Eldon M. Briarwood Irrevocable Family Trust (EIN: 13-7284915)
Prepared by Calderwood & Harkness LLP 1 Chase Manhattan Plaza, 42nd Floor New York, NY 10005 Matter No. 1026-00005
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PREAMBLE
This CONSENT AND DISTRIBUTION AGREEMENT (this "Agreement") is made and entered into as of by and among:
(1) MARGOT S. BRIARWOOD, an individual residing at 14 Waverly Place, Unit 4W, New York, NY 10003, acting in her capacity as Successor Individual Trustee of the Eldon M. Briarwood Irrevocable Family Trust (in such capacity, the "Successor Trustee");
(2) 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 Eldon M. Briarwood Irrevocable Family Trust (in such capacity, the "Co-Trustee" and, together with the Successor Trustee, the "Trustees");
(3) MARGOT S. BRIARWOOD, acting in her individual capacity as a Beneficiary of the Trust ("Margot");
(4) TOBIAS E. BRIARWOOD, an individual residing at 88 Round Hill Road, Greenwich, CT 06831, a Beneficiary of the Trust ("Tobias"); and
(5) NADIA BRIARWOOD-CHEN, an individual residing at 341 Sterling Place, Apt. 3, Brooklyn, NY 11238, a Beneficiary of the Trust ("Nadia" and, together with Margot and Tobias, the "Beneficiaries").
Each of the foregoing is sometimes referred to herein individually as a "Party" and collectively as the "Parties."
ARTICLE I — RECITALS
The Parties recite and acknowledge the following:
Section 1.1 — The Trust. The Eldon M. Briarwood Irrevocable Family Trust (the "Trust") was established pursuant to that certain Trust Agreement dated June 12, 1998, by and between Eldon M. Briarwood, as Grantor and original individual trustee, and Caldwell Fiduciary Services Inc., as institutional co-trustee, as amended by the First Amendment to Trust Agreement dated March 3, 2008, and the Second Amendment to Trust Agreement 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 federal employer identification number assigned to the Trust is 13-7284915. Eldon M. Briarwood (the "Grantor") established the Trust for the benefit of his descendants and served as the original individual trustee from the Trust's inception on June 12, 1998. Caldwell Fiduciary Services Inc. has served continuously as institutional co-trustee of the Trust since the Trust's inception on June 12, 1998.
Section 1.2 — Grantor Trust Status Termination. The Trust was initially treated as a grantor trust for federal income tax purposes under Section 675(4) of the Internal Revenue Code of 1986, as amended (the "Code" or "IRC"), by reason of the Grantor's retention of a power to reacquire Trust corpus by substituting property of equivalent value (the "swap power"). The Grantor relinquished such swap power effective December 31, 2015, pursuant to the Second Amendment to the Trust Agreement. Accordingly, the Trust's status as a grantor trust under IRC § 675(4) terminated on December 31, 2015, and the Trust has been treated as a non-grantor trust for all federal income tax purposes since January 1, 2016.
Section 1.3 — Incapacity of the Grantor. On December 3, 2023, Dr. Annette Volkov, M.D., the Grantor's attending physician, practicing at her offices in Larchmont, New York, certified the Grantor as permanently incapacitated within the meaning of and under the standard set forth in Article VII, Section 7.2 of the Trust Agreement. As of the date of such certification, the Grantor, age 87, is a resident of 27 Fenimore Road, Larchmont, New York 10538. The incapacity certification was delivered to Caldwell Fiduciary Services Inc. on December 5, 2023, and to each Beneficiary on or about the same date.
Section 1.4 — Trustee Succession. Pursuant to Article VII, Section 7.3 of the Trust Agreement, Margot S. Briarwood is named as the first successor individual trustee to serve in the event that the Grantor ceases to serve as individual trustee by reason of death, resignation, or incapacity. Following receipt of Dr. Volkov's incapacity certification, Margot S. Briarwood was tendered the appointment as Successor Individual Trustee. On January 22, 2024, Margot formally accepted appointment as Successor Trustee, as evidenced by the Certificate of Successor Trustee Appointment dated January 22, 2024, a copy of which is attached hereto as Exhibit D and incorporated herein by reference. Caldwell Fiduciary Services Inc., acting through its Senior Vice President and Trust Officer, Howard R. Phelan, duly acknowledged Margot's appointment by countersignature of the Certificate of Successor Trustee Appointment on January 24, 2024. The succession of Margot as Successor Trustee satisfies all requirements set forth in the Trust Agreement and all applicable requirements under the New York Estates, Powers and Trusts Law ("EPTL"), including without limitation EPTL § 7-2.6.
Section 1.5 — Beneficial Interests. Under the terms of the Trust Agreement, as amended, the Beneficiaries hold the following percentage interests in the Trust corpus:
The foregoing percentage interests represent the vested, distributable shares of the Trust corpus and are not subject to any discretionary modification by the Trustees.
Section 1.6 — Trust Corpus. As of December 31, 2023, the total corpus of the Trust was valued at approximately Forty-One Million Five Hundred Thousand Dollars ($41,500,000), consisting of the following categories of assets:
The real property values stated above reflect the independent fair-market-value appraisals described in Section 1.7 below. The marketable securities, cash and money-market funds, and private-fund interests are valued based on statements and records maintained by Caldwell Fiduciary Services Inc.
Section 1.7 — Independent Appraisals. Pursuant to an engagement letter dated February 14, 2024, Caldwell Fiduciary Services Inc. engaged Pinnacle Valuation Group LLC, 300 Mamaroneck Avenue, Suite 210, White Plains, NY 10605 ("Pinnacle"), to prepare independent fair-market-value appraisals of each of the three real-estate parcels held by the Trust. The lead appraiser assigned by Pinnacle was Derek T. Winstead, MAI, a state-certified general real estate appraiser. Mr. Winstead delivered the following independent fair-market-value appraisals, each as of the effective valuation date of March 1, 2024:
(a) Appraisal Report No. PVG-2024-0441: 14 Waverly Place, Unit 4W, New York, NY 10003 — fair market value of $8,750,000;
(b) Appraisal Report No. PVG-2024-0442: 602 Halsey Street, Brooklyn, NY 11233 — fair market value of $4,200,000; and
(c) Appraisal Report No. PVG-2024-0443: 27 Fenimore Road, Larchmont, NY 10538 — fair market value of $6,150,000.
The total appraised fair market value of the three Parcels is $19,100,000. The appraisals were prepared in accordance with the Uniform Standards of Professional Appraisal Practice ("USPAP") and are attached hereto as Exhibit C and incorporated herein by reference. Pinnacle was engaged at a total fee of Thirty-Four Thousand Five Hundred Dollars ($34,500), which fee shall be borne by the Trust corpus as an administration cost.
Section 1.8 — Authorization for In-Kind Distribution. Article X, Section 10.4 of the Trust Agreement authorizes the Trustees, in their discretion, to make in-kind distributions of real property to any Beneficiary upon a determination that such distribution is consistent with the Trust's purposes and equitable among the Beneficiaries. Article X, Section 10.4 further authorizes the Trustees to make cash equalization payments from Trust liquid assets to balance distributions among the Beneficiaries where in-kind distributions of real property result in an allocation that would otherwise not precisely correspond to each Beneficiary's percentage interest. The Trustees have determined, after due consideration and in the exercise of their fiduciary judgment, that the distributions contemplated by this Agreement are consistent with the Trust's purposes, equitable among the Beneficiaries, and in the best interests of all parties concerned.
Section 1.9 — Purpose of Agreement. The Parties desire to set forth the terms and conditions governing (a) the distribution of the entire Trust corpus, consisting of in-kind distributions of real property and cash equalization payments, (b) the termination of the Trust following the completion of such distributions, and (c) the informed consent and waiver of all Beneficiaries with respect to the foregoing distributions, the Appraised Values, the allocation of Parcels, the computation of Cash Equalization Payments, and the termination of the Trust. This Agreement is intended to memorialize the agreement of all Parties and to satisfy the requirements for Trust termination under the Trust Agreement and applicable law.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
ARTICLE II — DEFINITIONS
As used in this Agreement, the following terms shall have the meanings set forth below. Capitalized terms used but not defined in this Article II shall have the meanings ascribed to them elsewhere in this Agreement.
"Agreement" means this Consent and Distribution Agreement, including all exhibits and schedules attached hereto, as the same may be amended, modified, or supplemented from time to time in accordance with its terms.
"Appraised Value" means the fair market value of each Parcel as determined by Pinnacle Valuation Group LLC pursuant to the Pinnacle Appraisals, each dated as of the effective valuation date of March 1, 2024.
"Beneficiaries" means Margot, Tobias, and Nadia, collectively, and "Beneficiary" means any one of them individually.
"Cash Equalization Payment" means the amount payable in cash and/or Liquid Assets to each Beneficiary as set forth in Section 3.2 of this Agreement, calculated as the difference between such Beneficiary's Pro-Rata Entitlement and the aggregate Appraised Value of any Parcels distributed to such Beneficiary in kind.
"Co-Trustee" means Caldwell Fiduciary Services Inc., a New York–chartered trust company, acting in its capacity as institutional co-trustee of the Trust.
"Code" or "IRC" means the Internal Revenue Code of 1986, as amended, and any successor statute, and the Treasury Regulations promulgated thereunder.
"Distribution Schedule" means the schedule of distributions attached hereto as Exhibit A and incorporated herein by reference.
"EPTL" means the New York Estates, Powers and Trusts Law, as amended from time to time.
"Grantor" means Eldon M. Briarwood, an individual residing at 27 Fenimore Road, Larchmont, NY 10538.
"Liquid Assets" means the following assets held by the Trust as of the date hereof: (a) marketable securities held in custody at Caldwell, valued at approximately $18,340,000; (b) cash and money-market funds, valued at approximately $2,210,000; and (c) private-fund interests in Ashgrove Capital Partners Fund III LP, valued at approximately $1,850,000, for a total aggregate value of approximately $22,400,000.
"Parcels" means the three real-estate properties held by the Trust, specifically: (a) 14 Waverly Place, Unit 4W, New York, NY 10003; (b) 602 Halsey Street, Brooklyn, NY 11233; and (c) 27 Fenimore Road, Larchmont, NY 10538, and "Parcel" means any one of them individually.
"Pinnacle" means Pinnacle Valuation Group LLC, 300 Mamaroneck Avenue, Suite 210, White Plains, NY 10605.
"Pinnacle Appraisals" means the three independent fair-market-value appraisal reports prepared by Pinnacle, identified as Appraisal Report No. PVG-2024-0441 (14 Waverly Place), Appraisal Report No. PVG-2024-0442 (602 Halsey Street), and Appraisal Report No. PVG-2024-0443 (27 Fenimore Road), each as of the effective valuation date of March 1, 2024.
"Pro-Rata Entitlement" means each Beneficiary's percentage interest in the Trust corpus (as set forth in Section 1.5) multiplied by the total Trust corpus of $41,500,000, resulting in the following entitlements: Margot — $18,675,000; Tobias — $14,525,000; and Nadia — $8,300,000.
"Successor Trustee" means Margot S. Briarwood, acting in her fiduciary capacity as Successor Individual Trustee of the Trust.
"Trust" means the Eldon M. Briarwood Irrevocable Family Trust, established pursuant to the Trust Agreement.
"Trust Account" means the fiduciary account maintained by Caldwell Fiduciary Services Inc. under Account No. CFT-00298174, in which the Liquid Assets of the Trust are held.
"Trust Agreement" means the Trust Agreement dated June 12, 1998, by and between Eldon M. Briarwood and Caldwell Fiduciary Services Inc., as amended by the First Amendment to Trust Agreement dated March 3, 2008, and the Second Amendment to Trust Agreement dated December 31, 2015.
"Trustees" means the Successor Trustee and the Co-Trustee, collectively, and "Trustee" means either one of them individually.
ARTICLE III — DISTRIBUTIONS
Section 3.1 — In-Kind Real Property Distributions. The Trustees shall distribute the Parcels to the following Beneficiaries at the stated Appraised Values, in accordance with the Distribution Schedule attached as Exhibit A:
(a) To Margot S. Briarwood:
(i) 14 Waverly Place, Unit 4W, New York, NY 10003 — a cooperative apartment consisting of approximately 2,400 square feet of living space, represented by shares allocated to said apartment in Waverly Place Owners Corp., together with the proprietary lease appurtenant thereto.
• Appraised Value: $8,750,000
• Tax Basis (carryover): $1,620,000
• Unrealized Gain: $7,130,000
(ii) 602 Halsey Street, Brooklyn, NY 11233 — a four-unit residential brownstone building consisting of approximately 4,800 square feet, located on the premises identified as Block 1684, Lot 42 on the Tax Map of Kings County, New York.
• Appraised Value: $4,200,000
• Tax Basis (carryover): $985,000
• Unrealized Gain: $3,215,000
Total real property distributed to Margot: $12,950,000.
(b) To Tobias E. Briarwood:
(i) 27 Fenimore Road, Larchmont, NY 10538 — a single-family residence consisting of approximately 5,200 square feet of living space situated on approximately 0.82 acres of land, located on the premises identified as Section 9, Block 32, Lot 14, in the Village of Larchmont, Town of Mamaroneck, Westchester County, New York.
• Appraised Value: $6,150,000
• Tax Basis (carryover): $2,340,000
• Unrealized Gain: $3,810,000
Total real property distributed to Tobias: $6,150,000.
(c) To Nadia Briarwood-Chen: No real property shall be distributed to Nadia. Nadia's entire Pro-Rata Entitlement shall be satisfied through Cash Equalization Payments as set forth in Section 3.2 below.
Section 3.2 — Cash Equalization Payments. To equalize the distributions among the Beneficiaries in accordance with their respective Pro-Rata Entitlements, and to ensure that each Beneficiary receives aggregate distributions equal to his or her Pro-Rata Entitlement, the Trustees shall distribute cash and/or Liquid Assets to the Beneficiaries as follows:
(a) To Margot: Pro-Rata Entitlement of $18,675,000 minus $12,950,000 of real property distributed in kind equals a Cash Equalization Payment of $5,725,000.
(b) To Tobias: Pro-Rata Entitlement of $14,525,000 minus $6,150,000 of real property distributed in kind equals a Cash Equalization Payment of $8,375,000.
(c) To Nadia: Pro-Rata Entitlement of $8,300,000 minus $0 of real property distributed in kind equals a Cash Equalization Payment of $8,300,000.
Total Cash Equalization Payments: $22,400,000.
The Cash Equalization Payments shall be funded from the Liquid Assets of the Trust held in Trust Account No. CFT-00298174 at Caldwell Fiduciary Services Inc. The source of such funds is described in greater detail in Article V of this Agreement.
Section 3.3 — Verification of Total Distributions. The aggregate distributions under Sections 3.1 and 3.2 total $41,500,000, which is equal to the total Trust corpus as set forth in Section 1.6, verified as follows:
Each Beneficiary's total distribution corresponds precisely to his or her Pro-Rata Entitlement, subject only to the proportional reduction for Administration Costs described in Section 3.4 below.
Section 3.4 — Administration Costs. The Parties acknowledge that the following administration costs (the "Administration Costs") shall be borne by the Trust corpus and deducted from the Liquid Asset pool prior to or concurrently with the Cash Equalization Payments, thereby proportionally reducing the Cash Equalization Payments payable to each Beneficiary:
The real-property transfer taxes of $84,450 are comprised of the following:
(i) NYC Real Property Transfer Tax ("NYC RPTT") on 602 Halsey Street, Brooklyn, NY 11233, at the rate of 1.425% of the Appraised Value of $4,200,000: $59,850;
(ii) New York State real estate transfer tax on 27 Fenimore Road, Larchmont, NY 10538, at the rate of $2.00 per $500 of consideration (Appraised Value of $6,150,000): $24,600; and
(iii) 14 Waverly Place, Unit 4W, New York, NY 10003: exempt from NYC RPTT as a cooperative share transfer not constituting a transfer of real property for purposes of the NYC RPTT.
The Cash Equalization Payments set forth in Section 3.2 are stated before the deduction of Administration Costs. The actual amounts distributed to each Beneficiary shall be reduced proportionally based on each Beneficiary's Pro-Rata Entitlement share (i.e., 45% to Margot, 35% to Tobias, and 20% to Nadia) of the total Administration Costs of $367,550. A detailed Administration Cost Schedule is attached hereto as Exhibit E.
Section 3.5 — Tax Basis of Distributed Property. Each Beneficiary receiving real property in kind pursuant to Section 3.1 hereby acknowledges and agrees that, pursuant to IRC § 643(e), property distributed from a non-grantor trust to a beneficiary carries over the trust's adjusted tax basis (i.e., the carryover basis rule applies, and the Trustees have not elected under IRC § 643(e)(3) to recognize gain upon distribution). Accordingly, the tax basis of each Parcel in the hands of the receiving Beneficiary shall be as follows:
(a) 14 Waverly Place, Unit 4W — carryover basis of $1,620,000;
(b) 602 Halsey Street — carryover basis of $985,000; and
(c) 27 Fenimore Road — carryover basis of $2,340,000.
The total carryover basis for all three Parcels is $4,945,000, and the total unrealized gain inherent in such Parcels is $14,155,000. Each receiving Beneficiary acknowledges that he or she will be responsible for any capital gains taxes arising from a subsequent sale or other disposition of the Parcel(s) received, computed with reference to the carryover basis stated above. The Trustees make no representation regarding the tax consequences of such distributions, and each Beneficiary is advised to consult with his or her own tax advisor.
ARTICLE IV — DEED DELIVERY AND REAL PROPERTY TRANSFER MECHANICS
Section 4.1 — Deed Execution and Recording. The Trustees shall execute and deliver the following instruments to effect the real property transfers contemplated by Section 3.1:
(a) 14 Waverly Place, Unit 4W, New York, NY 10003. The Trustees shall execute and deliver an Assignment of Cooperative Shares and Proprietary Lease, assigning all of the Trust's right, title, and interest in the cooperative shares allocated to Unit 4W in Waverly Place Owners Corp. and the proprietary lease appurtenant thereto from the Trust to Margot S. Briarwood. Such assignment shall be subject to any required approvals of the cooperative corporation's board of directors, and Margot agrees to cooperate in submitting any application package or documentation required by Waverly Place Owners Corp. to obtain such board approval. The Trustees shall use commercially reasonable efforts to facilitate the board approval process.
(b) 602 Halsey Street, Brooklyn, NY 11233. The Trustees shall execute and deliver a bargain-and-sale deed with covenants against grantor's acts, in recordable form, conveying all of the Trust's right, title, and interest in the premises identified as Block 1684, Lot 42 on the Tax Map of Kings County, New York, to Margot S. Briarwood. Such deed shall be recorded with the Office of the Kings County Clerk, together with all necessary accompanying documents, including the Real Property Transfer Report (Form RP-5217), the New York City Real Property Transfer Tax Return (Form NYC-RPT), and the New York State combined real estate transfer tax return (Form TP-584).
(c) 27 Fenimore Road, Larchmont, NY 10538. The Trustees shall execute and deliver a bargain-and-sale deed with covenants against grantor's acts, in recordable form, conveying all of the Trust's right, title, and interest in the premises identified as Section 9, Block 32, Lot 14, in the Village of Larchmont, Town of Mamaroneck, Westchester County, New York, to Tobias E. Briarwood. Such deed shall be recorded with the Office of the Westchester County Clerk, together with all necessary accompanying documents, including the Real Property Transfer Report (Form RP-5217) and the New York State combined real estate transfer tax return (Form TP-584).
The target date for recording of the deeds described in clauses (b) and (c) above, and for delivery of the cooperative share assignment described in clause (a) above, is or as soon thereafter as reasonably practicable. Legal descriptions of each Parcel are set forth in Exhibit B attached hereto.
Section 4.2 — Title Insurance. Trident National Title Corp., 570 Seventh Avenue, 20th Floor, New York, NY 10018 (contact: Mitchell Fong, Vice President, Commercial Underwriting) ("Trident"), has been engaged to issue owner's title insurance policies in connection with the real property transfers contemplated hereby. Trident shall issue owner's title insurance policies as follows:
(a) In favor of Margot S. Briarwood, with respect to 14 Waverly Place, Unit 4W (to the extent applicable for cooperative share transfers) and 602 Halsey Street, Brooklyn, NY 11233; and
(b) In favor of Tobias E. Briarwood, with respect to 27 Fenimore Road, Larchmont, NY 10538.
Title insurance premiums totaling Forty-Seven Thousand Two Hundred Dollars ($47,200) for three policies shall be paid from the Trust corpus as an Administration Cost in accordance with Section 3.4. Each title insurance policy shall be in an amount equal to the Appraised Value of the corresponding Parcel, or such other amount as may be agreed upon by the applicable Beneficiary and Trident.
Section 4.3 — Transfer Tax Responsibility. All applicable real-property transfer taxes, as detailed in Section 3.4, shall be the obligation of and paid by the Trust from the Liquid Assets prior to or concurrently with the distributions contemplated hereby. The Trust shall be treated as the "grantor" for purposes of all applicable transfer tax returns and filings. The Parties acknowledge that the transfer of cooperative shares in Waverly Place Owners Corp. with respect to 14 Waverly Place, Unit 4W is exempt from the New York City Real Property Transfer Tax, as the transfer of cooperative shares does not constitute a transfer of an interest in real property for purposes of such tax under the applicable exemption.
Section 4.4 — Condition of Property. Each Parcel is distributed to the receiving Beneficiary "AS IS, WHERE IS," and "WITH ALL FAULTS," without any warranty or representation by the Trustees, whether express or implied, as to the physical condition, environmental condition, structural integrity, mechanical systems, habitability, or compliance with applicable zoning, building, fire, health, or other codes, laws, regulations, or ordinances, except as otherwise specifically set forth herein. Each receiving Beneficiary acknowledges that he or she has had the opportunity to inspect the Parcel(s) to be received and accepts such Parcel(s) in their present condition. The Trustees expressly disclaim any warranties of merchantability, fitness for a particular purpose, or any other warranties, whether arising by operation of law or otherwise.
ARTICLE V — CASH EQUALIZATION PAYMENT MECHANICS
Section 5.1 — Source of Funds. The Cash Equalization Payments described in Section 3.2 shall be funded from the Trust Account maintained at Caldwell Fiduciary Services Inc. (Account No. CFT-00298174). The Liquid Assets available for Cash Equalization Payments total approximately Twenty-Two Million Four Hundred Thousand Dollars ($22,400,000), consisting of the following:
The Co-Trustee shall administer the funding of the Cash Equalization Payments in accordance with its standard fiduciary procedures and applicable law.
Section 5.2 — Wire Transfer. Cash Equalization Payments shall be made by wire transfer of immediately available funds to accounts designated by each Beneficiary in writing. Each Beneficiary shall provide wire transfer instructions to the Co-Trustee no later than business days prior to the The Co-Trustee shall not be responsible for any delays or errors arising from incorrect or incomplete wire transfer instructions provided by a Beneficiary.
Notwithstanding the foregoing, Margot's Cash Equalization Payment of $5,725,000 may, at her sole election, be satisfied in whole or in part by transfer of marketable securities in kind from the Trust Account to a brokerage or custodial account designated by Margot in writing. To the extent Margot elects to receive marketable securities in kind, the value of such securities for purposes of this Agreement shall be determined as of the close of business on the business day immediately preceding the date of transfer, using closing market prices for publicly traded securities.
Section 5.3 — Liquidation of Non-Cash Assets. To the extent that the Liquid Assets include non-cash items, including marketable securities and the Trust's private-fund interests in Ashgrove Capital Partners Fund III LP, the Co-Trustee is hereby authorized and directed to liquidate such assets as necessary to fund the Cash Equalization Payments and Administration Costs in cash. Such liquidation shall be conducted in a commercially reasonable manner, with due regard for market conditions, transaction costs, and the best interests of the Beneficiaries.
Alternatively, the Co-Trustee may distribute non-cash Liquid Assets (including marketable securities and private-fund interests) in kind to any Beneficiary, provided that the affected Beneficiary consents in writing to such in-kind distribution. Any in-kind distribution of Liquid Assets shall be valued as of the close of business on the business day immediately preceding the date of transfer. In the case of private-fund interests in Ashgrove Capital Partners Fund III LP, such distribution shall be subject to the terms and conditions of the limited partnership agreement governing such fund, including any applicable transfer restrictions, notice requirements, or consent requirements of the general partner.
ARTICLE VI — CONSENT OF BENEFICIARIES
Section 6.1 — Informed Consent. Each Beneficiary, having been advised of his or her right to seek and obtain independent legal counsel at his or her own expense, and having had a full and fair opportunity to review the Pinnacle Appraisals, the Trust Agreement, and the terms and conditions of this Agreement, hereby freely and voluntarily consents to the distributions set forth in Article III of this Agreement, including without limitation: (a) the in-kind distribution of real property to the Beneficiaries identified in Section 3.1; (b) the Cash Equalization Payments set forth in Section 3.2; (c) the deduction of Administration Costs set forth in Section 3.4; and (d) the termination of the Trust as provided in Article VIII.
Each Beneficiary acknowledges that he or she has been given adequate time to review this Agreement and the Pinnacle Appraisals, and that he or she has had the opportunity to ask questions of the Trustees, their counsel, and any independent advisors retained by such Beneficiary. Tobias E. Briarwood acknowledges that he has been represented by independent counsel, Janet C. Okonkwo of Reedlaw & Stein LLP, 55 East 59th Street, Suite 1800, New York, NY 10022, in connection with his review of this Agreement and the proposed distributions, and that such representation has been at Tobias's own expense.
Section 6.2 — Waiver of Objection. Each Beneficiary hereby irrevocably waives any and all objections, claims, or challenges to:
(a) The methodology used by Pinnacle Valuation Group LLC and Derek T. Winstead, MAI, to determine the Appraised Value of each Parcel, including the selection of comparable sales, the income capitalization approach, the cost approach, or any other valuation methodology employed;
(b) The allocation of Parcels among the Beneficiaries as set forth in Section 3.1, including the determination that certain Parcels are distributed to one Beneficiary rather than another;
(c) The computation of the Cash Equalization Payments as set forth in Section 3.2, including the mathematical methodology and the rounding or treatment of any fractional amounts;
(d) The appointment of Margot S. Briarwood as Successor Trustee pursuant to Article VII, Section 7.3 of the Trust Agreement, the Certificate of Successor Trustee Appointment dated January 22, 2024, and the incapacity certification of Dr. Annette Volkov dated December 3, 2023; and
(e) Any actual or potential conflict of interest arising from Margot S. Briarwood's dual role as (i) Successor Trustee of the Trust and (ii) a Beneficiary of the Trust who is receiving distributions hereunder, it being acknowledged that such dual role was contemplated by the Trust Agreement and that the independent engagement of Pinnacle by Caldwell (and not by Margot), along with the informed consent of all Beneficiaries, provides adequate safeguards against any prejudice to the other Beneficiaries.
Section 6.3 — Acknowledgment of Independent Appraisal. Each Beneficiary independently acknowledges that the Appraised Values used in this Agreement are based on independent fair-market-value appraisals conducted by Pinnacle Valuation Group LLC, a qualified, independent third-party appraiser engaged by Caldwell Fiduciary Services Inc. (and not by any Beneficiary or by the Successor Trustee), and that such appraisals were prepared by Derek T. Winstead, MAI, in accordance with the Uniform Standards of Professional Appraisal Practice ("USPAP"). Each Beneficiary further acknowledges that the Pinnacle Appraisals represent the unbiased, professional opinion of value of each Parcel and that no Beneficiary exercised or attempted to exercise any influence over the appraisal process or the valuation conclusions.
ARTICLE VII — REPRESENTATIONS AND WARRANTIES
Section 7.1 — Representations of the Successor Trustee. Margot S. Briarwood, in her capacity as Successor Trustee, hereby represents and warrants to the Co-Trustee and each Beneficiary as follows:
(a) She has been duly appointed Successor Individual Trustee of the Trust pursuant to Article VII, Section 7.3 of the Trust Agreement, and her appointment has been duly evidenced by the Certificate of Successor Trustee Appointment dated January 22, 2024, which has been acknowledged by the Co-Trustee.
(b) The distributions contemplated herein are authorized by Article X, Section 10.4 of the Trust Agreement, and the Trustees have exercised their discretion in determining that such distributions are consistent with the Trust's purposes and equitable among the Beneficiaries.
(c) The Trust Agreement has not been further amended, modified, revoked, or supplemented since the Second Amendment to Trust Agreement dated December 31, 2015, and the Trust Agreement as described herein is in full force and effect.
(d) She has full power and authority to execute deeds, assignments of cooperative shares, and other instruments of transfer on behalf of the Trust, and such authority is conferred upon her by the Trust Agreement and applicable provisions of the EPTL.
(e) To her knowledge, after due inquiry, there are no pending or threatened claims, actions, suits, proceedings, arbitrations, investigations, or governmental inquiries against the Trust or any Trust property, and no basis for any such claim, action, or proceeding exists.
(f) The description of the Trust corpus set forth in Section 1.6 is complete and accurate in all material respects as of December 31, 2023, and no material adverse change in the composition or value of the Trust corpus has occurred since such date, other than ordinary market fluctuations in the value of marketable securities and the accrual of administration expenses in the ordinary course.
Section 7.2 — Representations of the Co-Trustee. Caldwell Fiduciary Services Inc., acting through its duly authorized officer, Howard R. Phelan, Senior Vice President and Trust Officer, hereby represents and warrants to the Successor Trustee and each Beneficiary as follows:
(a) It is duly organized and validly existing as a trust company under the laws of the State of New York, chartered by the New York State Department of Financial Services, and has all requisite power and authority to act as institutional co-trustee of the Trust and to perform its obligations under this Agreement.
(b) The Trust Account (Account No. CFT-00298174) holds the Liquid Assets described herein, and such assets are free and clear of all liens, encumbrances, pledges, security interests, and claims, other than ordinary brokerage or custodial liens.
(c) It has reviewed and consents to the distributions contemplated by Article III and the termination of the Trust as contemplated by Article VIII, and has determined that such distributions and termination are consistent with its fiduciary obligations as Co-Trustee.
(d) The annual administrative fee charged by Caldwell, at the rate of 0.12% of Trust corpus (approximately $49,800 per year, based on the Trust corpus of $41,500,000), has been prorated and fully accounted for through the anticipated date of Trust termination, and no additional administrative fees will be owed by the Trust to Caldwell following such termination, other than any customary wind-down charges that may be disclosed separately.
Section 7.3 — Representations of the Beneficiaries. Each Beneficiary, severally and not jointly, hereby represents and warrants to the Trustees and each other Beneficiary as follows:
(a) He or she is of legal age (at least eighteen years of age), is a citizen or lawful permanent resident of the United States, and is legally competent to execute this Agreement and to perform his or her obligations hereunder.
(b) He or she has had a full and fair opportunity to review the Pinnacle Appraisals, the Trust Agreement (including all amendments thereto), and this Agreement, including all exhibits and schedules hereto, and has read and understands the terms and conditions set forth herein.
(c) He or she has had the opportunity to seek and obtain independent legal counsel of his or her own choosing and at his or her own expense in connection with the review and execution of this Agreement, and has either obtained such counsel or has voluntarily elected not to do so.
(d) His or her execution of this Agreement is voluntary and not the product of duress, fraud, undue influence, mistake, or any other circumstance that would render his or her consent voidable or invalid.
(e) He or she has no knowledge of any claim, demand, cause of action, or proceeding against the Trust or any of its assets that has not been previously disclosed to the Trustees in writing.
Section 7.4 — Additional Representations by Tobias. In addition to the representations and warranties set forth in Section 7.3, Tobias E. Briarwood additionally represents and warrants as follows:
(a) He has been represented by independent counsel, Janet C. Okonkwo of Reedlaw & Stein LLP, 55 East 59th Street, Suite 1800, New York, NY 10022, in connection with his review of this Agreement and the Pinnacle Appraisals, and that such counsel has advised him as to his rights and obligations hereunder.
(b) He is satisfied that the Pinnacle Appraisals reflect the fair market value of each Parcel and that such appraisals were prepared independently of the Trustees and
(c) He has had all of his concerns regarding the distribution methodology, the allocation of Parcels, the computation of Cash Equalization Payments, and the valuations reflected in the Pinnacle Appraisals fully addressed to his satisfaction by the Trustees and/or his independent counsel.
ARTICLE VIII — TRUST TERMINATION
Section 8.1 — Final Trust Accounting. Following the completion of all distributions contemplated by Article III and Article V, and the payment of all Administration Costs, the Trustees shall prepare and deliver to each Beneficiary a final trust accounting (the "Final Accounting") reflecting all receipts, disbursements, gains, losses, distributions, and Administration Costs of the Trust from the beginning of the current accounting period through the date of Trust termination. The targeted delivery date for the Final Accounting is on or about May 1, 2024. The Final Accounting shall be prepared in accordance with the requirements of the Trust Agreement and the EPTL, including without limitation EPTL § 11-1.7.
Section 8.2 — Final Fiduciary Income Tax Return. Halford & Kline CPAs (engagement partner: Lorraine M. Casella, CPA), 125 Broad Street, 8th Floor, New York, NY 10004, has been engaged by the Trustees to prepare the final federal fiduciary income-tax return (IRS Form 1041) for the Trust for the short tax year beginning January 1, 2024, and ending on the date of Trust termination. Halford & Kline shall also prepare the corresponding New York State fiduciary income-tax return (Form IT-205) for the same short tax year. The fee for such preparation, estimated at $12,800, shall be borne by the Trust corpus as an Administration Cost in accordance with Section 3.4. Schedule K-1 forms reflecting each Beneficiary's allocable share of Trust income, deductions, and credits for the final short tax year shall be delivered to each Beneficiary as promptly as practicable following the filing of such returns.
Section 8.3 — Termination. Upon the satisfaction of each of the following conditions, the Trust shall terminate in accordance with its terms and the applicable provisions of the EPTL:
(a) The completion of all distributions of Trust corpus to the Beneficiaries under Article III, including the recording of all deeds, the delivery of cooperative share assignments, and the wire transfer of all Cash Equalization Payments;
(b) The delivery of the Final Accounting to each Beneficiary as provided in Section 8.1; and
(c) The execution by all Beneficiaries of Receipt, Release, and Refunding Agreements as provided in Section 8.4.
The target termination date of the Trust is May 20, 2024. Upon termination, the Trust shall be of no further force or effect, and the Trustees shall be discharged from all further duties and obligations arising under the Trust Agreement, except as otherwise provided herein or required by applicable law.
Section 8.4 — Receipt and Release. As a condition to Trust termination, each Beneficiary shall execute and deliver to the Trustees a Receipt, Release, and Refunding Agreement (each, a "Receipt and Release") in a form reasonably satisfactory to the Trustees and their counsel. Each Receipt and Release shall contain: (a) an acknowledgment by the executing Beneficiary of receipt of all distributions to which such Beneficiary is entitled under this Agreement; (b) a release of the Successor Trustee and the Co-Trustee from all claims, demands, causes of action, and liabilities arising from or related to the administration of the Trust, except for claims arising from willful misconduct or fraud; and (c) a refunding obligation consistent with Section 9.1 of this Agreement. The target date for execution of all Receipts and Releases is May 15, 2024.
ARTICLE IX — INDEMNIFICATION AND REFUNDING
Section 9.1 — Refunding Obligation. Each Beneficiary agrees, severally and not jointly, to refund to the Trust estate (or, if the Trust has been terminated, to the other Beneficiaries pro rata in proportion to their respective Pro-Rata Entitlements) such portion of his or her distribution as may be necessary to satisfy any creditor's claim, tax liability, assessment, penalty, interest, or other obligation of the Trust that was not known to the Trustees or accounted for as of the date of distribution and that is determined to be a valid obligation of the Trust. Such refunding obligation shall be limited to the lesser of (a) the amount of such claim or obligation allocable to the refunding Beneficiary's Pro-Rata Entitlement and (b) the aggregate value of the distribution received by such Beneficiary under this Agreement. Each Beneficiary's refunding obligation shall survive the termination of the Trust.
Section 9.2 — Indemnification of Trustees. Each Beneficiary, severally and not jointly, shall indemnify, defend, and hold harmless the Successor Trustee (in her fiduciary capacity) and the Co-Trustee, and their respective officers, directors, employees, agents, successors, and assigns, from and against any and all claims, demands, causes of action, judgments, losses, damages, costs, and expenses (including reasonable attorneys' fees and disbursements) arising from or related to the distribution of Trust property to such Beneficiary pursuant to this Agreement, to the extent of the value of the distribution received by such Beneficiary. This indemnification obligation shall not apply to claims arising from the willful misconduct, bad faith, or fraud of the indemnified Trustee. Each Beneficiary's indemnification obligation shall survive the termination of the Trust.
ARTICLE X — MISCELLANEOUS PROVISIONS
Section 10.1 — Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of New York, including the New York Estates, Powers and Trusts Law, without regard to the conflicts-of-law principles thereof. The Parties consent to the exclusive jurisdiction of the courts of the State of New York sitting in New York County, and the United States District Court for the Southern District of New York, for the resolution of any dispute arising out of or relating to this Agreement.
Section 10.2 — Entire Agreement. This Agreement, together with the Trust Agreement, the Pinnacle Appraisals, and the exhibits and schedules attached hereto, constitutes the entire agreement among the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous negotiations, discussions, representations, warranties, understandings, and agreements, whether written or oral, relating to the matters addressed herein. No Party has relied upon any representation or warranty not expressly set forth in this Agreement.
Section 10.3 — Amendments. This Agreement may not be amended, modified, supplemented, or waived except by a written instrument signed by all Parties hereto. No oral agreement, course of dealing, or trade usage shall be deemed to amend or modify this Agreement.
Section 10.4 — Severability. If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court of competent jurisdiction, such invalidity, illegality, or unenforceability shall not affect any other provision of this Agreement, and the remaining provisions shall continue in full force and effect. The Parties agree that any such invalid, illegal, or unenforceable provision shall be modified to the minimum extent necessary to make it valid, legal, and enforceable while preserving the original intent of the Parties.
Section 10.5 — Counterparts. This Agreement may be executed in any number of 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 PDF, DocuSign, or other electronic signature platform) or by facsimile transmission shall be as effective as delivery of a manually executed original counterpart. Electronic and facsimile signatures shall be deemed originals for all purposes.
Section 10.6 — Notices. All notices, requests, demands, consents, and other communications required or permitted 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, addressed as follows:
If to the Successor Trustee / Margot S. Briarwood (in her fiduciary capacity):
c/o Briarwood Family Office LLC 780 Park Avenue, Suite 22A New York, NY 10021
with a copy (which shall not constitute notice) to:
Calderwood & Harkness LLP 1 Chase Manhattan Plaza, 42nd Floor New York, NY 10005
Attn: Patricia Dunmore, Esq.
If to Caldwell Fiduciary Services Inc.:
Caldwell Fiduciary Services Inc. 401 Lexington Avenue, 14th Floor New York, NY 10174
Attn: Howard R. Phelan, Senior Vice President and Trust Officer
If to Tobias E. Briarwood:
88 Round Hill Road Greenwich, CT 06831
with a copy (which shall not constitute notice) to:
Reedlaw & Stein LLP 55 East 59th Street, Suite 1800 New York, NY 10022
Attn: Janet C. Okonkwo, Esq.
If to Nadia Briarwood-Chen:
341 Sterling Place, Apt. 3 Brooklyn, NY 11238
Any Party may change its notice address by providing written notice to all other Parties in accordance with this Section.
Section 10.7 — Binding Effect. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, executors, administrators, personal representatives, successors, and assigns.
Section 10.8 — No Third-Party Beneficiaries. Except as expressly provided herein, nothing in this Agreement is intended to confer, and nothing herein shall be construed to confer, any rights, benefits, or remedies upon any person or entity other than the Parties hereto. The Grantor, while not a signatory to this Agreement, is acknowledged as the settlor of the Trust; however, this Agreement does not create any rights in favor of the Grantor.
Section 10.9 — Waiver. No waiver of any provision of this Agreement shall be effective unless set forth in writing and signed by the waiving Party. No waiver of any provision shall constitute a continuing waiver of the same provision or a waiver of any other provision. The failure of any Party to enforce any provision of this Agreement at any time shall not be construed as a waiver of such provision or the right to enforce such provision at a later time.
Section 10.10 — Headings. The article and section headings contained in this Agreement are inserted for convenience of reference only and shall not affect the meaning, interpretation, or construction of any provision of this Agreement.
Section 10.11 — Counsel. The Parties acknowledge and agree that this Agreement was prepared by Calderwood & Harkness LLP as counsel to Briarwood Family Office LLC and the Successor Trustee, and that Calderwood & Harkness LLP does not represent and has not represented any Beneficiary individually in connection with this Agreement or the transactions contemplated hereby. Each Beneficiary has been advised to retain and consult with independent legal counsel of his or her own choosing at his or her own expense. No Beneficiary shall assert any claim against Calderwood & Harkness LLP arising from the preparation of this Agreement or the advice rendered in connection therewith, it being understood that Calderwood & Harkness LLP's duties of loyalty and confidentiality run solely to Briarwood Family Office LLC and the Successor Trustee, and not to any individual Beneficiary.
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SIGNATURE PAGES
CONSENT AND DISTRIBUTION AGREEMENT
Eldon M. Briarwood Irrevocable Family Trust
SUCCESSOR TRUSTEE:
MARGOT S. BRIARWOOD, as Successor Individual Trustee of the Eldon M. Briarwood Irrevocable Family Trust
By: ________
Name: Margot S. Briarwood
Title: Successor Individual Trustee
Date: ________
CO-TRUSTEE:
CALDWELL FIDUCIARY SERVICES INC., as Institutional Co-Trustee of the Eldon M. Briarwood Irrevocable Family Trust
By: ________
Name: Howard R. Phelan
Title: Senior Vice President and Trust Officer
Date: ________
BENEFICIARIES:
MARGOT S. BRIARWOOD, individually as Beneficiary
By: ________
Name: Margot S. Briarwood