RECEIPT, RELEASE, AND REFUNDING AGREEMENT
All Beneficiaries
Eldon M. Briarwood Irrevocable Family Trust (EIN: 13-7284915)
May 15, 2024
Prepared by Calderwood & Harkness LLP
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PREAMBLE
This Receipt, Release, and Refunding Agreement (this "Agreement") is entered into as of May 15, 2024, by and among the following parties:
(1) Margot S. Briarwood, an individual residing at 14 Waverly Place, Unit 4W, New York, NY 10003, acting in her dual capacities as (i) Successor Individual Trustee of the Eldon M. Briarwood Irrevocable Family Trust (the "Trust") and (ii) a beneficiary holding a forty-five percent (45%) beneficial interest in the Trust;
(2) Tobias E. Briarwood, an individual residing at 88 Round Hill Road, Greenwich, CT 06831, acting in his capacity as a beneficiary holding a thirty-five percent (35%) beneficial interest in the Trust;
(3) Nadia Briarwood-Chen, an individual residing at 341 Sterling Place, Apt. 3, Brooklyn, NY 11238, acting in her capacity as a beneficiary holding a twenty percent (20%) beneficial interest in the Trust; and
(4) Caldwell Fiduciary Services Inc., a New York–chartered trust company with offices at 401 Lexington Avenue, 14th Floor, New York, NY 10174, acting in its capacity as Institutional Co-Trustee of the Trust, represented herein by Howard R. Phelan, Senior Vice President.
Margot S. Briarwood, Tobias E. Briarwood, and Nadia Briarwood-Chen are referred to herein collectively as the "Beneficiaries" and individually as a "Beneficiary." Margot S. Briarwood, in her capacity as Successor Individual Trustee, and Caldwell Fiduciary Services Inc., in its capacity as Institutional Co-Trustee, are referred to herein collectively as the "Trustees" and individually as a "Trustee." All of the foregoing persons and entities are referred to herein collectively as the "Parties" and individually as a "Party."
RECITALS
The Parties enter into this Agreement on the basis of the following recitals of fact, each of which is incorporated herein by reference and made a material part of this Agreement:
A. Establishment of the Trust. The Eldon M. Briarwood Irrevocable Family Trust was established pursuant to the Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998, as amended by a First Amendment dated March 3, 2008, and as further amended by a Second Amendment dated December 31, 2015 (as so amended, the "Trust Agreement"). The Trust is an irrevocable inter vivos trust governed by the laws of the State of New York. The situs of the Trust is New York County, New York. The Trust's federal employer identification number is 13-7284915.
B. Original Trustees and Institutional Co-Trustee. Eldon M. Briarwood ("Eldon" or the "Grantor") served as the original individual trustee of the Trust from the Trust's inception on June 12, 1998. Caldwell Fiduciary Services Inc. ("Caldwell") was appointed as the institutional co-trustee at the Trust's inception on June 12, 1998, and has served continuously in that capacity from such date through the date hereof. In its capacity as Institutional Co-Trustee, Caldwell has been responsible for the custody of Trust assets, record-keeping, and tax reporting. Throughout its tenure, Caldwell maintained the Trust's assets in Trust Account No. CFT-00298174 at its offices in New York, New York.
C. Incapacity and Trustee Succession. On December 3, 2023, Dr. Annette Volkov, the Grantor's attending physician in Larchmont, New York, certified that Eldon M. Briarwood was permanently incapacitated within the meaning of, and pursuant to the standard set forth in, Article VII, Section 7.2 of the Trust Agreement. Pursuant to Article VII, Section 7.3 of the Trust Agreement, which designates the Grantor's eldest child as the first successor individual trustee, Margot S. Briarwood was named as the Successor Individual Trustee of the Trust. Margot formally accepted her appointment as Successor Individual Trustee effective January 22, 2024, and a Certificate of Successor Trustee Appointment was duly executed and circulated to all Beneficiaries and to Caldwell on such date. Caldwell acknowledged Margot's appointment as Successor Individual Trustee in writing on January 24, 2024.
D. Beneficial Interests. The Trust Agreement provides for the following beneficial interests in the Trust corpus:
(i) Margot S. Briarwood: forty-five percent (45%), which, based on the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000) as of December 31, 2023, represents an entitlement of Eighteen Million Six Hundred Seventy-Five Thousand Dollars ($18,675,000);
(ii) Tobias E. Briarwood: thirty-five percent (35%), which, based on the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000) as of December 31, 2023, represents an entitlement of Fourteen Million Five Hundred Twenty-Five Thousand Dollars ($14,525,000); and
(iii) Nadia Briarwood-Chen: twenty percent (20%), which, based on the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000) as of December 31, 2023, represents an entitlement of Eight Million Three Hundred Thousand Dollars ($8,300,000).
E. Trust Corpus. As of December 31, 2023, the total Trust corpus was valued at Forty-One Million Five Hundred Thousand Dollars ($41,500,000), consisting of the following assets:
(i) Marketable securities held in custody at Caldwell: Eighteen Million Three Hundred Forty Thousand Dollars ($18,340,000);
(ii) Real estate — 14 Waverly Place, Unit 4W, New York, NY 10003, consisting of shares in Waverly Place Owners Corp. representing a cooperative apartment of approximately 2,400 square feet: Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000);
(iii) Real estate — 602 Halsey Street, Brooklyn, NY 11233, a four-unit residential brownstone of approximately 4,800 square feet, designated as Block 1684, Lot 42, Kings County, New York: Four Million Two Hundred Thousand Dollars ($4,200,000);
(iv) Real estate — 27 Fenimore Road, Larchmont, NY 10538, a single-family residence of approximately 5,200 square feet on approximately 0.82 acres, designated as Section 9, Block 32, Lot 14, Village of Larchmont, Town of Mamaroneck, Westchester County, New York: Six Million One Hundred Fifty Thousand Dollars ($6,150,000);
(v) Cash and money-market funds: Two Million Two Hundred Ten Thousand Dollars ($2,210,000); and
(vi) Private-fund interests in Ashgrove Capital Partners Fund III LP: One Million Eight Hundred Fifty Thousand Dollars ($1,850,000).
F. Independent Appraisals. On February 14, 2024, Caldwell engaged Pinnacle Valuation Group LLC ("Pinnacle") to provide independent fair-market-value appraisals of the three trust-held real-estate parcels described above. The lead appraiser designated by Pinnacle was Derek T. Winstead, MAI. Pinnacle delivered its appraisal reports on March 1, 2024, each with a valuation date of March 1, 2024, as follows:
(i) 14 Waverly Place, Unit 4W, New York, NY 10003: appraised fair market value of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) (Report No. PVG-2024-0441);
(ii) 602 Halsey Street, Brooklyn, NY 11233: appraised fair market value of Four Million Two Hundred Thousand Dollars ($4,200,000) (Report No. PVG-2024-0442); and
(iii) 27 Fenimore Road, Larchmont, NY 10538: appraised fair market value of Six Million One Hundred Fifty Thousand Dollars ($6,150,000) (Report No. PVG-2024-0443).
The total appraised fair market value of the three real-estate parcels was Nineteen Million One Hundred Thousand Dollars ($19,100,000).
G. Consent and Distribution Agreement. On April 8, 2024, the Trustees and all Beneficiaries executed a Consent and Distribution Agreement (the "Distribution Agreement") authorizing the in-kind distribution of Trust real property and the payment of cash equalization payments pursuant to Article X, Section 10.4 of the Trust Agreement. The Distribution Agreement was reviewed by Reedlaw & Stein LLP (Janet C. Okonkwo, Partner), independent counsel retained by Tobias E. Briarwood, prior to Tobias's execution thereof.
H. Distributions Made. The following distributions have been completed pursuant to the Distribution Agreement:
In-Kind Real-Property Distributions:
(i) To Margot S. Briarwood: (a) 14 Waverly Place, Unit 4W, New York, NY 10003 (shares in Waverly Place Owners Corp.), with an appraised fair market value of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) and a carryover tax basis of One Million Six Hundred Twenty Thousand Dollars ($1,620,000); and (b) 602 Halsey Street, Brooklyn, NY 11233 (Block 1684, Lot 42, Kings County), with an appraised fair market value of Four Million Two Hundred Thousand Dollars ($4,200,000) and a carryover tax basis of Nine Hundred Eighty-Five Thousand Dollars ($985,000). The total in-kind distribution to Margot was Twelve Million Nine Hundred Fifty Thousand Dollars ($12,950,000).
(ii) To Tobias E. Briarwood: 27 Fenimore Road, Larchmont, NY 10538 (Section 9, Block 32, Lot 14, Village of Larchmont, Town of Mamaroneck, Westchester County), with an appraised fair market value of Six Million One Hundred Fifty Thousand Dollars ($6,150,000) and a carryover tax basis of Two Million Three Hundred Forty Thousand Dollars ($2,340,000). The total in-kind distribution to Tobias was Six Million One Hundred Fifty Thousand Dollars ($6,150,000).
Deeds and Title:
All deeds and conveyance instruments were duly executed and recorded, and owner's title-insurance policies were issued by Trident National Title Corp. on April 15, 2024, covering each of the real-property parcels distributed in kind.
Cash Equalization Payments:
The following cash equalization payments were wired on April 22, 2024, from Trust Account No. CFT-00298174 maintained by Caldwell:
(i) To Margot S. Briarwood: Five Million Seven Hundred Twenty-Five Thousand Dollars ($5,725,000) (representing the difference between Margot's total entitlement of $18,675,000 and the fair market value of her in-kind distribution of $12,950,000);
(ii) To Tobias E. Briarwood: Eight Million Three Hundred Seventy-Five Thousand Dollars ($8,375,000) (representing the difference between Tobias's total entitlement of $14,525,000 and the fair market value of his in-kind distribution of $6,150,000); and
(iii) To Nadia Briarwood-Chen: Eight Million Three Hundred Thousand Dollars ($8,300,000) (representing the entirety of Nadia's total entitlement of $8,300,000, she having received no in-kind distribution).
The total cash equalization payments to all Beneficiaries were Twenty-Two Million Four Hundred Thousand Dollars ($22,400,000).
Securities and Fund Interests:
The cash equalization payments were funded from the Trust's liquid assets, including the marketable securities ($18,340,000), cash and money-market funds ($2,210,000), and private-fund interests in Ashgrove Capital Partners Fund III LP ($1,850,000), aggregating Twenty-Two Million Four Hundred Thousand Dollars ($22,400,000).
Total Distributions:
The aggregate total of all distributions to all Beneficiaries was Forty-One Million Five Hundred Thousand Dollars ($41,500,000), consisting of Nineteen Million One Hundred Thousand Dollars ($19,100,000) in real-estate distributions and Twenty-Two Million Four Hundred Thousand Dollars ($22,400,000) in cash equalization payments.
I. Administration Costs. The following administration costs were borne by the Trust corpus and were deducted from the liquid-asset pool prior to the computation of final cash equalization payments, reducing such cash equalization payments proportionally:
(i) Calderwood & Harkness LLP legal fees (flat engagement): One Hundred Eighty-Five Thousand Dollars ($185,000);
(ii) Pinnacle Valuation Group LLC appraisal fees (three parcels): Thirty-Four Thousand Five Hundred Dollars ($34,500);
(iii) Trident National Title Corp. title-insurance premiums (three policies): Forty-Seven Thousand Two Hundred Dollars ($47,200);
(iv) Real-property transfer taxes: Eighty-Four Thousand Four Hundred Fifty Dollars ($84,450) in the aggregate, consisting of (a) New York City Real Property Transfer Tax on 602 Halsey Street, Brooklyn, NY 11233, at the rate of 1.425%, in the amount of Fifty-Nine Thousand Eight Hundred Fifty Dollars ($59,850), and (b) New York State Transfer Tax on 27 Fenimore Road, Larchmont, NY 10538, at the rate of $2.00 per $500 of consideration, in the amount of Twenty-Four Thousand Six Hundred Dollars ($24,600) (note: the transfer of 14 Waverly Place, Unit 4W, was exempt from the NYC RPTT as a cooperative share transfer);
(v) Halford & Kline CPAs final fiduciary income-tax return preparation: Twelve Thousand Eight Hundred Dollars ($12,800);
(vi) Recording fees and miscellaneous costs: Three Thousand Six Hundred Dollars ($3,600);
(vii) Total administration costs: Three Hundred Sixty-Seven Thousand Five Hundred Fifty Dollars ($367,550).
In addition, Caldwell's annual administrative fee, at a rate of 0.12% of corpus ($49,800 per year), was separately accounted for and paid through the date of Trust termination and is not included in the foregoing itemization of administration costs.
J. Final Trust Accounting. A final trust accounting was delivered to all Beneficiaries on May 1, 2024. Halford & Kline CPAs (Lorraine M. Casella, CPA, engagement partner) has been engaged to prepare the final Form 1041 fiduciary income-tax return for the short tax year ending upon Trust termination. It is acknowledged that the grantor trust status of the Trust terminated on December 31, 2015, when Eldon M. Briarwood relinquished his swap power under Section 675(4) of the Internal Revenue Code of 1986, as amended (the "Code"), pursuant to the Second Amendment to the Trust Agreement. Accordingly, the Trust has been classified and taxed as a non-grantor trust for all tax years commencing January 1, 2016, through the date of Trust termination.
K. Purpose of this Agreement. The Parties desire to memorialize each Beneficiary's acknowledgment of receipt of their respective distributions, to release the Trustees from liability in connection with the creation, administration, investment, management, and termination of the Trust, and to provide for refunding obligations in the event that any post-distribution liabilities are asserted, thereby enabling the orderly termination of the Trust and the discharge of the Trustees.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual promises and agreements set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE I — DEFINITIONS
Section 1.1 — Defined Terms. As used in this Agreement, the following terms shall have the meanings ascribed to them below. Capitalized terms used but not defined herein shall have the meanings ascribed to them in the Trust Agreement.
(a) "Administration Costs" means the costs and expenses incurred by the Trust in connection with the administration, distribution, and termination of the Trust, as set forth in Recital I hereof and as itemized in Exhibit B attached hereto, in the aggregate amount of Three Hundred Sixty-Seven Thousand Five Hundred Fifty Dollars ($367,550).
(b) "Agreement" means this Receipt, Release, and Refunding Agreement, including all exhibits and schedules attached hereto, as may be amended from time to time in accordance with Section 9.3 hereof.
(c) "Appraised Values" means the independent fair-market-value appraisals of the Trust's real-estate parcels delivered by Pinnacle Valuation Group LLC on March 1, 2024, as described in Recital F hereof.
(d) "Beneficiaries" means, collectively, Margot S. Briarwood, Tobias E. Briarwood, and Nadia Briarwood-Chen, and "Beneficiary" means any one of them individually.
(e) "Cash Equalization Payments" means the cash payments wired to the Beneficiaries on April 22, 2024, in the amounts set forth in Recital H hereof and in Exhibit A attached hereto, to equalize the aggregate distributions among the Beneficiaries in accordance with their respective beneficial interests.
(f) "Code" means the Internal Revenue Code of 1986, as amended, and the Treasury Regulations promulgated thereunder.
(g) "Distribution Agreement" means the Consent and Distribution Agreement dated April 8, 2024, executed by the Trustees and all Beneficiaries, authorizing the in-kind distribution of Trust real property and the payment of Cash Equalization Payments pursuant to Article X, Section 10.4 of the Trust Agreement.
(h) "Distributions" means, collectively, the In-Kind Distributions and the Cash Equalization Payments, as described in Recital H hereof and as set forth in Exhibit A attached hereto.
(i) "Final Accounting" means the final trust accounting delivered to all Beneficiaries on May 1, 2024, covering the period from January 1, 2024, through the date of Trust termination.
(j) "In-Kind Distributions" means the distributions of Trust real property to the Beneficiaries as described in Recital H hereof, consisting of (i) the distribution of 14 Waverly Place, Unit 4W, and 602 Halsey Street to Margot S. Briarwood, and (ii) the distribution of 27 Fenimore Road to Tobias E. Briarwood.
(k) "Post-Distribution Liability" has the meaning set forth in Section 5.1 hereof.
(l) "Released Parties" means, collectively, (i) Margot S. Briarwood, in her capacity as Successor Individual Trustee of the Trust, (ii) Caldwell Fiduciary Services Inc., in its capacity as Institutional Co-Trustee of the Trust, and (iii) each of their respective officers, directors, employees, agents, representatives, successors, and assigns.
(m) "Trust" means the Eldon M. Briarwood Irrevocable Family Trust established pursuant to the Trust Agreement, bearing EIN 13-7284915.
(n) "Trust Agreement" means the Eldon M. Briarwood Irrevocable Family Trust Agreement dated June 12, 1998, as amended by the First Amendment dated March 3, 2008, and as further amended by the Second Amendment dated December 31, 2015.
(o) "Trustees" means, collectively, Margot S. Briarwood, in her capacity as Successor Individual Trustee, and Caldwell Fiduciary Services Inc., in its capacity as Institutional Co-Trustee, and "Trustee" means either one of them individually.
ARTICLE II — ACKNOWLEDGMENT OF RECEIPT OF DISTRIBUTIONS
Section 2.1 — Margot S. Briarwood. Margot S. Briarwood hereby acknowledges receipt, in full and without reservation, of the following Distributions from the Trust:
(a) In-Kind Distribution — 14 Waverly Place, Unit 4W. An in-kind distribution of shares in Waverly Place Owners Corp. representing the cooperative apartment located at 14 Waverly Place, Unit 4W, New York, NY 10003, with an appraised fair market value of Eight Million Seven Hundred Fifty Thousand Dollars ($8,750,000) as determined by Pinnacle Valuation Group LLC (Report No. PVG-2024-0441, valuation date March 1, 2024), and a carryover tax basis of One Million Six Hundred Twenty Thousand Dollars ($1,620,000).
(b) In-Kind Distribution — 602 Halsey Street. An in-kind distribution of the real property located at 602 Halsey Street, Brooklyn, NY 11233, designated as Block 1684, Lot 42, Kings County, New York, being a four-unit residential brownstone of approximately 4,800 square feet, with an appraised fair market value of Four Million Two Hundred Thousand Dollars ($4,200,000) as determined by Pinnacle Valuation Group LLC (Report No. PVG-2024-0442, valuation date March 1, 2024), and a carryover tax basis of Nine Hundred Eighty-Five Thousand Dollars ($985,000).
(c) Cash Equalization Payment. A cash equalization payment of Five Million Seven Hundred Twenty-Five Thousand Dollars ($5,725,000), wired on April 22, 2024, representing the difference between Margot's total entitlement of Eighteen Million Six Hundred Seventy-Five Thousand Dollars ($18,675,000) and the total fair market value of her In-Kind Distributions of Twelve Million Nine Hundred Fifty Thousand Dollars ($12,950,000).
(d) Total Distributions. Margot acknowledges that the total Distributions received by her amount to Eighteen Million Six Hundred Seventy-Five Thousand Dollars ($18,675,000), representing her forty-five percent (45%) beneficial interest in the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000), before adjustment for her pro-rata share of Administration Costs.
Section 2.2 — Tobias E. Briarwood. Tobias E. Briarwood hereby acknowledges receipt, in full and without reservation, of the following Distributions from the Trust:
(a) In-Kind Distribution — 27 Fenimore Road. An in-kind distribution of the real property located at 27 Fenimore Road, Larchmont, NY 10538, designated as Section 9, Block 32, Lot 14, Village of Larchmont, Town of Mamaroneck, Westchester County, New York, being a single-family residence of approximately 5,200 square feet on approximately 0.82 acres, with an appraised fair market value of Six Million One Hundred Fifty Thousand Dollars ($6,150,000) as determined by Pinnacle Valuation Group LLC (Report No. PVG-2024-0443, valuation date March 1, 2024), and a carryover tax basis of Two Million Three Hundred Forty Thousand Dollars ($2,340,000).
(b) Cash Equalization Payment. A cash equalization payment of Eight Million Three Hundred Seventy-Five Thousand Dollars ($8,375,000), wired on April 22, 2024, representing the difference between Tobias's total entitlement of Fourteen Million Five Hundred Twenty-Five Thousand Dollars ($14,525,000) and the total fair market value of his In-Kind Distribution of Six Million One Hundred Fifty Thousand Dollars ($6,150,000).
(c) Total Distributions. Tobias acknowledges that the total Distributions received by him amount to Fourteen Million Five Hundred Twenty-Five Thousand Dollars ($14,525,000), representing his thirty-five percent (35%) beneficial interest in the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000), before adjustment for his pro-rata share of Administration Costs.
Section 2.3 — Nadia Briarwood-Chen. Nadia Briarwood-Chen hereby acknowledges receipt, in full and without reservation, of the following Distribution from the Trust:
(a) Cash Equalization Payment. A cash equalization payment of Eight Million Three Hundred Thousand Dollars ($8,300,000), wired on April 22, 2024, representing the entirety of Nadia's total entitlement under the Trust.
(b) No In-Kind Distribution. Nadia acknowledges that she did not receive any in-kind distribution of Trust real property.
(c) Total Distributions. Nadia acknowledges that the total Distribution received by her amounts to Eight Million Three Hundred Thousand Dollars ($8,300,000), representing her twenty percent (20%) beneficial interest in the total Trust corpus of Forty-One Million Five Hundred Thousand Dollars ($41,500,000), before adjustment for her pro-rata share of Administration Costs.
Section 2.4 — Confirmation of Complete Distribution. Each Beneficiary confirms and acknowledges that the aggregate Distributions to all Beneficiaries total Forty-One Million Five Hundred Thousand Dollars ($41,500,000), which amount is equal to the total Trust corpus as of December 31, 2023. Each Beneficiary further confirms that the Distributions are consistent with the beneficial interests set forth in the Trust Agreement and with the terms and conditions of the Distribution Agreement dated April 8, 2024. Each Beneficiary acknowledges that no further distributions are owed by the Trust to any Beneficiary and that the Trust corpus has been fully distributed.
Section 2.5 — Tax Basis Acknowledgment. Each Beneficiary receiving an In-Kind Distribution of Trust real property hereby acknowledges and accepts the carryover tax basis of such property under Section 643(e) of the Code as stated herein, specifically:
(a) 14 Waverly Place, Unit 4W: carryover tax basis of $1,620,000, resulting in unrealized gain of Seven Million One Hundred Thirty Thousand Dollars ($7,130,000) (being the difference between the appraised fair market value of $8,750,000 and the carryover tax basis of $1,620,000);
(b) 602 Halsey Street: carryover tax basis of $985,000, resulting in unrealized gain of Three Million Two Hundred Fifteen Thousand Dollars ($3,215,000) (being the difference between the appraised fair market value of $4,200,000 and the carryover tax basis of $985,000); and
(c) 27 Fenimore Road: carryover tax basis of $2,340,000, resulting in unrealized gain of Three Million Eight Hundred Ten Thousand Dollars ($3,810,000) (being the difference between the appraised fair market value of $6,150,000 and the carryover tax basis of $2,340,000).
The aggregate unrealized gain inherent in the three In-Kind Distributions is Fourteen Million One Hundred Fifty-Five Thousand Dollars ($14,155,000). Each Beneficiary receiving real property understands and acknowledges that such unrealized gain will be recognized by such Beneficiary upon subsequent disposition of the property and that neither the Trust nor the Trustees shall bear any responsibility for any tax liability arising from such subsequent disposition. Each Beneficiary is encouraged to consult with his or her own tax advisors regarding the tax consequences of the In-Kind Distributions and any subsequent disposition.
ARTICLE III — APPROVAL OF FINAL TRUST ACCOUNTING
Section 3.1 — Receipt of Final Accounting. Each Beneficiary hereby acknowledges receipt of the Final Accounting delivered on May 1, 2024, which covers the period from January 1, 2024, through the date of Trust termination. The Final Accounting sets forth all receipts, disbursements, gains, losses, asset valuations, Administration Costs, and Distributions during such period.
Section 3.2 — Approval. Each Beneficiary hereby confirms that he or she has reviewed the Final Accounting in its entirety, including without limitation all receipts, disbursements, realized and unrealized gains and losses, Administration Costs in the aggregate amount of Three Hundred Sixty-Seven Thousand Five Hundred Fifty Dollars ($367,550), and all Distributions, and each Beneficiary approves the Final Accounting as accurate and complete in all material respects. Each Beneficiary acknowledges that the Final Accounting presents a true and fair summary of the administration and disposition of the Trust corpus during the period covered thereby.
Section 3.3 — Independent Review. Tobias E. Briarwood confirms that he has had the opportunity to have the Final Accounting reviewed by his independent counsel, Reedlaw & Stein LLP (Janet C. Okonkwo, Partner), and that he is satisfied with the accuracy and completeness of the Final Accounting. Each Beneficiary independently confirms that he or she has had the opportunity to consult with independent legal and tax advisors of his or her choosing in connection with the review of the Final Accounting, the Distributions, and the execution of this Agreement. No Beneficiary has been denied the opportunity to obtain independent professional advice, and no Beneficiary has been pressured or coerced into approving the Final Accounting or executing this Agreement.
ARTICLE IV — RELEASE
Section 4.1 — General Release by Beneficiaries. Each Beneficiary, for himself or herself and for his or her respective heirs, executors, administrators, legal representatives, successors, and assigns, hereby fully, finally, and forever releases, acquits, and discharges the Released Parties from any and all claims, demands, actions, causes of action, suits, accounts, covenants, contracts, agreements, promises, damages, judgments, obligations, debts, dues, liabilities, costs, and expenses of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, contingent or otherwise, at law or in equity, arising out of or in connection with any of the following:
(a) the creation, establishment, funding, administration, investment, management, or termination of the Trust, from the Trust's inception on June 12, 1998, through the date of Trust termination;
(b) the exercise or non-exercise of any trustee powers, discretions, or authorities under the Trust Agreement, including without limitation any investment decisions, any decisions regarding the timing or manner of distributions, and any decisions regarding the retention or disposition of Trust assets;
(c) the trustee succession from Eldon M. Briarwood to Margot S. Briarwood, including the certification of incapacity by Dr. Annette Volkov and the acceptance of appointment by Margot on January 22, 2024;
(d) the determination of asset values, including without limitation the engagement of Pinnacle Valuation Group LLC and the appraisals delivered by Derek T. Winstead, MAI (Report Nos. PVG-2024-0441, PVG-2024-0442, and PVG-2024-0443);
(e) the in-kind distribution of Trust real property and the computation, allocation, and payment of Cash Equalization Payments;
(f) the allocation, computation, and payment of Administration Costs, including without limitation legal fees, appraisal fees, title-insurance premiums, transfer taxes, tax-return preparation fees, recording fees, and miscellaneous costs;
(g) the preparation, review, and filing of any and all tax returns, including without limitation all Forms 1041, Schedules K-1, and any other federal, state, or local tax filings relating to the Trust;
(h) the custody, safekeeping, and transfer of Trust assets by Caldwell, including all securities, cash, fund interests, and real property held in Trust Account No. CFT-00298174 or otherwise;
(i) the execution and performance of the Distribution Agreement dated April 8, 2024; and
(j) any other matter, act, omission, transaction, or occurrence related to the Trust or the Trust Agreement from the Trust's inception on June 12, 1998, through the date of Trust termination.
Section 4.2 — Release by Trustees. Each Trustee, including Margot S. Briarwood in her capacity as Successor Individual Trustee and Caldwell Fiduciary Services Inc. in its capacity as Institutional Co-Trustee, hereby releases, acquits, and discharges each Beneficiary from any and all claims, demands, actions, causes of action, suits, damages, obligations, liabilities, costs, and expenses of every kind and nature whatsoever arising out of or in connection with the administration of the Trust; provided, however, that this release by the Trustees shall not extend to or affect the refunding obligations of the Beneficiaries set forth in Article V hereof, the indemnification obligations set forth in Article VIII hereof, or any other obligations arising under this Agreement.
Section 4.3 — Scope of Release. The releases set forth in Sections 4.1 and 4.2 are intended to be as broad and comprehensive as permitted under the laws of the State of New York. Each Beneficiary represents and warrants that he or she has not assigned, transferred, conveyed, or otherwise disposed of any claims, demands, causes of action, or rights that are the subject of the releases set forth herein. Notwithstanding the foregoing, the releases set forth in this Article IV shall not extend to obligations expressly arising under this Agreement itself, including without limitation the refunding obligations set forth in Article V, the indemnification obligations set forth in Article VIII, and the representations and warranties set forth in Article VI.
Section 4.4 — Waiver of Unknown Claims. Each Beneficiary expressly acknowledges that the releases set forth in Section 4.1 cover and include claims that he or she may not know about or suspect to exist as of the date of this Agreement. Each Beneficiary expressly waives, to the fullest extent permitted by applicable law, any rights he or she may have under any statute, regulation, common-law principle, or judicial doctrine providing that a general release does not extend to claims that the releasing party does not know or suspect to exist in his or her favor at the time of executing the release, which, if known by him or her, would have materially affected his or her decision to enter into the release. Each Beneficiary acknowledges that he or she may discover facts in addition to or different from those which he or she now knows or believes to be true with respect to the matters released herein, and agrees that the releases set forth in this Article IV shall be and remain effective in all respects notwithstanding such discovery.
ARTICLE V — REFUNDING AGREEMENT
Section 5.1 — Refunding Obligation. Each Beneficiary agrees that if, after the date of Trust termination, any creditor's claim, tax deficiency, tax liability, tax assessment, penalty, interest, fine, or other obligation or liability (each, a "Post-Distribution Liability") is asserted against or imposed upon the Trust, the Trust estate, the Trustees (or either of them), or any Beneficiary in connection with the Trust or its administration, each Beneficiary shall refund to the Trust estate (or, if the Trust has been terminated and no longer has a separate legal existence, contribute among the Beneficiaries) an amount equal to such Beneficiary's proportionate share of such Post-Distribution Liability, determined in accordance with the following percentages:
(a) Margot S. Briarwood: forty-five percent (45%);
(b) Tobias E. Briarwood: thirty-five percent (35%); and
(c) Nadia Briarwood-Chen: twenty percent (20%).
The refunding obligation of each Beneficiary is several and not joint; provided, however, that the right of contribution set forth in Section 5.5 hereof shall apply if any Beneficiary pays more than his or her proportionate share.
Section 5.2 — Nature of Post-Distribution Liabilities. Post-Distribution Liabilities include, without limitation, the following:
(a) any federal, state, or local tax deficiencies, assessments, adjustments, or additional taxes arising from audits or examinations of any Form 1041 or other Trust tax return prepared by Halford & Kline CPAs (Lorraine M. Casella, CPA, engagement partner) or any predecessor accountants, including without limitation any adjustments to the Trust's income, deductions, credits, or distributable net income for any tax year;
(b) any claims by any creditor of the Trust or of Eldon M. Briarwood in his capacity as Grantor, including without limitation any claims arising under contract, tort, or applicable statutory law;
(c) any transfer-tax adjustments, reassessments, or additional liabilities relating to the real-property Distributions, including without limitation any adjustments to the NYC RPTT or NYS Transfer Tax;
(d) any administrative expenses not previously accounted for in the Final Accounting, including without limitation any fees, costs, or expenses arising from the defense or resolution of any Post-Distribution Liability; and
(e) any other liability or obligation of the Trust or the Trustees arising from or relating to the Trust or its administration that was not known or ascertainable as of the date of Trust termination.
Section 5.3 — Notice and Procedure. Upon discovery of or receipt of notice regarding any Post-Distribution Liability, the Party first receiving such notice shall promptly, and in any event within fifteen (15) business days, notify all other Parties in writing in accordance with Section 9.5 hereof, providing reasonable detail regarding the nature, amount, and basis of the Post-Distribution Liability. The Trustees (or former Trustees, as applicable following Trust termination) shall have the right, but not the obligation, to contest, defend, or compromise any Post-Distribution Liability on behalf of the Trust estate or the Beneficiaries, with all costs and expenses of such contest, defense, or compromise to be shared proportionally among the Beneficiaries in accordance with the percentages set forth in Section 5.1. Each Beneficiary shall make refunding payments within thirty (30) days of receipt of written demand therefor accompanied by reasonable documentation of the Post-Distribution Liability, including copies of any tax notices, assessment letters, creditor claims, or other relevant correspondence.
Section 5.4 — Duration. The refunding obligations set forth in this Article V shall survive the termination of the Trust and shall remain in full force and effect until the later of (a) the expiration of all applicable statutes of limitation (including any extensions, waivers, or tolling agreements) with respect to any potential Post-Distribution Liability, or (b) the final resolution (whether by settlement, judgment, or otherwise) of any pending Post-Distribution Liability. Without limiting the generality of the foregoing, the Parties acknowledge that the general federal statute of limitations for income-tax matters is three (3) years from the date of filing under Section 6501(a) of the Code, subject to extension to six (6) years in the case of a substantial omission under Section 6501(e) of the Code, and that the statute of limitations for fraud is unlimited under Section 6501(c) of the Code.
Section 5.5 — Right of Contribution. Any Beneficiary who pays more than his or her proportionate share (as determined in Section 5.1) of any Post-Distribution Liability shall have a right of contribution against the other Beneficiaries for the excess amount so paid. The contributing Beneficiaries shall make such contribution payments within thirty (30) days of receipt of written demand therefor, accompanied by documentation demonstrating the amount paid by the claimant Beneficiary and the proportionate shares owed by each contributing Beneficiary.
ARTICLE VI — REPRESENTATIONS AND WARRANTIES
Section 6.1 — By Each Beneficiary. Each Beneficiary hereby represents and warrants to the other Parties, as of the date of this Agreement, as follows:
(a) Legal Capacity. Such Beneficiary has full legal capacity to execute, deliver, and perform this Agreement.
(b) Review of Final Accounting. Such Beneficiary has received, reviewed, and understands the Final Accounting delivered on May 1, 2024, including all schedules, statements, and supporting documentation accompanying the same.
(c) Opportunity for Independent Counsel. Such Beneficiary has had the opportunity to obtain independent legal and tax counsel of his or her choosing in connection with the review of the Final Accounting, the Distributions, and the negotiation, review, and execution of this Agreement. Such Beneficiary has either obtained such independent counsel or has voluntarily elected not to do so.
(d) No Known Claims. Such Beneficiary is not aware of any claims, disputes, actions, liabilities, or obligations relating to the Trust, the Trust Agreement, or the Distributions that have not been disclosed to the other Parties prior to the execution of this Agreement.
(e) No Assignment. Such Beneficiary has not assigned, transferred, pledged, hypothecated, or otherwise disposed of any interest in the Trust Distributions, or any claims, causes of action, or rights relating to the Trust, the Trust Agreement, the Trustees, or the administration of the Trust.
(f) No Conflict. The execution and delivery of this Agreement, and the performance of such Beneficiary's obligations hereunder, do not and will not violate, conflict with, or result in a breach of any other agreement, instrument, court order, judgment, or decree to which such Beneficiary is a party or by which such Beneficiary is bound.
Section 6.2 — By Margot S. Briarwood (as Successor Trustee). Margot S. Briarwood, in her capacity as Successor Individual Trustee of the Trust, hereby represents and warrants to the other Parties, as of the date of this Agreement, as follows:
(a) Faithful Discharge of Duties. She has faithfully and diligently discharged her duties as Successor Individual Trustee of the Trust from January 22, 2024 (the effective date of her appointment) through the date of Trust termination, in accordance with the Trust Agreement and applicable law.
(b) Proper Distributions. All Distributions have been made in accordance with the Trust Agreement, the Distribution Agreement dated April 8, 2024, and applicable law, including without limitation Article X, Section 10.4 of the Trust Agreement.
(c) Payment of Liabilities. All known administration costs, debts, and liabilities of the Trust have been paid or provided for as of the date of Trust termination, and the Administration Costs set forth in Recital I hereof and in Exhibit B attached hereto represent a true and complete itemization of all such costs.
(d) Accuracy of Final Accounting. The Final Accounting is accurate and complete in all material respects and presents a true and fair summary of the Trust's financial activities during the period covered thereby.
Section 6.3 — By Caldwell Fiduciary Services Inc. Caldwell Fiduciary Services Inc., in its capacity as Institutional Co-Trustee of the Trust, hereby represents and warrants to the other Parties, as of the date of this Agreement, as follows:
(a) Faithful Discharge of Duties. Caldwell has faithfully and diligently discharged its duties as Institutional Co-Trustee of the Trust from June 12, 1998 (the date of its appointment) through the date of Trust termination, in accordance with the Trust Agreement and applicable law.
(b) Proper Accounting. All Trust assets held in Caldwell's custody, including without limitation all marketable securities, cash, money-market funds, and private-fund interests, have been properly accounted for, administered, and distributed or transferred in accordance with the Distribution Agreement dated April 8, 2024, and applicable law.
(c) Zero Balance. Trust Account No. CFT-00298174 reflects a zero balance as of the date hereof, following the completion of all Distributions and the payment of all Administration Costs and Caldwell's annual administrative fee.
(d) Administrative Fee. Caldwell's annual administrative fee, calculated at a rate of 0.12% of corpus (Forty-Nine Thousand Eight Hundred Dollars ($49,800) per year), has been paid in full through the date of Trust termination, and no additional fees are owed to Caldwell in connection with its service as Institutional Co-Trustee.
ARTICLE VII — TRUST TERMINATION
Section 7.1 — Authorization to Terminate. The Beneficiaries hereby authorize and direct the Trustees to terminate the Eldon M. Briarwood Irrevocable Family Trust effective upon the last signature date of this Agreement. The anticipated date of Trust termination is May 20, 2024, or such earlier date as all Parties shall have executed this Agreement. All Distributions having been completed and all known liabilities and Administration Costs having been satisfied, the purposes of the Trust have been fulfilled, and the Trust shall be terminated in accordance with the Trust Agreement and applicable provisions of New York law, including the New York Estates, Powers and Trusts Law.
Section 7.2 — Final Tax Return. Halford & Kline CPAs (Lorraine M. Casella, CPA, engagement partner) has been engaged to prepare and file the final Form 1041 fiduciary income-tax return for the short tax year ending upon the date of Trust termination, together with all required Schedules K-1 to be furnished to the Beneficiaries. The cost of preparation of the final Form 1041, in the amount of Twelve Thousand Eight Hundred Dollars ($12,800), is included in the Administration Costs previously deducted from the Trust corpus as set forth in Recital I hereof and in Exhibit B attached hereto. Each Beneficiary agrees to cooperate fully in the preparation and filing of the final Form 1041 and any related tax filings, including without limitation by providing any information reasonably requested by Halford & Kline CPAs or the Trustees in connection therewith, and by executing and delivering any consents, elections, or other documents that may be required.
Section 7.3 — Discharge of Trustees. Upon the effective date of Trust termination, the Trustees shall be discharged from all further duties, obligations, and liabilities under the Trust Agreement, except as expressly provided in this Agreement, including without limitation the surviving provisions relating to (a) the refunding obligations set forth in Article V, (b) the indemnification obligations set forth in Article VIII, (c) the representations and warranties set forth in Article VI, and (d) any ongoing tax-related obligations, including the obligation to cooperate in the preparation, filing, and defense of any tax returns or audits relating to the Trust.
ARTICLE VIII — INDEMNIFICATION
Section 8.1 — By Beneficiaries in Favor of Trustees. Each Beneficiary agrees to indemnify, defend, and hold harmless the Released Parties from and against any and all losses, damages, costs, expenses (including reasonable attorneys' fees and disbursements), liabilities, claims, demands, actions, causes of action, suits, judgments, settlements, penalties, fines, and interest arising out of or relating to (a) such Beneficiary's breach of any representation, warranty, covenant, or obligation set forth in this Agreement, or (b) any Post-Distribution Liability attributable to such Beneficiary's proportionate share as determined in accordance with Section 5.1 hereof (Margot S. Briarwood: 45%; Tobias E. Briarwood: 35%; Nadia Briarwood-Chen: 20%). The indemnification obligations of the Beneficiaries under this Section 8.1 are several and not joint; each Beneficiary shall be responsible only for his or her proportionate share of any indemnifiable loss, except in the case of a breach attributable solely to one Beneficiary, in which case such Beneficiary shall be solely responsible.
Section 8.2 — Exceptions. Notwithstanding anything to the contrary set forth in Section 8.1, the indemnification obligations of the Beneficiaries shall not extend to any losses, damages, costs, expenses, liabilities, claims, or demands arising from a Trustee's willful misconduct, gross negligence, or fraud. The burden of proving that any loss or liability arises from a Trustee's willful misconduct, gross negligence, or fraud shall rest upon the Beneficiary asserting such defense to indemnification.
ARTICLE IX — MISCELLANEOUS PROVISIONS
Section 9.1 — Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, including without limitation the New York Estates, Powers and Trusts Law (EPTL) and the New York Surrogate's Court Procedure Act (SCPA), without regard to any conflict-of-laws principles that would require the application of the laws of any other jurisdiction. Any action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the courts of the State of New York located in New York County, or in the United States District Court for the Southern District of New York, and each Party hereby consents to the personal jurisdiction of such courts and waives any objection to venue therein.
Section 9.2 — Entire Agreement. This Agreement, together with the Trust Agreement (dated June 12, 1998, as amended by the First Amendment dated March 3, 2008, and the Second Amendment dated December 31, 2015), the Distribution Agreement dated April 8, 2024, and the Certificate of Successor Trustee Appointment dated January 22, 2024, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous agreements, understandings, negotiations, and discussions, whether oral or written, relating to such subject matter. No Party has relied upon any representation or warranty not expressly set forth in this Agreement.
Section 9.3 — Amendment. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument duly executed by all Parties. No oral modification or waiver shall be effective under any circumstances.
Section 9.4 — Severability. If any provision of this Agreement (or any portion thereof) is held by a court of competent jurisdiction to be invalid, illegal, or unenforceable, such holding shall not affect the validity, legality, or enforceability of the remaining provisions of this Agreement, which shall continue in full force and effect. The Parties agree that, in such event, they shall negotiate in good faith to replace the invalid, illegal, or unenforceable provision with a valid, legal, and enforceable provision that most closely reflects the original intent of the Parties.
Section 9.5 — Notices. All notices, demands, requests, consents, approvals, and other communications required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when (a) delivered personally, (b) sent by certified or registered mail, return receipt requested, postage prepaid, (c) sent by nationally recognized overnight courier service, or (d) sent by electronic mail (with confirmation of receipt), in each case addressed to the respective Parties at the following addresses (or at such other address as a Party may designate by written notice to the other Parties):
Margot S. Briarwood: 14 Waverly Place, Unit 4W New York, NY 10003
With a copy to: Calderwood & Harkness LLP 1 Chase Manhattan Plaza, 42nd Floor New York, NY 10005
Attn: Patricia Dunmore, Partner
Tobias E. Briarwood: 88 Round Hill Road Greenwich, CT 06831
With a copy to: Reedlaw & Stein LLP 55 East 59th Street, Suite 1800 New York, NY 10022
Attn: Janet C. Okonkwo, Partner
Nadia Briarwood-Chen: 341 Sterling Place, Apt. 3 Brooklyn, NY 11238
Caldwell Fiduciary Services Inc.: 401 Lexington Avenue, 14th Floor New York, NY 10174
Attn: Howard R. Phelan, Senior Vice President
Section 9.6 — Counterparts. This Agreement may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Delivery of an executed counterpart of this Agreement by electronic transmission (including by portable document format (PDF) or similar electronic imaging technology) shall be as effective as delivery of a manually executed counterpart.
Section 9.7 — Binding Effect. This Agreement shall be binding upon and shall inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns. No Party may assign his, her, or its rights or obligations under this Agreement without the prior written consent of all other Parties.
Section 9.8 — Headings. The article and section headings contained in this Agreement are for convenience of reference only and shall not affect the meaning, interpretation, or construction of this Agreement.
Section 9.9 — No Third-Party Beneficiaries. This Agreement is entered into solely for the benefit of the Parties and their permitted successors and assigns, and nothing contained herein, express or implied, is intended to or shall confer upon any other person or entity any legal or equitable right, benefit, remedy, or claim under or by reason of this Agreement.
Section 9.10 — Waiver. The failure of any Party to enforce any provision of this Agreement at any time shall not constitute a waiver of such provision or of any other provision of this Agreement at any time. No waiver of any provision of this Agreement shall be effective unless in writing and signed by the waiving Party. No single or partial exercise of any right or remedy under this Agreement shall preclude any other or further exercise thereof or the exercise of any other right or remedy.
Section 9.11 — Attorneys' Fees. In any action, suit, or proceeding brought to enforce any provision of this Agreement, or arising out of or relating to any breach of this Agreement, the prevailing Party shall be entitled to recover its reasonable attorneys' fees and costs (including costs of appeal) from the non-prevailing Party, in addition to any other relief to which such prevailing Party may be entitled.
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SIGNATURE PAGES
RECEIPT, RELEASE, AND REFUNDING AGREEMENT
Eldon M. Briarwood Irrevocable Family Trust (EIN: 13-7284915)
Beneficiary Signatures. IN WITNESS WHEREOF, the undersigned Beneficiaries have executed this Agreement as of the date first written above.
MARGOT S. BRIARWOOD (In her individual capacity as Beneficiary)
Signature: ________
Printed Name: Margot S. Briarwood
Date: May 15, 2024
TOBIAS E. BRIARWOOD (In his individual capacity as Beneficiary)
Signature: ________
Printed Name: Tobias E. Briarwood
Date: May 15, 2024
NADIA BRIARWOOD-CHEN (In her individual capacity as Beneficiary)
Signature: ________
Printed Name: Nadia Briarwood-Chen
Date: May 15, 2024
Trustee Signatures. IN WITNESS WHEREOF, the undersigned Trustees have executed this Agreement as of the date first written above.
MARGOT S. BRIARWOOD (In her capacity as Successor Individual Trustee of the Eldon M. Briarwood Irrevocable Family Trust)
Signature: ________