used, and the Unitrust Amount which the Trustee actually paid to the Recipients. Such payments or repayments shall be made within a reasonable period after the final determination of the correct value. F. Right to Revoke. Notwithstanding any of the foregoing provisions of this Trust Agreement: 1. (DONOR 2) hereby expressly reserves the power, exercisable only by her Will, to revoke and terminate the survivorship payments for (DONOR 1) from her interest in the property in this Trust. If she effectively exercises her testamentary power: 2000 - Kallina & Ackerman, LLP 3
(a) the Trustee shall upon her death distribute one-half of the then income and principal of this Trust, other than any amounts due to the Recipients, to the Donee(s) as set forth in Article III hereof; (b) the Trustee's obligation to make payments to her shall cease with the payment next preceding her death and one-half of the accruals for the period beginning with the payment date next preceding her death and ending with the date of her death shall on her death be paid to the Donee(s) as set forth in Article III hereof; and (c) the Trustee shall thereafter pay the Unitrust Amount to (DONOR 1) for the remainder of the Unitrust Period. 2. (DONOR 1) hereby expressly reserves the power, exercisable only by his Will, to revoke and terminate the survivorship payments for (DONOR 2) from his interest in the property in this Trust. If he effectively exercises his testamentary power: (a) the Trustee shall upon his death distribute one-half of the then income and principal of this Trust, other than any amounts due to the Recipients, to the Donee(s) as set forth in Article III hereof; (b) the Trustee's obligation to make payments to him shall cease with the payment next preceding his death and one-half of the accruals for the period beginning with the payment date next preceding his death and ending with the date of his death shall on his death be paid to the Donee(s) as set forth in Article III hereof; and (c) the Trustee shall thereafter pay the Unitrust Amount to (DONOR 2) for the remainder of the Unitrust Period. III. TERMINATION This Trust shall terminate within a reasonable time after the expiration of the Unitrust Period; provided, however, that such reasonable time shall not extend beyond the last day of the month in which occurs the ninetieth (90th) day following the date the Unitrust Period ends. Upon termination, the Trustee shall distribute all of the then principal and income of this Trust, free of trust, other than any amount due to the surviving Recipient or the surviving Recipient's estate, to (REMAINDERMAN). Notwithstanding any contrary provision of the Trust Agreement, prior to the expiration of the Unitrust Period, the Donors, and the survivor of them, shall retain the right, by acknowledged written instrument delivered to the Trustee, to change the Donee by adding or substituting new Charitable Organization(s) and/or omitting certain Charitable Organization(s) or by altering the share each is to receive. If more than one written instrument is so delivered to the Trustee, the written instrument bearing the latest date shall control and shall be deemed to revoke all prior written instruments unless the most recent one shall provide otherwise. If any Donee is not a Charitable Organization at the time when any principal or income of this Trust is to be distributed to it, the Trustee shall distribute such principal or income in proportion to the relative shares of the Donees which are so described and, if none of the Donees 2000 - Kallina & Ackerman, LLP 4
is so described, to one or more Charitable Organizations as the Trustee shall select and in such shares as it shall determine. IV. FIDUCIARY PROVISIONS A. Appointment of Trustee. (TRUSTEE) shall serve as Trustee of this Trust. In the event that (TRUSTEE) for any reason shall fail to serve as Trustee, then (ALTERNATE TRUSTEE) shall serve in the place and stead of (TRUSTEE). B. Appointment of Independent Special Trustee. 1. In the event an Unmarketable Asset is transferred to or held by this Trust, an Independent Special Trustee may be appointed by the Trustee. If so appointed, the Independent Special Trustee shall exclusively determine the fair market value of each Unmarketable Asset in accordance with such appointment. 2. The Trustee shall also have the right and option to appoint an Independent Special Trustee to take such action as the Trustee shall clearly define and delegate. 3. When (i) the sole Trustee is an Independent Trustee or (ii) more than one person is acting as Trustee hereunder and one of such Trustees is an Independent Trustee, such Independent Trustee shall have the right and option to act as an Independent Special Trustee hereunder. However, no Trustee (other than an acting Independent Special Trustee) shall have any power, duty or liability hereunder with respect to matters described in this Paragraph B. 4. The Independent Special Trustee shall have no powers, duties, or liabilities hereunder, except with respect to matters specifically described in this Paragraph B, and solely with respect to such matters, the Independent Special Trustee may exercise the rights, powers, authority and discretion, and be subject to the restrictions, obligations and duties, accorded to a Trustee pursuant to Article V herein. However, the Independent Special Trustee may not function in a manner which would jeopardize the status of this Trust as a charitable remainder trust as defined in Section 664 of the Code, the Regulations thereunder and Internal Revenue Service rulings governing the operation thereof. successor Fiduciary. Notwithstanding the above, in the event (i) a Fiduciary dies or is Disabled C. Resignation of Fiduciary. Any Fiduciary may resign at any time by giving a notice to any other Fiduciary and to the Recipient, or if the Recipient is Disabled, to the Custodian. Such resignation shall be effective upon the sooner to occur of: (i) sixty (60) days after the date of the notice of resignation, or (ii) the appointment of and acceptance by the or (ii) an Independent Special Trustee ceases to be an Independent Trustee, notice of resignation is deemed given, and the resignation shall be effective as of the date of such death, Disability or ceasing to be an Independent Trustee, as the case may be. The resigning Fiduciary (or its representative) shall file a final accounting and deliver all Trust assets under its charge and control to the successor Fiduciary as soon as possible, but in no event later than sixty (60) days 2000 - Kallina & Ackerman, LLP 5
following the date of the resignation notice being given or deemed given. Upon the relinquishment and delivery of all Trust assets and the final accounting to the successor Fiduciary, the resigning Fiduciary shall be discharged of all further duties and obligations hereunder. D. Removal of Fiduciary. The Recipients (or the survivor thereof) shall have the right with or without cause, to replace or discharge any acting Fiduciary. Upon the Disability of either Recipient, this right may be exercised by the Recipient who is not Disabled. Upon the Disability of the surviving Recipient or the Disability of both Recipients, this right may be exercised by his or her respective Custodian(s). Such removal shall be effective upon the sooner to occur of: (i) sixty (60) days after giving the Fiduciary being removed notice of such removal, or (ii) the appointment of and acceptance by the successor Fiduciary. The Fiduciary being removed shall file a final accounting and deliver all Trust assets under its charge and control to the successor Fiduciary within such sixty (60) day period. Upon the relinquishment and delivery of all Trust assets and the final accounting to the successor Fiduciary, the Fiduciary being removed shall be discharged of all further duties and obligations hereunder. E. Appointment of Successor Fiduciary. In the event any vacancy at any time occurs in the office of a Fiduciary hereunder, regardless of how caused, the Recipients (or the survivor thereof) shall have the right to fill such vacancy. Upon the Disability of eit her Recipient, this right may be exercised by the Recipient who is not Disabled. Upon the Disability of the surviving Recipient or the Disability of both Recipients, his or her respective Custodian(s) shall exercise such right. At the earliest possible date, all Trust assets and a final accounting shall be delivered to the successor Fiduciary. At such time as any successor Fiduciary delivers notice of acceptance to the Recipients, such successor Fiduciary shall have the rights, powers, authority and discretion, and be subject to the restrictions, obligations and duties, regarding this Trust within the appointed capacity. F. Liability of Successor Fiduciary. A successor Fiduciary shall not be responsible to any beneficiary of this Trust or to this Trust for any act or omission of a former Fiduciary, and shall not be required to audit or investigate the acts or administration of any former Fiduciary and shall be charged, upon issuing a simple receipt, with only the Trust assets so received. In addition, unless requested in writing by a beneficiary of this Trust and indemnified adequately (in such Fiduciary's discretion therefor), no successor Fiduciary shall have any duty to take action to seek redress for breach of trust by a former Fiduciary. G. Appointment of Co-Fiduciary. The Recipients (or the survivor thereof) shall have the right to appoint additional persons to act as Co-Fiduciaries hereunder. At such time as the newly-appo inted Co-Fiduciary delivers not ice of acceptance to the Recipients, t he newly- appointed Co-Fiduciary shall have the rights, powers, authority and discretion, and be subject to the restrictions, obligations and duties, regarding this Trust within the appointed capacity. In granting the foregoing right, it is not the intention of the Donors to require that any specific number of Fiduciaries serve in any one capacity hereunder simultaneously. 2000 - Kallina & Ackerman, LLP 6
H. Want of Trustee. If at any time for any reason this Trust shall be without a Trustee, (CORPORATE TRUSTEE) shall be and become the Trustee. I. Fiduciary Actions. When more than two persons are acting as Trustees (or Independent Special Trustees), the concurrence and joinder of a majority of them shall control in all matters pertaining to the administration hereunder. When two persons are acting as Trustees (or Independent Special Trustees), the concurrence and joinder of both Trustees (or Independent Special Trustees) shall be required. Such actions by the Fiduciaries shall be made either by vote at a meeting (in person or by telephone) or by written concurrence. When more than two persons are acting as Trustees (or Independent Special Trustees), any dissenting or abstaining Fiduciary may be absolved from personal liability by registering a written dissent or abstention with the records of this Trust. Such dissenting Fiduciary shall thereafter act with the other Fiduciaries in any manner necessary o r appropriate to effectuate the decision o f the majority. J. Compensation. A Fiduciary, and any agents of or successors to any Fiduciary, shall be entitled to reasonable compensation for services rendered in connection with this Trust. The amount of compensation shall be an amount equal to the customary and prevailing charges for services of a similar nature during the same period of time and in the same geographic locale. Any Fiduciary may waive any compensation at any time, by providing notice of such waiver to the Recipienst and another Fiduciary, if then serving. K. Retention of Agents. A Fiduciary may delegate investment and management funct ions to an agent as is prudent under the circumstances, but shall exercise reasonable care in selecting such agent. The duties of the agent shall be consistent with the terms and intent of this Trust, and the Fiduciary shall periodically review the agent's performance. L. Liability for Retaining Property. The Fiduciary shall not be liable for any loss or depreciation in value sustained by this Trust as a result of the Fiduciary accepting or retaining any property upon which hazardous materials or substances are discovered, unless the Fiduciary contributed to the loss or depreciation in value through willful default, willful misconduct or gross negligence. M. Indemnification. The Donors shall indemnify the Fiduciary against any claims (except for claims due to the Fiduciary's willful default, willful misconduct or gross negligence) filed against the Fiduciary (i) as an "owner" or "operator" under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 (as from time t o time amended) or any regulation thereunder and (ii) under any other federal, state or local environmental law, rule, regulation or order relating to the property contributed to this Trust by the Donors. N. Jurisdiction and Bond. This Trust shall not be administered under the jurisdiction of any court. Should a question or issue be submitted to a court of competent jurisdiction at any time or from time to time, such court shall acquire jurisdiction of only the question or issue submitted to it, and the jurisdiction of such court shall terminate upon the conclusion or 2000 - Kallina & Ackerman, LLP 7
settlement of such question or issue. No bond or other security shall be required of any person acting as a Fiduciary, whether serving jointly or alone. V. POWERS OF THE TRUSTEE All rights, powers, authority and discretion exercisable by the Trustee under this Trust or by law shall be binding and conclusive on all interested parties; shall be exercisable by the Trustee in its sole and absolute discretion; shall be exercisable only in a fiduciary capacity and in the best interests of the beneficiaries; shall be construed in the broadest possible manner; and shall be exercisable without prior or subsequent application to any court under the jurisdiction of which this Trust may be administered. The Trustee is under a duty to the beneficiaries to invest and manage the funds of the Trust as a prudent investor would, in a manner that is fair to all beneficiaries as a reflection of the Trust's purposes, terms, and obligations and in light of the circumstances of the Trust and the relevant circumstances of its beneficiaries. The investment decisions of a Trustee shall be evaluated not in isolation, but in the context of the investment portfolio as a whole and as part of an overall investment strategy reasonably suited to the Trust. Not in derogation of or in limitation upon the powers, authority and discretion conferred by law upon a trustee, the Trustee is vested with the following rights, powers, authority and discretion: A. To alter, repair, improve, erect buildings upon, demolish, manage, partition, mortgage, lease for any period, including a period in excess of any fixed by statute or extending beyond the duration of this Trust, exchange, grant options to lease or to buy, and sell or dispose of, at public or private sale, and upon such conditions and such terms as to cash and credit as it deems advisable, any of the Trust assets; B. To compromise, settle, subordinate, arbitrate, extend, renew, modify, or release, in whole or in part, any claim held by it or held against any of the Trust assets; C. To continue to hold the property transferred to it hereunder in the form in which it shall be when transferred or as the form thereof may be changed pursuant to the other provisions of the Trust Agreement, without regard to the limitations imposed by law upon the investment of trust funds; D. To borrow money and to encumber or hypothecate Trust assets whether by mortgage, deed of trust, pledge or otherwise; E. To commence or defend litigation with respect to the Trust assets, at the expense of the Trust assets; 2000 - Kallina & Ackerman, LLP 8
F. To employ any person, firm, corporation, bank, or trust company for advice with respect to investment policy or any other matter; but the Trustee may follow or refrain from following any recommendation so obtained and such recommendations shall not in any way limit the discretionary power and authority conferred upon the Trustee hereunder with respect to investments or other matters; G. To retain or discharge accountants, attorneys, administrators, brokers, investment advisers, investment counselors and other agents, and to pay reasonable compensation for their services; H. To enter into any and all agreements with the Internal Revenue Service or any other governmental body and to execute, from time to time, any declarations of policy or disclaimers restricting the powers, authority and discretion granted to the Trustee; I. To invest and to reinvest the Trust assets in every kind of property, real, personal or mixed, and every kind of investment; and nothing in the Trust Agreement shall be construed to restrict the Trustee 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; J. With respect to any investment held by the Trustee, to participate in and consent to any corporate or financial reorganization, dissolution, liquidation, merger, consolidation, sale or lease, or in and to any other change in its financial structure; and to become a depositor with any protective, reorganization, or similar committee, and to make any necessary payments incident to the foregoing; to organize or participate in the organization of corporations or other business entities, and to transfer to them any part or all of the Trust assets in exchange for an investment therein; to exercise or to sell any conversion, subscription, or similar rights; and in general to exercise in respect to any investment the unrestricted rights of a personal owner, including voting in person and granting proxies, discretionary, general, or otherwise; K. In any case in which the Trustee makes any payments or other distribution of Trust assets, to make such payment or distribution in money or in kind, including undivided interests in any property, or partly in money and partly in kind; and in the case of any distribution in kind to any Donee, the adjusted basis of the Trust property distributed shall be fairly representative of the adjusted bases of all Trust properties available for distribution on the date of distribution; L. To apportion and allocate Trust receipts and expenses between Net Income and principal accounts (provided that no pre-gift appreciation shall be allocable to Net Income); M. To retain the services of an independent appraiser to assist in valuing assets of this Trust and to reasonably compensate such appraiser for such services; N. If required by the Code, the Regulations or any Internal Revenue Service rulings thereunder to maintain the status of the Trust as a charitable remainder unitrust, to set aside a 2000 - Kallina & Ackerman, LLP 9
reserve or allowance from Trust income for the depreciation or depletion of any property transferred to or invested in by the Trust; otherwise, the Trustee shall have discretion whether or not to set aside such a reserve; O. With respect to any environmental hazards on Trust propert y: 1. To take all appropriate actions to prevent, identify or respond to actual or threatened violations of any environmental law, rule or regulation, including compliance with any federal, state or local agency or court order directing an assessment, abatement or cleanup of any environmental hazard; 2. To disclaim, in whole or in part, any interests in property for any reason, including but not limited to, a concern that such property could cause potential liability under any federal, state, or local environmental law, rule or regulation; and/or 3. To set aside any interests in property, which could cause potential liability under any federal, state, or local environmental law, rule or regulation as a separate trust to be held and administered upon the same terms as those governing the remaining Trust assets; P. To designate as custodian of any Trust property any business entity authorized and engaged in the business of brokers or dealers in securities; Q. To the extent permitted by law, to register any of such property in its name as Trustee or in the names of nominees, or to take and keep the same unregistered or in bearer form, or in such condition as to pass by delivery; and/or R. Whenever the Trust acquires an Annuity Contract, to exercise with respect to such Annuity Contract any rights and discretion as owner thereof, as limited hereby, including but not limited to the right or discretion to: 1. Making partial or total withdrawals or surrenders from the Annuity Contract; provided however, the Trustee gives due regard to any withdrawal or partial surrender penalties that may be imposed and to the best interest of all Trust beneficiaries; 2. Electing any annuity option(s) which guarantees the payment to the Trust by or upon the death of the annuitant of an amount at least equal to the surrender value of the Annuity Contract(s) as of the day before the day the annuity payments commence; 3. Designating the day the annuity payments commence; and/or 4. Seeing to the allocation of any payments of any type received from the Annuity Contract between principal and income as is required by this Trust. Anything in the Trust Agreement to the contrary notwithstanding, it is the intention of the Donors to create a qualifying charitable remainder unitrust under Section 664 of the Code; 2000 - Kallina & Ackerman, LLP 10
therefore, no rights, powers, authority or discretion either otherwise granted by the Trust Agreement or by applicable state law that exceed or are inconsistent with those allowed under Section 664 of the Code and the Regulations thereunder are to be possessed or exercised by the Trustee. At no time and under no circumstances shall a Donor serving as a Trustee exercise any power that would result in this Trust being treated as a grantor trust under Subpart E of the Code. VI. APPLICABLE LAW The validity of this Trust shall be controlled by the laws of the State of (STATE LAW). The construction and administration of this Trust shall be controlled by the laws of the State of (STATE LAW). However, in any conflict with Section 664 of the Code, the Regulations thereunder or any other existing or hereafter promulgated legislative or Treasury requirements for the qualification of this Trust and for the Donors' obtaining the full benefit of any income, gift and estate tax charitable deductions to which the Donors and the Donors' estates may be entitled, Section 664 of the Code, the Regulations thereunder and the legislative and Treasury requirements shall govern. VII. IRREVOCABILITY AND AMENDMENT This Trust shall be irrevocable. However, the Trustee shall have the power, acting alone, to amend the Trust Agreement in any manner required for the sole purpose of ensuring that this Trust qualifies and continues to qualify as a charitable remainder unitrust within the meaning of Section 664 of the Code and the Regulations thereunder. VIII. PROHIBITED ACTS Notwithstanding any other provision of the Trust Agreement, no Fiduciary shall (except for the payment of the Unitrust Amount) engage in any act of self-dealing (as defined in Section 4941(d) of the Code), retain any excess business holdings (as defined in Section 4943(c) of the Code) which would subject this Trust to tax under Section 4943 of the Code, make any investments which would subject this Trust to tax under Section 4944 of the Code, or make any taxable expenditure (as defined in Section 4945(d) of the Code). If Section 4942 of the Code is deemed applicable to this Trust by reason of Section 508(e) of the Code or otherwise, then the Trustee shall make distributions at such times and in such manner as not to subject this Trust to tax under Section 4942 of the Code. IX. INTENTION TO CREATE UNITRUST It is the Donors' intention to obtain the full benefit of any income, gift and estate tax charitable contribution deductions to which the Donors and their estates may be entitled to under the Code and for this Trust to qualify as a charitable remainder unitrust within the meaning of 2000 - Kallina & Ackerman, LLP 11
Section 664(d)(2) of the Code and the Regulations thereunder. Accordingly, the Trust Agreement shall be interpreted and administered, and the Trust assets shall be valued, managed and invested, in a manner consistent with the Donors' intent and the provisions of such Section, the Regulations thereunder and the Internal Revenue Service rulings relating thereto. X. DEATH TAXES Donor therein, shall be payable from the estates of the Donors, excluding the assets of this Trust. No Death Taxes with respect to this Trust shall be allocated to or be recoverable from this Trust. The Donors agree to provide in their Wills, or any other appropriate estate planning documents, that any Death Taxes arising from the creation of this Trust, or the interest of any The Donors hereby impose an affirmative obligation on their respective estates to pay all of such Death Taxes (if any) from sources other than this Trust and agree that this obligation may be enforced by the Trustee or any Donee, or by each Donor, acting alone or together. Each of the Donors has provided for the payment of any death taxes from sources other than this Trust Agreement. Nevertheless, if for any reason, this Trust becomes liable for death taxes on the death of the first of the Donors to die, the interest of the surviving Recipient in the one-half interest of the deceased Donor in this Trust shall take effect only if the surviving Recipient furnishes the funds for payment of any death taxes for which this Trust may be liable. If the surviving Recipient fails to furnish those funds, it shall be deemed for all purposes of this Trust Agreement that the first of the Donors to die exercised the right in his or her Will described in Paragraphs F(1) or F(2) of Article II herein. This Article X is included herein specifically to comply with the intent and provisions of Revenue Ruling 82-128. Should Death Taxes with respect to this Trust become due as a result of additional contributions by any person other than the Donors, then the provisions of this Article X shall apply to such other person as if the other person were a Donor for purposes of this Article X. XI. MISCELLANEOUS A. Construction. Unless the context requires otherwise, words in the singular may be construed as denoting the plural, and words in the plural may be construed as denoting the singular. Words of one gender may be construed as denoting another gender as is appropriate within such context. B. Headings. Titles and headings in the Trust Agreement are added for convenient reference, and shall not be deemed to alter or affect the meaning of any provision hereof. C. Severability. If any provision or part of any provision of the Trust Agreement shall for any reason be held invalid, illegal or unenforceable in any respect by a court of competent jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision of the Trust Agreement and the Trust Agreement shall be construed as if such invalid, 2000 - Kallina & Ackerman, LLP 12
illegal or unenforceable provision or part thereof had never been contained herein, but only to the extent of its invalidity, illegalit y or unenforceability. D. Counterparts. The Trust Agreement has been executed in triplicate, each of which shall be an original and each of which shall constitute the entire Trust Agreement without reference to or the necessity of producing the other counterparts. E. Spendthrift. The Recipients shall not have any power to sell, transfer, assign, pledge, mortgage, or alienate all or any part of their beneficial interest in this Trust in any manner whatsoever. The interest of the Recipients shall not be subject to the claims of their creditors or to attachment, execution, bankruptcy proceedings or any other legal process. XII. DEFINITIONS For purposes of the Trust Agreement, the following words and phrases shall have the meanings ascribed to them in this Article XII, as follows: "Annuity Contract" shall mean any kind of annuity to be paid by an insurance company or by an organization regularly engaged in issuing annuity contracts. "Charitable Organization" shall mean an organization described in each of Sections 170(b)(1)(A), 170(c), 2055(a) and 2522(a) of the Code. "Code" shall mean the Internal Revenue Code of 1986, as amended from time to time, and references to a Section of the Code shall include any successor provisions to the Section referred to and to any corresponding provisions of any subsequent federal tax laws. "Custodian" shall mean a trustee of any trust established exclusively for the benefit of a Recipient, if such a trust has been established, or the conservator, custodian, person holding an effective durable power of attorney or legally appointed guardian of the person or estate of a Recipient. "Death Taxes" shall mean any and all federal estate taxes, state death taxes or any other estate, death, inheritance or welfare transfer taxes. where the person is domiciled) certify that such person is unable to properly care for his or her "Disability" or "Disabled" shall mean when (i) a guardian or conservator of an individual's person or estate is duly appointed by a court of competent jurisdiction and continues to serve in such capacity, (ii) two physicians (licensed to practice under the laws of the state person or property, (iii) an individual is a minor under the laws of the state where he or she is domiciled, or (iv) an individual disappears for an unreasonable period of time with no apparent explanation for such disappearance. 2000 - Kallina & Ackerman, LLP 13
"Donee" or "Donees" shall mean any Charitable Organization selected to be a charitable remainderman (or remaindermen) pursuant to Article III of this Trust Agreement. "Donor" or "Donors" shall mean the settlor(s) of this Trust as named on the first page of the Trust Agreement, who have signed the Trust Agreement. "Fiduciary" or "Fiduciaries" shall mean, as the context requires, each Trustee and/or Independent Special Trustee, and their successor(s). specific purposes provided in Paragraph B of Article IV, and who or which is an "Independent "Independent Special Trustee" or "Independent Special Trustees" shall mean each individual and/or entity who or which is appointed as a fiduciary of this Trust, solely for the Trustee", and any successor(s) thereto. "Independent Trustee" shall have the meaning ascribed to it in Regulation Section 1.664-1(a)(7)(iii). "Net Fair Market Value of the Trust Assets" shall mean the net fair market value of the assets owned by the Trust as described in Paragraphs B and E of Article II of this Trust. "Net Income" shall mean the net income of this Trust as determined by the Trustee pursuant to the terms of the Trust Agreement, Section 643(b) of the Code and the Regulations thereunder. "notice" or "notify" shall mean a communication in writing, signed by the party sending such communication, mailed by certified mail, return receipt requested, or personally hand delivered, dated receipt obtained. The effective date of such notice shall be deemed to be the date of mailing of such certified mail or the actual date of hand delivery, as the case may be. Notice shall be addressed to such person(s) at such person(s) last known address. "Recipient" or "Recipients" shall mean each individual who is entitled to receive the Unitrust Amount pursuant to Paragraph A.1 of Article II of this Trust. "Regulations" shall mean the regulations published under 26 Code of Federal Regulations as in effect on the date of execution of this Trust Agreement, or, in the event that any such regulation is amended or superseded thereafter, to the regulation (or any successor regulation) as so amended. "Trust" shall mean the charitable remainder unitrust established under the Trust Agreement, otherwise known as "THE (TRUSTEE NAME) CHARITABLE REMAINDER UNITRUST". "Trust Agreement" shall mean this trust instrument signed by all parties hereto. 2000 - Kallina & Ackerman, LLP 14
"Trustee", "it" or "its" shall mean each individual or entity acting in a fiduciary capacity who or which is named on the first page of the Trust Agreement, and who or which signed the Trust Agreement, and its successor(s). Trust. "Unitrust Amount" shall mean the amount described in Paragraph A.2 of Article II of this "Unitrust Period" shall mean the period of time which begins on the date this Trust is first funded and ends on the date upon which the last surviving Recipient dies. "Unmarketable Asset" shall have the meaning ascribed to it in Regulation Section 1.664-1(a)(7)(ii). IN WITNESS WHEREOF, the parties hereto have executed this Trust Agreement on the date first above written. DONORS: (DONOR 1) (DONOR 2) TRUSTEE: (TRUSTEE) [ACKNOWLEDGMENT & WITNESS AS REQUIRED UNDER STATE LAW] 2000 - Kallina & Ackerman, LLP 15
EXHIBIT A THE (TRUST NAME) CHARITABLE REMAINDER UNITRUST Item No. Date of Transfer Description Receipt of the above described assets is hereby acknowledged this (MONTH), (TAX YEAR). TRUSTEE: day of (TRUSTEE) F:\PGDC\Forms\005.wpd 2000 - Kallina & Ackerman, LLP 16