SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
AMENDMENT NO. 1
TO
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
CHEM INTERNATIONAL, INC.
(Name of Issuer)
Common Stock, $.002 Par Value Per Share
(Title of Class of Securities)
163527203
(CUSIP Number)
Michael J. Nita
Shanley & Fisher, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
(973) 285-1000
(Name, Address and Telephone Number of Person Authorized
to Receive Notices and Communications)
June 22, 1998
(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(b)(3) or (4), check the following box:
Note: Schedules filed in paper format shall include a signed original and
five copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.
The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934 or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
(Continued on following pages)
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1 NAME(S) OF REPORTING PERSON(S)
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON (ENTITIES ONLY)
E. Gerald Kay
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2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a)
(b)
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3 SEC USE ONLY
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4 SOURCE OF FUNDS
OO
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5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEMS 2(d) or (e)
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6 CITIZENSHIP OR PLACE OF ORGANIZATION
United States of America
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NUMBER OF (7) SOLE VOTING POWER . . . . . . . . . .2,843,300
SHARES
BENEFICIALLY (8) SHARED VOTING POWER . . . . . . . . . . . . . 0
OWNED BY
EACH (9) SOLE DISPOSITIVE POWER. . . . . . . . 2,537,978
REPORTING
PERSON (10) SHARED DISPOSITIVE POWER. . . . . . . . 305,322
WITH
- ------------------------------------------------------------------------------
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
2,843,300 (includes presently exercisable stock options to purchase
100,000 shares)
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12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES
- ------------------------------------------------------------------------------
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
Approximately 53.9%*
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14 TYPE OF REPORTING PERSON
IN
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* Based on 5,178,300 shares of Common Stock of the Issuer outstanding on June
22, 1998 and assuming reporting person exercised all stock options presently
exercisable or exercisable within sixty days to purchase 100,000 shares.
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Item 1. Security and Issuer
The securities to which this statement relates are shares of common
stock, par value $.002 per share (the "Common Stock"), of Chem International,
Inc. a Delaware corporation (the "Issuer").
The principal executive offices of the Issuer are located at 201
Route 22, Hillside, New Jersey 07205.
Item 2. Identity and Background
Mr. Kay is currently employed as the President, Chairman of the
Board, Chief Executive Officer and a Director of the Issuer. The business
address is c/o Chem International, Inc., 201 Route 22, Hillside, New Jersey
07205. Mr. Kay is the father of Ms. Riva Kay and Ms. Christina Kay, both Vice-
Presidents and directors of the Issuer. Mr. Kay disaffirms the existence of a
group.
During the last five years, Mr. Kay has not been convicted in a
criminal proceeding (excluding traffic violations or similar misdemeanors) or
been a party to a civil proceeding of a judicial or administrative body of
competent jurisdiction resulting in a judgment, decree or final order enjoining
future violations of, or prohibiting or mandating activities subject to, federal
or state securities laws or finding any violation with respect to such laws.
Mr. Kay is a United States citizen.
Item 3. Source and Amount of Funds or Other Consideration
The following described transactions were made by gift on
June 22, 1998, for estate planning purposes:
(1) Mr. Kay transferred by gift 100,000 shares of Common Stock to
each of the Riva Kay Family Trust and the Christina Kay Family Trust. Ms. Riva
Kay is the beneficiary and co-trustee of the Riva Kay Family Trust and shares
voting and dispositive power. Ms. Christina Kay is the beneficiary and
co-trustee of the Christina Kay Family Trust and shares voting and dispositive
power. Mr. Kay does not have voting or dispositive power with respect to shares
held by the Riva Kay Family Trust and the Christina Kay Family Trust. Mr. Kay
does not have beneficial ownership with respect to such shares.
(2) Mr. Kay transferred by gift 100,000 shares of Common Stock to
each of the E. Gerald Kay Annuity Trust I (Ms. Riva Kay is the beneficiary) and
E. Gerald Kay Annuity Trust II (Ms. Christina Kay is the beneficiary). Mr. Kay
has the sole voting and dispositive power with respect to shares held by both
trusts. Mr. Kay retains an annuity interest in the trusts.
(3) Ms. Riva Kay transferred by gift 152,661 shares of Common Stock
to the Riva Kay Grantor Trust, of which Ms. Riva Kay is the beneficiary. Mr. Kay
is the trustee and has sole voting power with respect to shares held by the
trust. Mr. Kay and Ms. Riva Kay share dispositive power with respect to shares
held by the trust.
(4) Ms. Christina Kay transferred by gift 152,661 shares of Common
Stock to the Christina Kay Grantor Trust, of which Ms. Christina Kay is the
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beneficiary. Mr. Kay is the trustee and has sole voting power with respect to
shares held by the trust. Mr. Kay and Ms. Christina Kay share dispositive power
with respect to shares held by the trust.
Item 4. Purpose of Transaction
The purpose of the transactions described above in Item 3 were made
for estate planning purposes.
Item 5. Interest in Securities of the Issuer
(a) Mr. Kay is the beneficial owner of 2,843,300 shares of Common
Stock, which represents approximately 53.9% of the Issuer's Common Stock
outstanding as of June 22, 1998, assuming Mr. Kay's exercise of all outstanding
stock options presently exercisable or exercisable within sixty days to purchase
100,000 shares. The shares of Common Stock beneficially owned by Mr. Kay
include: (i) 843,300 shares owned by Gerob Realty Partnership, a New Jersey
general partnership ("Gerob") for which Mr. Kay is a general partner and
exercises sole voting and investment authority, (ii) 100,000 shares held by the
Riva Kay Grantor Trust, (iii) 100,000 shares held by the Christina Kay Grantor
Trust, (iv) 152,661 shares held by the E. Gerald Kay Annuity Trust I, (vi)
152,661 shares held by the E. Gerald Kay Annuity Trust II and (vii) presently
exercisable options to purchase 100,000 shares of Common Stock, which options
were granted under the Issuer's Stock Option Plan.
(b) Number of shares of Common Stock as to which Mr. Kay has:
(i) Sole power to vote or direct the vote: 2,843,300
(ii) Shared power to direct the vote: 0
(iii) Sole power to dispose or to direct the disposition:
2,537,978
(iv) Shared power to dispose or to direct the disposition:
305,322
(c) Except as described in this Statement of this Schedule 13D, Mr.
Kay has not had any transactions in Common Stock of the Issuer during the last
60 days.
(d) Each Trust described in Item 3 above has the right to receive
dividends from, and proceeds from the sale of, the shares of Common Stock held
by it. Other than the rights of the trusts and the interests of the limited
partners of Gerob Associates, L.P. (the other general partner of Gerob) to
receive a distribution of any dividends of the Issuer received by Gerob or the
proceeds of any sale of Common Stock owned by Gerob, Mr. Kay has the sole right
to receive or the power to direct the receipt of dividends from, or the proceeds
from the sale of, the Common Stock beneficially owned by him.
(e) N/A
Item 6. Contracts, Arrangements, Understandings or Relationships With
Respect to Securities of The Issuer
As Mr. Kay is a general partner of Gerob and is the sole general
partner of Gerob Associates, L.P. (the other general partner of Gerob), Mr. Kay
has the legal right to direct the voting and investment of the shares of Common
Stock owned by Gerob.
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Item 7. Material to be Filed as Exhibits
Exhibit 1 E. Gerald Kay Annuity Trust I
Exhibit 2 E. Gerald Kay Annuity Trust II
Exhibit 3 Riva Kay Grantor Trust
Exhibit 4 Christina Kay Grantor Trust
SIGNATURE
After reasonable inquiry and to the best knowledge and belief of the
undersigned, the undersigned certifies that the information set forth in this
statement is true, complete and correct.
Dated: June 29, 1998
/s/ E. Gerald Kay
-----------------
E. Gerald Kay
The original statement shall be signed by each person on whose
behalf the statement is filed or his authorized representative. If the statement
is signed on behalf of a person by his authorized representative (other than an
executive officer or general partner of the filing person), evidence of the
representative's authority to sign on behalf of such person shall be filed with
the statement, provided, however, that a power of attorney for his purpose which
is already on file with the Commission may be incorporated by reference. The
name of any title of each person who signed this statement shall be typed or
printed beneath his signature.
Attention: Intentional misstatements or omissions of fact
constitute federal criminal violations. (see 18 U.S.C. 1001).
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INDEX TO EXHIBITS
Exhibit Number Description
1 E. Gerald Kay Annuity Trust I
2 E. Gerald Kay Annuity Trust II
3 Riva Kay Grantor Trust
4 Christina Kay Grantor Trust
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E. GERALD KAY ANNUITY TRUST I
THIS DECLARATION OF TRUST AGREEMENT dated the 16th day of April,
1998, by and between E. GERALD KAY, residing at 3 Isabella Place, Glen Rock, New
Jersey (hereinafter referred to as the "Grantor") and E. GERALD KAY, residing at
3 Isabella Place, Glen Rock, New Jersey (hereinafter referred to as the
"Trustee"):
W I T N E S S E T H:
WHEREAS, the Grantor desires to establish a "Grantor Retained
Annuity Trust" as described in Section 2702(b)(1) of the Internal Revenue Code
of 1986, as amended, and the Treasury Regulations promulgated thereunder
(hereinafter referred to as the "Code" or through "Section" references); and
WHEREAS, concurrently with the execution of this trust agreement,
all of the right, title and interest in and to the property described in the
annexed SCHEDULE A shall be transferred to the Trustee;
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto agree as follows:
FIRST: The Trustee shall hold all transferred property, as described
in annexed SCHEDULE A, in trust (said trust being named and hereinafter
sometimes referred to as the "E. GERALD KAY ANNUITY TRUST I"), and shall manage,
administer, invest and reinvest the principal of the E. GERALD KAY ANNUITY TRUST
I, and shall collect and receive the income thereof, and shall pay over and
distribute such income and principal as hereinafter provided:
(A) In each taxable year of the Trust during the five (5)
years following the date of this Declaration of Trust (the "Trust Term"), the
Trustee shall pay to or for the benefit of the Grantor, an annuity amount (the
"Annuity Amount"), in cash, in kind, or partly in cash and partly in kind, equal
to TWENTY FOUR PERCENT (24%) of the initial net fair market value of the trust
property determined as of the date of this trust agreement. The Annuity Amount
shall be paid, in annual installments, no later than the date by which the
Trustee is required to file the Federal income tax return of the trust for such
year (without regard to extensions). The Annuity Amount shall be paid from
income, and to the extent that income is not sufficient, from principal. The
Trustee is prohibited from paying the Annuity Amount in the form of a promissory
note made payable to the Grantor. Any net income of the E. GERALD KAY ANNUITY
TRUST I in excess of the Annuity Amount shall be added to principal.
(B) In determining the Annuity Amount, the Trustee shall
prorate the same on a daily basis for a short taxable year and for the taxable
year ending with the Grantor's death.
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(C) No additional contributions shall be made to the E. GERALD
KAY ANNUITY TRUST I after the initial contribution.
(D) Prior to the expiration of the Trust Term (or the earlier
termination of the Trust in the event of the death of the Grantor), no
distributions from the E. GERALD KAY ANNUITY TRUST I shall be made to anyone
other than to the Grantor.
(E) The interest of the Grantor shall not be subject to
commutation.
(F) Prior to the expiration of the Trust Term, the Grantor, in
his individual capacity, shall have the right to reacquire the trust principal
by substituting other property of an equivalent value for such principal.
(G) If the initial net fair market value of the Trust assets
is incorrectly determined, or if an incorrect payment of the Annuity Amount is
made, then within a reasonable period after the value is finally determined for
Federal tax purposes in the case of an incorrect valuation of assets, or,
promptly after the error is discovered in the case of an incorrect payment, the
Trustee shall pay to the Grantor in the case of an underpayment or collect from
the Grantor in the case of an overpayment, an amount equal to the difference
between the amount which the Trustee should have paid the Grantor and the amount
which the Trustee paid the Grantor.
(H) Notwithstanding any contrary statute or case law, unless
the absence of such reimbursement is not deemed to be a gift under the Code, the
Trustee shall be required to pay to the Grantor the amount necessary, if any, to
reimburse the Grantor for any taxes paid by the Grantor on account of or in
discharge of any income tax liability of the Grantor (whether Federal, State or
otherwise) attributable to taxable income of the E. GERALD KAY ANNUITY TRUST I
which is taxable to the Grantor but which is not distributed to the Grantor.
(I) In the event the Grantor shall die prior to the expiration
of the Trust Term, the Successor Trustee shall pay over and distribute all of
the then principal and income of the trust to the Grantor's estate.
(J) Upon the expiration of the Trust Term, the Trustee shall
pay over and distribute all of the then principal and income of the Trust, other
than any amounts then owed or distributable to the Grantor pursuant to the
preceding Subarticles of this Article (such remaining property in the E. GERALD
KAY ANNUITY TRUST I shall hereinafter be referred to as the "remaining principal
and income"), shall be paid over and distributed to the Grantor's daughter, RIVA
KAY, if she shall then be living, or if not, to the issue of the Grantor's said
daughter, who shall then be living, per stirpes, or, in default thereof, to the
then living issue of the Grantor, per stirpes, or, in further default thereof,
to those persons who would take, and in such shares as they would
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take, under the laws of intestate succession of the State of New Jersey, from
the estate of the Grantor's said daughter as if the Grantor's said daughter had
died on the date of the termination of the Trust and the Grantor's said
daughter's entire estate had consisted of the principal of the trust fund;
provided, however, that if the Grantor's said daughter shall not then have
attained the age of forty-five (45) years, such remaining principal and income
shall not be distributed to the Grantor's said daughter outright, but shall be
held, IN FURTHER TRUST, in accordance with the terms and conditions set forth in
Article SECOND hereof.
(K) The Grantor intends to create a trust in which the Grantor
retains the right to receive a "qualified interest" as defined in Section
2702(b)(1) of the Code, and this trust agreement shall be so interpreted. The
Trustee acting alone shall have the power to amend this Agreement for the sole
purpose of complying with the requirements of Section 2702(b)(1) of the Code.
SECOND: DAUGHTER'S TRUST. The Trustees shall hold,
administer, invest, and reinvest the principal of each trust created hereunder
for the Grantor's daughter, RIVA KAY, collect the income therefrom, and
distribute such income and principal for the benefit of the Grantor's said
daughter as follows:
(A) Until the termination of the Trust
established hereunder for the benefit of the Grantor's daughter, RIVA KAY, the
Trustees shall pay over to the Grantor's said daughter all of the net income of
such trust at convenient intervals, but no less frequently than
quarter-annually.
(B) Prior to the termination of such trust,
the Trustees, at any times that they deem it advisable, may pay to or apply for
the benefit of the Grantor's daughter, RIVA KAY, such sums out of the principal
of such trust (including the whole thereof) as the Trustees, in their sole and
absolute discretion, deem advisable to provide for the care, health,
maintenance, support, and education (including, but not limited to, elementary,
secondary, undergraduate, graduate, and postgraduate education) of the Grantor's
said daughter, as well as for any expenses incurred by or for the Grantor's said
daughter because of any illness, operation, infirmity, or emergency, or for such
other purposes, irrespective of cause or need, as the Trustees, in their sole
and absolute discretion, deem to be in the best interests of the Grantor's said
daughter.
(C) Upon the Grantor's daughter, RIVA KAY,
attaining the age of forty-five (45 years, the Trustees shall convey and deliver
to the Grantor's said daughter all of the property then belonging to the
principal of such trust, together with any undistributed income.
(D) If the Grantor's daughter, RIVA KAY, dies
before attaining the age of forty-five (45) years, then upon the Grantor's said
daughter's death, the Trustees shall dispose of the principal and undistributed
income of such trust as follows:
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(1) The Trustees, upon the death of the
Grantor's daughter, RIVA KAY, shall transfer and set over the then remaining
principal and undistributed income of such trust to such creditors of her
estate, in such portions or amounts, as the Grantor's said daughter may, by her
Last Will and Testament, appoint to receive the same; provided, however, that
the Grantor's said daughter shall not be deemed to have exercised such general
power of appointment unless the Grantor's said daughter specifically refers
thereto in her Last Will and Testament.
(2) Any portion of the principal and
undistributed income of such trust remaining that the Grantor's daughter, RIVA
KAY, shall not have validly appointed by her Last Will and Testament as above
provided shall be paid over and distributed to the issue of the Grantor's said
daughter, who shall then be living, per stirpes, or, in default thereof, to the
issue of the Grantor, who shall then be living, per stirpes, or, in further
default thereof, to those persons who would take, and in such shares as they
would take, under the laws of intestate succession of the State of New Jersey,
from the estate of the Grantor's said daughter as if the Grantor's said daughter
had died on the date of the termination of the trust and the Grantor's said
daughter's entire estate had consisted of the principal of the trust fund.
THIRD: (A) Should any part of the trust created hereunder vest in
absolute ownership in any minor, the Trustee of the trust is authorized, with
respect to such part of the principal thereof, in his sole and nonreviewable
discretion, in each such case: (1) to pay over and distribute such part to a
custodian for such minor designated under an applicable UNIFORM GIFTS TO MINORS
ACT or UNIFORM TRANSFERS TO MINORS ACT, until age twenty-one (21), and the
receipt of such custodian shall constitute a complete discharge of the Trustee's
responsibility for the administration of such part; or (2) to hold, administer,
invest and reinvest such part for such minor's benefit during his or her
minority, and to pay or apply to or for the benefit of such minor, so much, all
or none of the net income and principal of said part as the Trustee, in his sole
and nonreviewable discretion, shall deem advisable to provide for the care,
maintenance, support and education (including, but not limited to, elementary,
secondary, undergraduate, graduate and postgraduate education) of such minor, as
well as for any expenses incurred by or for him or her because of any illness,
operation, infirmity, emergency, or for such other purposes, irrespective of
cause or need, as the Trustee, in his sole and nonreviewable discretion, shall
deem to be in the best interest of such minor, and to accumulate for the benefit
of such minor any such income not so applied or paid. The authority granted to
the Trustee hereunder shall be in addition to, and not in lieu of, any other
alternative available to him with respect to the administration and distribution
of such part of the principal of the trust, and it shall be construed as a power
only and shall not operate to suspend the absolute ownership of such part, or of
such accumulations of income, if any, of such minor, nor shall it prevent the
absolute vesting thereof in such minor.
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(B) Whenever, pursuant to any provisions of
this agreement, the Trustee is authorized to pay or to apply any income or
principal to or for the benefit of a minor, the Trustee may, in his sole and
nonreviewable discretion, make such payment or application by expending the same
directly for the benefit of such minor, or by paying the amount so to be paid or
applied to the parent or legal guardian of such minor, or to the person with
whom such minor may reside, or to a person standing in loco parentis to such
minor, or to a custodian for such minor designated under an applicable UNIFORM
GIFTS TO MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT, until age twenty-one
(21), or directly to such minor, or otherwise, as the Trustee may, from time to
time, deem expedient, and the receipt of such minor of such other payee shall be
a full acquittance to the Trustee to the extent of such payments.
(C) Any income which the Trustee is authorized
to pay to any adult person, pursuant to this agreement, may be applied by the
Trustee, in his discretion, for the benefit of such person.
(D) The Trustee, in his capacity hereunder,
and any person or persons to whom the Trustee is authorized hereunder to pay
over and distribute a part of the principal of the trust created hereunder, or
to pay income for the benefit of a minor, shall serve without bond; and he shall
not be required to qualify as a guardian of any minor for whom property is held
or income paid pursuant to the provisions of this Article.
FOURTH: Except with respect to those powers the exercise of which
would conflict with Section 2702(b)(1) of the Code, in the administration of the
trust created hereunder, the Trustee shall have the following powers, which in
each and every instance may be exercisable by him at such times (if at all), in
such manner, and in accordance with such criteria, as he, in his sole
discretion, shall deem appropriate;
(a) To retain any investment and property
which may be received by him for such length of time as to him may seem proper,
without liability by reason of such retention.
(b) To make such investments and reinvestments
of principal and accumulated income as she may consider proper, without
limitation to what are known as legal or trust investments. Any such investments
may be held in bearer form, or in the name of the Trustee, or in the name of a
nominee or nominees.
(c) To retain cash or the proceeds from the
sale of any assets until such time or times as he deems it appropriate to invest
such funds.
(d) With respect to any securities forming
part of the trust created hereunder: To exercise all voting rights, either in
person or by proxy; to exercise conversion, subscription, option and similar
rights; to enter or refuse to
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enter into any dissolution, liquidation, consolidation, recapitalization,
reorganization, sale of assets, merger or other change in capital structure, and
in connection therewith, to make exchanges of securities and to enter into
agreements on such terms and conditions as he may deem advisable; and to enter
into voting trusts and agreements with other stockholders, and other holders of
securities, and the corporations which shall have issued such stock or
securities, or any one or more of such persons, for such purposes and for such
period of time (whether or not the same extends beyond the actual or probable
duration of the trust created hereunder), and upon such terms and conditions as
he shall deem advisable.
(e) To enter into any lease or leases, without
application to any court, of any or all real or personal property held
hereunder, for such period (whether or not the same expires prior to or extends
beyond the actual or probable duration of the trust created hereunder), and upon
such terms and conditions as he shall deem advisable.
(f) To borrow money or property, either upon
the security of any or all of the assets of the trust created hereunder, or
without security or otherwise, upon such terms and conditions and for such
purposes in connection with the administration of the trust as to him shall seem
proper.
(g) To grant, bargain, sell, exchange,
mortgage, grant options to buy, sell or lease, or otherwise dispose of any or
all real or personal property, or both, at any time held hereunder, and/or any
interest in any business which may come into his hands as part of the trust
created hereunder, either at public or private sale, for cash or on credit, or
partly for cash and partly on credit, for such period and upon such terms and
conditions, in such manner and for such purposes, and either in whole or in
part, as he may deem proper; and to make, execute, acknowledge and deliver good
and sufficient instruments for that purpose; PROVIDED, HOWEVER, that in no event
shall such sale or disposition be for less than an adequate consideration in
money or moneys worth. No purchaser, upon any sale or other disposition, shall
be bound to see to the application of the money or property arising therefrom or
to inquire into the validity, expediency or propriety of any such sale or
disposition.
(h) To maintain and insure all real and
personal property, and to develop, repair, remodel, alter, build on, improve,
rebuild or reconstruct any or all real property, either by building,
constructing or erecting new buildings or by repairing, remodeling, altering,
rebuilding or reconstructing existing buildings, for such purposes, to any and
every extent, and in such manner as he may deem proper, and to borrow moneys in
connection therewith upon the security of any such real property and/or of any
or all other assets of the trust created hereunder.
(i) To foreclose any mortgage or mortgages,
and to take title to the property or any part thereof affected by
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such mortgage, or, in his discretion, to accept a conveyance of any property in
lieu of foreclosure, and to collect the rents and income therefrom, either
through a receiver or directly and to protect such property against foreclosure
under any mortgage that shall be a prior lien on said property, or to redeem
from foreclosure under any such mortgages, as well as to protect such property
against nonpayment of taxes, assessments or other liens.
(j) To adjust, compromise or arbitrate claims
or demands of, or against, the trust created hereunder, whether such claims are
due or shall become due in the future, including, without limitation, any
overpayment or refund claim, or any deficiency, additional assessment or other
liability, relating to any Federal, state, county, municipal or other tax
irrespective of the nature thereof.
(k) To join with any other person, persons,
nominee or nominees in the incorporation of any and all corporations for such
purposes, for such periods of time, and upon such terms and conditions
respecting the organization, operation and maintenance thereof (including, but
not by way of limitation, the adoption of by-laws, rules and regulations) as he
shall deem advisable, and to pay for the stock of the such corporation with any
or all of the assets of the trust created hereunder, and to contribute to the
capital of such corporation, or to lend to it, any or all of the assets of the
trust created hereunder.
(l) To join with any other person, persons,
nominee or nominees in any partnership, whether general or limited, or in any
joint venture or other business association, for such purposes, for such period
of time, and upon such terms and conditions, as he shall deem advisable, and to
contribute to the capital of any such partnership, joint venture or other
business association, or to lend to it any of all of the assets of the trust
created hereunder.
(m) To grant options and execute option
agreements with respect to the sale or lease of property held by him hereunder,
without obligation to repudiate the same in favor of better offers.
(n) To assign one or more shares of the stock
of any corporation which may at an time be held by her hereunder to herself or
to a nominee or nominees, for the purpose of qualifying such person to act as a
director of the corporation, the stock of which is so assigned.
(o) To engage such attorneys, clerks,
employees, agents, accountants, brokers, investment counsel, officers,
architects, contractors, subcontractors, surveyors and such other individuals,
firms or corporations, as he shall deem necessary or helpful in connection with
the administration of the trust created hereunder, at such wages, fees,
compensation, remuneration, commission rates, prices, consideration or
otherwise, and upon such terms and conditions, as he shall deem proper,
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including, without limitation, the right to deposit with them any property of
the trust created hereunder, and to delegate to any of them discretionary and
other powers and authority. Such compensation shall in no event be deducted from
any commissions or other compensation payable to the Trustee.
(p) In any case where the applicable law is
unclear or uncertain, to allocate to income or to principal, or to apportion
between income and principal, receipts, disbursements, depletion and
depreciation in such manner as he shall deem proper.
(q) To execute and deliver all documents,
contracts and instruments necessary or advisable in connection with the
administration of the trust created hereunder.
(r) To make and retain joint investments and
investments of undivided interests in any property, real or personal, whether or
not all the property is held hereunder, and whether or not the provisions under
which such other property is held are similar, and to administer, or to permit
to be administered, all or any part of such property in one or more consolidated
funds in which the same shall have joint or undivided interests without any
physical division of the investments, or to hold and administer any property in
a common trust fund administered by any acting corporate trustee.
(s) To purchase any improved or unimproved
real property, at public or private sale, for cash or on credit, or partly for
cash and partly on credit, and/or subject to any existing mortgage or mortgages,
for such purposes and upon such terms and conditions as he shall deem advisable.
(t) To make any loans, in such amounts, upon
such terms, and to such persons (other than the Grantor), firms or corporations,
as may be deemed advisable.
(u) To continue to hold and administer the
interest in any business of which the Grantor may be the owner, whether such
ownership be as an individual, partner, joint venturer, or stock holder, or
otherwise, or to engage in and operate any business, for such purposes, in such
manner, and for such period of time, as he shall deem proper, and to apply to
the conduct of any such business any or all of the assets of the trust created
hereunder.
(v) To dissolve or to participate in the
dissolution of any partnership or limited liability company in which the Grantor
shall have an interest or in which the Trustee, in the administration of the
trust created hereunder, shall hold an interest, or of which he shall become a
member, whether such dissolution be by agreement, operation of law, or by the
judgment of any court, and to enter into any agreements with respect thereto,
upon such terms and conditions as he shall deem proper.
(w) To buy, sell and trade in securities of
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any nature, including short sales, on margin, and for such purposes to maintain
and operate margin accounts with brokers, and to pledge any securities held or
purchased by him with such brokers as security for loans and advances made to
him.
FIFTH: Except with respect to those powers the exercise of which
would conflict with Section 2702(b)(1) of the Code in the administration of the
trust created hereunder, the Grantor directs that:
(A) In any case in which the Trustee is
required or authorized in his discretion to divide the trust created hereunder,
or any portion thereof, into parts or shares, and/or is required to distribute
the same, or any portion thereof, or any part or share into which the same shall
have been divided, either to a single distributee, or to two (2) or more
distributees, he, in his sole discretion, may make such partition, division or
distribution wholly in kind or in money, or partly in kind or in money; and may
distribute different property interests having varying income tax bases to the
several distributees, and the choice and relative value of the property or money
so distributed, partitioned or divided shall, in the absence of fraud or bad
faith, be binding and conclusive on everyone interested therein, and he shall in
no event be accountable for any error of judgment or discretion in exercising
the power and authority herein conferred.
(B) Any individual Trustee acting hereunder
shall not be accountable for any loss which may occur to the trust herein
created as a result of the exercise of, or the refusal to exercise, any of the
powers or discretions vested in the Trustee unless such losses shall result from
bad faith or fraud on the part of the Trustee.
(C) No loss whatever resulting to the trust
created hereunder, through the ownership or operation of any business by the
Trustee, or as a result of the building, construction or erection by her of any
building, improvements or structures, whether the same be carried on by a
corporation, partnership, proprietorship, or otherwise, shall be chargeable
against any individual Trustee personally.
(D) In each and every instance where the
Trustee has the discretion to pay all or any part of the income and/or principal
of the trust created hereunder, to any beneficiary, or to apply the same for his
or her benefit, the Trustee may take into consideration, but shall not be
required to do so, any other income or property which may be available to such
beneficiary, including the support which a spouse or parent does provide, or is
obligated to provide.
(E) All the powers granted herein to the
Trustee are in addition to the powers granted to him by operation of law.
(F) The Trustee may consult with counsel and
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shall be fully protected in any course of conduct taken in good faith in
accordance with the advice of counsel.
(G) The Trustee may exercise all of the power
and authority conferred upon him herein with respect to all property held under
a power in trust.
(H) No Trustee shall be disqualified from
acting hereunder or from exercising any power granted herein because he may hold
an interest in property in which the trust created hereunder shall also hold an
interest, or be a creditor of the trust, or be an employee or agent of, or the
holder of an interest in, any business, sole proprietorship, partnership, joint
venture, association, corporation, or otherwise in which the trust created
hereunder may hold an interest, or by reason of the fact that she may also be
serving as an executrix of the Grantor's estate or the trustee of any trust
established under the Grantor's Last Will and Testament.
The Trustee may be employed and/or engaged, in any capacity,
or render services to the trust created hereunder, and/or may be employed and/or
engaged by any corporation, partnership, joint venture, association, sole
proprietorship or other entity in which the trust may have an interest, and he
shall be entitled to receive and to retain (in addition to his remuneration for
services as a Trustee hereunder) such compensation, perquisites and
reimbursements of expenses in connection with such services, payable in such
manner, and upon such terms and conditions, as he, in his discretion, shall deem
proper.
The Trustee is further authorized, notwithstanding any
provision of law to the contrary in acting on behalf of the trust created
hereunder, or on behalf of any corporation, trust, partnership, joint venture,
association, sole proprietorship, or other entity in which the trust created
hereunder shall have an interest, to deal and have transactions of every kind or
nature, either with herself or with any corporation, estate, trust, partnership,
joint venture, association, sole proprietorship, or other entity in which he may
have an interest, either personally or as a fiduciary, and either directly or
indirectly, upon such terms and conditions as he, in his discretion, shall deem
advisable, including, if appropriate, provision for a reasonable profit from
such transactions; and any and all such transactions or dealings shall be proper
and valid if made in good faith, and shall be fully binding upon the trust
created hereunder, notwithstanding any such interest on his part, and under no
circumstances hall there arise any presumption of fraud or other impropriety on
the part of the Trustee in relation to any such transactions or dealings.
(I) If any individual Trustee acting hereunder
shall become "incapacitated", as that term is defined in the immediately
succeeding Subarticle of this Article, he shall immediately cease to be a
Trustee hereunder and such Trustee shall be treated as if he had resigned on the
date that such Trustee shall have become incapacitated.
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(J) An individual Trustee acting hereunder
shall be deemed to be "incapacitated" at such time as there shall be:
(1) A currently applicable court order
holding such individual to be legally incapacitated to act on her own behalf or
appointing a conservator or guardian to act for such individual, or
(2) Duly executed, witnessed, and
acknowledged written certificates of two doctors of medicine who are licensed to
practice medicine in any state of the United States (when such certificates are
in the possession of any successor Trustee designated under, or pursuant to, the
provisions of this Agreement, or if none, in the possession of one or more
persons to whom, or for whose benefit the income of the trust created hereunder
is then to be paid or applied, or in the discretion of the Trustee, may be so
paid or applied), each such certificate stating that such doctor has examined
such individual and has concluded that such individual was, at the date thereof,
incapacitated, either physically or mentally, such that he was unable to manage
his affairs with judgment and reason.
SIXTH: The Trustee hereby expressly undertakes and assumes the trust
hereby created and agrees to carry out the provisions of this trust agreement.
Any successor Trustee shall qualify by exercising an instrument in writing, duly
acknowledged, by which he, she or it expressly agrees to assume the trust
created hereunder and to carry out the provisions hereof.
SEVENTH: Whenever in this agreement the word "Trustee" is used, it
shall be construed to include the Trustee, any co-Trustees herein or hereafter
designated, and their successor or successors in office, and all reference to
such Trustee shall be construed in the singular or plural, and in such gender as
the sense and circumstances require.
EIGHTH: (A) For all purposes under this trust agreement, whether for
the determination of relationships or otherwise, an adopted child shall be
considered to have an shall be accorded, exactly the same status as a child born
to the adopting parent in lawful wedlock.
(B) Except as provided in Subarticle (A) of
this Article, for all purposes under this trust agreement, whether for the
determination of relationships or otherwise, a child who is born out of wedlock
and whose natural parents do not thereafter marry as of the date any property
hereunder would otherwise devolve to such child, and all issue of such child,
shall not be considered to have, and shall not be accorded, any rights
hereunder, unless such child has been specifically named as a beneficiary in
this agreement.
NINTH: This trust instrument and the trust created
hereunder shall be governed by the law of the State of New Jersey.
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TENTH: Except as hereinbefore specifically provided in
Article FIRST hereof, this trust agreement may not be altered, amended, revoked
or terminated in any respect whatsoever by anyone.
ELEVENTH: No bond or other security shall be required of
the Trustee, in any jurisdiction in which she may be called upon to act.
TWELFTH: Any Trustee may resign as a Trustee hereunder without prior
approval of any court, by delivering to the Grantor, if living, or if not
living, to each and every adult beneficiary hereunder, a written notice of such
resignation.
THIRTEENTH: (A) The Grantor may during his lifetime, pursuant to a
written instrument executed by him (which he may alter or supersede from time to
time), acknowledged in the same manner as is then required to record deeds of
real estate in the State of New Jersey, and served upon the then acting Trustee
hereunder;
(1) Designate one or more
individuals (other than the Grantor) and/or corporate banking institutions (and
may fix the order in which such individuals and/or corporate banking
institutions shall serve) as co-Trustee or co-Trustees to serve with any then
acting Trustee hereunder and/or as successor Trustees, to succeed any trustee,
in the event he or she shall cease to act as Trustee hereunder for any reason
whatsoever;
(2) Eliminate or change the order of
succession of any successor Trustee or co-Trustee designated herein and/or
hereafter designated pursuant to this Subarticle;
(3) Waive all or any part of the
rights hereinabove in this Subarticle (a) described.
(B) (1) Any provisions of this Agreement to
the contrary notwithstanding, no Trustee hereunder shall have any power or
discretion, or be deemed to be a Trustee, with respect to payments or
applications of income or principal, or allocations of receipts or expenses
between income and principal, to or for the use or benefit of (a) himself or
herself as a beneficiary of any trust created hereunder, or (b) any person whom
said Trustee, in his or her individual capacity, is legally obligated to
support, if such payment, application, or allotment shall constitute a discharge
of any part of such Trustee's legal support obligation.
(2) Any provision of this Agreement to
the contrary notwithstanding, the discretionary power to pay or apply trust
principal to or for the use or benefit of any trust beneficiary shall be
exercised solely by such Trustees other than any Trustee who has a beneficial
interest in the remainder of such trust that would cause the exercise of such
power to be treated as a gift by such Trustee for federal gift tax purposes. If
at any time there is no Trustee qualified and acting who does not have
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such an interest, such powers shall be exercised by all the Trustees (subject to
any other provision of this Agreement restricting the exercise of such powers)
in their sole and absolute discretion, but solely for the purpose of enabling
the beneficiary to maintain his or her accustomed standard of living and for his
or her reasonable support, education, maintenance, and health.
(C) In the event that E. GERALD KAY shall
cease to act as Trustee hereunder, irrespective of the cause thereof, then the
Grantor's daughter, RIVA KAY, and the Grantor's friend and attorney, KEVIN M.
KILCULLEN, shall act as Successor Co-Trustees in his place and stead.
(D) If and for so long as there shall be two
(2) or more Trustees acting hereunder, then any individual Trustee is
authorized, at any time and from time to time, by revocable power of attorney in
writing filed with all of the other Trustees then acting, to delegate to any one
or more of his or her co-Trustees any duty or power of a ministerial nature. The
revocation of any such delegation shall be in writing and delivered to all of
the other Trustees then acting.
(E) Subsequent to the death of the Grantor,
the then income beneficiary of any trust established hereunder shall have the
right to remove any Co-Trustee acting hereunder by delivering a written
instrument to such Co-Trustee acknowledged in the manner as is then required to
record deeds of real estate in the State of New Jersey; provided, however, that
said right of removal may be exercised by such beneficiary only three (3) times
during such beneficiary's lifetime; and provided further, however, that such
beneficiary must then designate a corporate banking institution or trust company
then having assets under management in excess of ONE BILLION ($1,000,000,000)
DOLLARS to serve as Co-Trustee of such trust if one is not then serving, it
being the Grantor's intention that any Co-Trustee removed pursuant to this
Paragraph (E) shall be replaced by a corporate banking institution or trust
company.
(F) The last acting individual sole Trustee
for whom no designated successor shall be available to act for any reason
whatsoever may, pursuant to a written instrument; executed by him or her during
his or her lifetime (which he or she may alter or supersede from time to time),
acknowledged in the same manner as is then required to record deeds of real
estate in the State of New Jersey or by his or her Last Will and Testament duly
admitted to probate, designate one or more individuals and/or corporate banking
institutions (and may fix the order in which such individuals and/or corporate
banking institutions shall serve) as co-Trustee or co-Trustees, to serve with
such sole individual Trustee, and/or as successor Trustee or Trustees, to
succeed such sole individual Trustee, in the event he or she shall cease to act
as Trustee hereunder, for any reason whatsoever.
FOURTEENTH: The Grantor intends to create a
"Grantor Retained Annuity Trust" as described in Section 2702(b)(1)
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of the Code. Accordingly, notwithstanding anything hereinbefore contained, all
of the terms, powers, rights, privileges, etc. of the E. GERALD KAY ANNUITY
TRUST I created hereunder shall be interpreted, valued, managed and administered
in manner consistent with the Grantor's intent that this trust qualify for
treatment as a "Grantor Retained Annuity Trust" (as hereinbefore defined). To
the extent that any provision of the E. GERALD KAY ANNUITY TRUST I requires
amendment to qualify said trust as a "Grantor Retained Annuity Trust" (as
hereinbefore defined), then, to such limited extent, the Trustee shall have the
right to amend said trust.
IN WITNESS WHEREOF, the Grantor and Trustee have
hereunder set their hands and seals the day and year first above
written.
WITNESS:
TRACY DANIEL E. GERALD KAY (L.S.)
- ------------ -------------
E. GERALD KAY, Grantor
TRACY DANIEL E. GERALD KAY (L.S.)
- ------------ -------------
E. GERALD KAY, Trustee
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SCHEDULE A
100,000 shares of Chem International Restricted Common
Stock
<PAGE>
STATE OF NEW JERSEY )
)
COUNTY OF MORRIS )
BE IT REMEMBERED, that on this 16th day of April, 1998 before me,
the subscriber, personally appeared E. GERALD KAY who, I am satisfied, is the
Grantor and Trustee mentioned in the within instrument, to whom I first made
known the contents thereof, and thereupon he acknowledged that he signed, sealed
and delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed.
KEVIN M. KILCULLEN
------------------
Kevin M. Kilcullen
Attorney at law
State of New Jersey
<PAGE>
E. GERALD KAY ANNUITY TRUST II
THIS DECLARATION OF TRUST AGREEMENT dated the 16th day of April,
1998, by and between E. GERALD KAY, residing at 3 Isabella Place, Glen Rock, New
Jersey (hereinafter referred to as the "Grantor") and E. GERALD KAY, residing at
3 Isabella Place, Glen Rock, New Jersey (hereinafter referred to as the
"Trustee"):
W I T N E S S E T H:
WHEREAS, the Grantor desires to establish a "Grantor Retained
Annuity Trust" as described in Section 2702(b)(1) of the Internal Revenue Code
of 1986, as amended, and the Treasury Regulations promulgated thereunder
(hereinafter referred to as the "Code" or through "Section" references); and
WHEREAS, concurrently with the execution of this trust agreement,
all of the right, title and interest in and to the property described in the
annexed SCHEDULE A shall be transferred to the Trustee;
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the parties hereto agree as follows:
FIRST: The Trustee shall hold all transferred property, as described
in annexed SCHEDULE A, in trust (said trust being named and hereinafter
sometimes referred to as the "E. GERALD KAY ANNUITY TRUST II"), and shall
manage, administer, invest and reinvest the principal of the E. GERALD KAY
ANNUITY TRUST II, and shall collect and receive the income thereof, and shall
pay over and distribute such income and principal as hereinafter provided:
(A) In each taxable year of the Trust during the five (5)
years following the date of this Declaration of Trust (the "Trust Term"), the
Trustee shall pay to or for the benefit of the Grantor, an annuity amount (the
"Annuity Amount"), in cash, in kind, or partly in cash and partly in kind, equal
to TWENTY FOUR PERCENT (24%) of the initial net fair market value of the trust
property determined as of the date of this trust agreement. The Annuity Amount
shall be paid, in annual installments, no later than the date by which the
Trustee is required to file the Federal income tax return of the trust for such
year (without regard to extensions). The Annuity Amount shall be paid from
income, and to the extent that income is not sufficient, from principal. The
Trustee is prohibited from paying the Annuity Amount in the form of a promissory
note made payable to the Grantor. Any net income of the E. GERALD KAY ANNUITY
TRUST II in excess of the Annuity Amount shall be added to principal.
(B) In determining the Annuity Amount, the Trustee shall
prorate the same on a daily basis for a short taxable year and for the taxable
year ending with the Grantor's death.
<PAGE>
(C) No additional contributions shall be made to the E. GERALD
KAY ANNUITY TRUST II after the initial contribution.
(D) Prior to the expiration of the Trust Term (or the earlier
termination of the trust in the event of the death of the Grantor), no
distributions from the E. GERALD KAY ANNUITY TRUST II shall be made to anyone
other than to the Grantor.
(E) The interest of the Grantor shall not be subject to
commutation.
(F) Prior to the expiration of the Trust Term, the Grantor, in
his individual capacity, shall have the right to reacquire the trust principal
by substituting other property of an equivalent value for such principal.
(G) If the initial net fair market value of the Trust assets
is incorrectly determined, or if an incorrect payment of the Annuity Amount is
made, then within a reasonable period after the value is finally determined for
Federal tax purposes in the case of an incorrect valuation of assets, or,
promptly after the error is discovered in the case of an incorrect payment, the
Trustee shall pay to the Grantor in the case of an underpayment or collect from
the Grantor in the case of an overpayment, an amount equal to the difference
between the amount which the Trustee should have paid the Grantor and the amount
which the Trustee paid the Grantor.
(H) Notwithstanding any contrary statute or case law, unless
the absence of such reimbursement is not deemed to be a gift under the Code, the
Trustee shall be required to pay to the Grantor the amount necessary, if any, to
reimburse the Grantor for any taxes paid by the Grantor on account of or in
discharge of any income tax liability of the Grantor (whether Federal, State or
otherwise) attributable to taxable income of the E. GERALD KAY ANNUITY TRUST II
which is taxable to the Grantor but which is not distributed to the Grantor.
(I) In the event the Grantor shall die prior to the expiration
of the Trust Term, the Successor Trustee shall pay over and distribute all of
the then principal and income of the trust to the Grantor's estate.
(J) Upon the expiration of the Trust Term, the Trustee shall
pay over and distribute all of the then principal and income of the Trust, other
than any amounts then owed or distributable to the Grantor pursuant to the
preceding Subarticles of this Article (such remaining property in the E. GERALD
KAY ANNUITY TRUST II shall hereinafter be referred to as the "remaining
principal and income"), shall be paid over and distributed to the Grantor's
daughter, CHRISTINA KAY, if she shall then be living, or if not, to the issue of
the Grantor's said daughter, who shall then be living, per stirpes, or, in
default thereof, to the then living issue of the Grantor, per stirpes, or, in
further default thereof, to those persons who would take, and in such shares as
they would
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take, under the laws of intestate succession of the State of New Jersey, from
the estate of the Grantor's said daughter as if the Grantor's said daughter had
died on the date of the termination of the Trust and the Grantor's said
daughter's entire estate had consisted of the principal of the trust fund;
provided, however, that if the Grantor's said daughter shall not then have
attained the age of forty-five (45) years, such remaining principal and income
shall not be distributed to the Grantor's said daughter outright, but shall be
held, IN FURTHER TRUST, in accordance with the terms and conditions set forth in
Article SECOND hereof.
(K) The Grantor intends to create a trust in which the Grantor
retains the right to receive a "qualified interest" as defined in Section
2702(b)(1) of the Code, and this trust agreement shall be so interpreted. The
Trustee acting alone shall have the power to amend this Agreement for the sole
purpose of complying with the requirements of Section 2702(b)(1) of the Code.
SECOND: DAUGHTER'S TRUST. The Trustees shall hold,
administer, invest, and reinvest the principal of each trust created hereunder
for the Grantor's daughter, CHRISTINA KAY, collect the income therefrom, and
distribute such income and principal for the benefit of the Grantor's said
daughter as follows:
(A) Until the termination of the Trust
established hereunder for the benefit of the Grantor's daughter, CHRISTINA KAY,
the Trustees shall pay over to the Grantor's said daughter all of the net income
of such trust at convenient intervals, but no less frequently than
quarter-annually.
(B) Prior to the termination of such trust,
the Trustees, at any times that they deem it advisable, may pay to or apply for
the benefit of the Grantor's daughter, CHRISTINA KAY, such sums out of the
principal of such trust (including the whole thereof) as the Trustees, in their
sole and absolute discretion, deem advisable to provide for the care, health,
maintenance, support, and education (including, but not limited to, elementary,
secondary, undergraduate, graduate, and postgraduate education) of the Grantor's
said daughter, as well as for any expenses incurred by or for the Grantor's said
daughter because of any illness, operation, infirmity, or emergency, or for such
other purposes, irrespective of cause or need, as the Trustees, in their sole
and absolute discretion, deem to be in the best interests of the Grantor's said
daughter.
(C) Upon the Grantor's daughter, CHRISTINA
KAY, attaining the age of forty-five (45 years, the Trustees shall convey and
deliver to the Grantor's said daughter all of the property then belonging to the
principal of such trust, together with any undistributed income.
(D) If the Grantor's daughter, CHRISTINA KAY,
dies before attaining the age of forty-five (45) years, then upon the Grantor's
said daughter's death, the Trustees shall dispose of
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the principal and undistributed income of such trust as follows:
(1) The Trustees, upon the death of the
Grantor's daughter, CHRISTINA KAY, shall transfer and set over the then
remaining principal and undistributed income of such trust to such creditors of
her estate, in such portions or amounts, as the Grantor's said daughter may, by
her Last Will and Testament, appoint to receive the same; provided, however,
that the Grantor's said daughter shall not be deemed to have exercised such
general power of appointment unless the Grantor's said daughter specifically
refers thereto in her Last Will and Testament.
(2) Any portion of the principal and
undistributed income of such trust remaining that the Grantor's daughter,
CHRISTINA KAY, shall not have validly appointed by her Last Will and Testament
as above provided shall be paid over and distributed to the issue of the
Grantor's said daughter, who shall then be living, per stirpes, or, in default
thereof, to the issue of the Grantor, who shall then be living, per stirpes, or,
in further default thereof, to those persons who would take, and in such shares
as they would take, under the laws of intestate succession of the State of New
Jersey, from the estate of the Grantor's said daughter as if the Grantor's said
daughter had died on the date of the termination of the trust and the Grantor's
said daughter's entire estate had consisted of the principal of the trust fund.
THIRD: (A) Should any part of the trust created hereunder vest in
absolute ownership in any minor, the Trustee of the Trust is authorized, with
respect to such part of the principal thereof, in his sole and nonreviewable
discretion, in each such case: (1) to pay over and distribute such part to a
custodian for such minor designated under an applicable UNIFORM GIFTS TO MINORS
ACT or UNIFORM TRANSFERS TO MINORS ACT, until age twenty-one (21), and the
receipt of such custodian shall constitute a complete discharge of the Trustee's
responsibility for the administration of such part; or (2) to hold, administer,
invest and reinvest such part for such minor's benefit during his or her
minority, and to pay or apply to or for the benefit of such minor, so much, all
or none of the net income and principal of said part as the Trustee, in his sole
and nonreviewable discretion, shall deem advisable to provide for the care,
maintenance, support and education (including, but not limited to, elementary,
secondary, undergraduate, graduate and postgraduate education) of such minor, as
well as for any expenses incurred by or for him or her because of any illness,
operation, infirmity, emergency, or for such other purposes, irrespective of
cause or need, as the Trustee, in his sole and nonreviewable discretion, shall
deem to be in the best interest of such minor, and to accumulate for the benefit
of such minor any such income not so applied or paid. The authority granted to
the Trustee hereunder shall be in addition to, and not in lieu of, any other
alternative available to him with respect to the administration and distribution
of such part of the principal of the trust, and it shall be construed as a power
only and shall not operate to suspend the absolute ownership of such part, or of
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such accumulations of income, if any, of such minor, nor shall it prevent the
absolute vesting thereof in such minor.
(B) Whenever, pursuant to any provisions of
this agreement, the Trustee is authorized to pay or to apply any income or
principal to or for the benefit of a minor, the Trustee may, in his sole and
nonreviewable discretion, make such payment or application by expending the same
directly for the benefit of such minor, or by paying the amount so to be paid or
applied to the parent or legal guardian of such minor, or to the person with
whom such minor may reside, or to a person standing in loco parentis to such
minor, or to a custodian for such minor designated under an applicable UNIFORM
GIFTS TO MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT, until age twenty-one
(21), or directly to such minor, or otherwise, as the Trustee may, from time to
time, deem expedient, and the receipt of such minor of such other payee shall be
a full acquittance to the Trustee to the extent of such payments.
(C) Any income which the Trustee is authorized
to pay to any adult person, pursuant to this agreement, may be applied by the
Trustee, in his discretion, for the benefit of such person.
(D) The Trustee, in his capacity hereunder,
and any person or persons to whom the Trustee is authorized hereunder to pay
over and distribute a part of the principal of the trust created hereunder, or
to pay income for the benefit of a minor, shall serve without bond; and he shall
not be required to qualify as a guardian of any minor for whom property is held
or income paid pursuant to the provisions of this Article.
FOURTH: Except with respect to those powers the exercise of which
would conflict with Section 2702(b)(1) of the Code, in the administration of the
trust created hereunder, the Trustee shall have the following powers, which in
each and every instance may be exercisable by him at such times (if at all), in
such manner, and in accordance with such criteria, as he, in his sole
discretion, shall deem appropriate;
(a) To retain any investment and property
which may be received by him for such length of time as to him may seem proper,
without liability by reason of such retention.
(b) To make such investments and reinvestments
of principal and accumulated income as she may consider proper, without
limitation to what are known as legal or trust investments. Any such investments
may be held in bearer form, or in the name of the Trustee, or in the name of a
nominee or nominees.
(c) To retain cash or the proceeds from the
sale of any assets until such time or times as he deems it appropriate to invest
such funds.
(d) With respect to any securities forming
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<PAGE>
part of the trust created hereunder: To exercise all voting rights, either in
person or by proxy; to exercise conversion, subscription, option and similar
rights; to enter or refuse to enter into any dissolution, liquidation,
consolidation, recapitalization, reorganization, sale of assets, merger or other
change in capital structure, and in connection therewith, to make exchanges of
securities and to enter into agreements on such terms and conditions as he may
deem advisable; and to enter into voting trusts and agreements with other
stockholders, and other holders of securities, and the corporations which shall
have issued such stock or securities, or any one or more of such persons, for
such purposes and for such period of time (whether or not the same extends
beyond the actual or probable duration of the trust created hereunder), and upon
such terms and conditions as he shall deem advisable.
(e) To enter into any lease or leases, without
application to any court, of any or all real or personal property held
hereunder, for such period (whether or not the same expires prior to or extends
beyond the actual or probable duration of the trust created hereunder), and upon
such terms and conditions as he shall deem advisable.
(f) To borrow money or property, either upon
the security of any or all of the assets of the trust created hereunder, or
without security or otherwise, upon such terms and conditions and for such
purposes in connection with the administration of the trust as to him shall seem
proper.
(g) To grant, bargain, sell, exchange,
mortgage, grant options to buy, sell or lease, or otherwise dispose of any or
all real or personal property, or both, at any time held hereunder, and/or any
interest in any business which may come into his hands as part of the trust
created hereunder, either at public or pCHRISTINAte sale, for cash or on credit,
or partly for cash and partly on credit, for such period and upon such terms and
conditions, in such manner and for such purposes, and either in whole or in
part, as he may deem proper; and to make, execute, acknowledge and deliver good
and sufficient instruments for that purpose; PROVIDED, HOWEVER, that in no event
shall such sale or disposition be for less than an adequate consideration in
money or moneys worth. No purchaser, upon any sale or other disposition, shall
be bound to see to the application of the money or property arising therefrom or
to inquire into the validity, expediency or propriety of any such sale or
disposition.
(h) To maintain and insure all real and
personal property, and to develop, repair, remodel, alter, build on, improve,
rebuild or reconstruct any or all real property, either by building,
constructing or erecting new buildings or by repairing, remodeling, altering,
rebuilding or reconstructing existing buildings, for such purposes, to any and
every extent, and in such manner as he may deem proper, and to borrow moneys in
connection therewith upon the security of any such real property and/or of any
or all other assets of the trust created hereunder.
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(i) To foreclose any mortgage or mortgages,
and to take title to the property or any part thereof affected by such mortgage,
or, in his discretion, to accept a conveyance of any property in lieu of
foreclosure, and to collect the rents and income therefrom, either through a
receiver or directly and to protect such property against foreclosure under any
mortgage that shall be a prior lien on said property, or to redeem from
foreclosure under any such mortgages, as well as to protect such property
against nonpayment of taxes, assessments or other liens.
(j) To adjust, compromise or arbitrate claims
or demands of, or against, the trust created hereunder, whether such claims are
due or shall become due in the future, including, without limitation, any
overpayment or refund claim, or any deficiency, additional assessment or other
liability, relating to any Federal, state, county, municipal or other tax
irrespective of the nature thereof.
(k) To join with any other person, persons,
nominee or nominees in the incorporation of any and all corporations for such
purposes, for such periods of time, and upon such terms and conditions
respecting the organization, operation and maintenance thereof (including, but
not by way of limitation, the adoption of by-laws, rules and regulations) as he
shall deem advisable, and to pay for the stock of the such corporation with any
or all of the assets of the trust created hereunder, and to contribute to the
capital of such corporation, or to lend to it, any or all of the assets of the
trust created hereunder.
(l) To join with any other person, persons,
nominee or nominees in any partnership, whether general or limited, or in any
joint venture or other business association, for such purposes, for such period
of time, and upon such terms and conditions, as he shall deem advisable, and to
contribute to the capital of any such partnership, joint venture or other
business association, or to lend to it any of all of the assets of the trust
created hereunder.
(m) To grant options and execute option
agreements with respect to the sale or lease of property held by him hereunder,
without obligation to repudiate the same in favor of better offers.
(n) To assign one or more shares of the stock
of any corporation which may at an time be held by her hereunder to herself or
to a nominee or nominees, for the purpose of qualifying such person to act as a
director of the corporation, the stock of which is so assigned.
(o) To engage such attorneys, clerks,
employees, agents, accountants, brokers, investment counsel, officers,
architects, contractors, subcontractors, surveyors and such other individuals,
firms or corporations, as he shall deem necessary or helpful in connection with
the administration of the trust created hereunder, at such wages, fees,
compensation,
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remuneration, commission rates, prices, consideration or otherwise, and upon
such terms and conditions, as he shall deem proper, including, without
limitation, the right to deposit with them any property of the trust created
hereunder, and to delegate to any of them discretionary and other powers and
authority. Such compensation shall in no event be deducted from any commissions
or other compensation payable to the Trustee.
(p) In any case where the applicable law is
unclear or uncertain, to allocate to income or to principal, or to apportion
between income and principal, receipts, disbursements, depletion and
depreciation in such manner as he shall deem proper.
(q) To execute and deliver all documents,
contracts and instruments necessary or advisable in connection with the
administration of the trust created hereunder.
(r) To make and retain joint investments and
investments of undivided interests in any property, real or personal, whether or
not all the property is held hereunder, and whether or not the provisions under
which such other property is held are similar, and to administer, or to permit
to be administered, all or any part of such property in one or more consolidated
funds in which the same shall have joint or undivided interests without any
physical division of the investments, or to hold and administer any property in
a common trust fund administered by any acting corporate trustee.
(s) To purchase any improved or unimproved
real property, at public or private sale, for cash or on credit, or partly
for cash and partly on credit, and/or subject to any existing mortgage or
mortgages, for such purposes and upon such terms and conditions as he shall deem
advisable.
(t) To make any loans, in such amounts, upon
such terms, and to such persons (other than the Grantor), firms or corporations,
as may be deemed advisable.
(u) To continue to hold and administer the
interest in any business of which the Grantor may be the owner, whether such
ownership be as an individual, partner, joint venturer, or stock holder, or
otherwise, or to engage in and operate any business, for such purposes, in such
manner, and for such period of time, as he shall deem proper, and to apply to
the conduct of any such business any or all of the assets of the trust created
hereunder.
(v) To dissolve or to participate in the
dissolution of any partnership or limited liability company in which the Grantor
shall have an interest or in which the Trustee, in the administration of the
trust created hereunder, shall hold an interest, or of which he shall become a
member, whether such dissolution be by agreement, operation of law, or by the
judgment of any court, and to enter into any agreements with respect thereto,
upon such terms and conditions as he shall deem proper.
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(w) To buy, sell and trade in securities of
any nature, including short sales, on margin, and for such purposes to maintain
and operate margin accounts with brokers, and to pledge any securities held or
purchased by him with such brokers as security for loans and advances made to
him.
FIFTH: Except with respect to those powers the exercise of which
would conflict with Section 2702(b)(1) of the Code in the administration of the
trust created hereunder, the Grantor directs that:
(A) In any case in which the Trustee is
required or authorized in his discretion to divide the trust created hereunder,
or any portion thereof, into parts or shares, and/or is required to distribute
the same, or any portion thereof, or any part or share into which the same shall
have been divided, either to a single distributee, or to two (2) or more
distributees, he, in his sole discretion, may make such partition, division or
distribution wholly in kind or in money, or partly in kind or in money; and may
distribute different property interests having varying income tax bases to the
several distributees, and the choice and relative value of the property or money
so distributed, partitioned or divided shall, in the absence of fraud or bad
faith, be binding and conclusive on everyone interested therein, and he shall in
no event be accountable for any error of judgment or discretion in exercising
the power and authority herein conferred.
(B) Any individual Trustee acting hereunder
shall not be accountable for any loss which may occur to the trust herein
created as a result of the exercise of, or the refusal to exercise, any of the
powers or discretions vested in the Trustee unless such losses shall result from
bad faith or fraud on the part of the Trustee.
(C) No loss whatever resulting to the trust
created hereunder, through the ownership or operation of any business by the
Trustee, or as a result of the building, construction or erection by her of any
building, improvements or structures, whether the same be carried on by a
corporation, partnership, proprietorship, or otherwise, shall be chargeable
against any individual Trustee personally.
(D) In each and every instance where the
Trustee has the discretion to pay all or any part of the income and/or principal
of the trust created hereunder, to any beneficiary, or to apply the same for his
or her benefit, the Trustee may take into consideration, but shall not be
required to do so, any other income or property which may be available to such
beneficiary, including the support which a spouse or parent does provide, or is
obligated to provide.
(E) All the powers granted herein to the
Trustee are in addition to the powers granted to him by operation of law.
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(F) The Trustee may consult with counsel and
shall be fully protected in any course of conduct taken in good faith in
accordance with the advice of counsel.
(G) The Trustee may exercise all of the power
and authority conferred upon him herein with respect to all property held under
a power in trust.
(H) No Trustee shall be disqualified from
acting hereunder or from exercising any power granted herein because he may hold
an interest in property in which the trust created hereunder shall also hold an
interest, or be a creditor of the trust, or be an employee or agent of, or the
holder of an interest in, any business, sole proprietorship, partnership, joint
venture, association, corporation, or otherwise in which the trust created
hereunder may hold an interest, or by reason of the fact that she may also be
serving as an executrix of the Grantor's estate or the trustee of any trust
established under the Grantor's Last Will and Testament.
The Trustee may be employed and/or engaged, in any capacity,
or render services to the trust created hereunder, and/or may be employed and/or
engaged by any corporation, partnership, joint venture, association, sole
proprietorship or other entity in which the trust may have an interest, and he
shall be entitled to receive and to retain (in addition to his remuneration for
services as a Trustee hereunder) such compensation, perquisites and
reimbursements of expenses in connection with such services, payable in such
manner, and upon such terms and conditions, as he, in his discretion, shall deem
proper.
The Trustee is further authorized, notwithstanding any
provision of law to the contrary in acting on behalf of the trust created
hereunder, or on behalf of any corporation, trust, partnership, joint venture,
association, sole proprietorship, or other entity in which the trust created
hereunder shall have an interest, to deal and have transactions of every kind or
nature, either with herself or with any corporation, estate, trust, partnership,
joint venture, association, sole proprietorship, or other entity in which he may
have an interest, either personally or as a fiduciary, and either directly or
indirectly, upon such terms and conditions as he, in his discretion, shall deem
advisable, including, if appropriate, provision for a reasonable profit from
such transactions; and any and all such transactions or dealings shall be proper
and valid if made in good faith, and shall be fully binding upon the trust
created hereunder, notwithstanding any such interest on his part, and under no
circumstances hall there arise any presumption of fraud or other impropriety on
the part of the Trustee in relation to any such transactions or dealings.
(I) If any individual Trustee acting hereunder
shall become "incapacitated", as that term is defined in the immediately
succeeding Subarticle of this Article, he shall immediately cease to be a
Trustee hereunder and such Trustee shall be treated as if he had resigned on the
date that such Trustee
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shall have become incapacitated.
(J) An individual Trustee acting hereunder
shall be deemed to be "incapacitated" at such time as there shall
be:
(1) A currently applicable court order
holding such individual to be legally incapacitated to act on her
own behalf or appointing a conservator or guardian to act for such
individual, or
(2) Duly executed, witnessed, and
acknowledged written certificates of two doctors of medicine who are licensed to
practice medicine in any state of the United States (when such certificates are
in the possession of any successor Trustee designated under, or pursuant to, the
provisions of this Agreement, or if none, in the possession of one or more
persons to whom, or for whose benefit the income of the trust created hereunder
is then to be paid or applied, or in the discretion of the Trustee, may be so
paid or applied), each such certificate stating that such doctor has examined
such individual and has concluded that such individual was, at the date thereof,
incapacitated, either physically or mentally, such that he was unable to manage
his affairs with judgment and reason.
SIXTH: The Trustee hereby expressly undertakes and assumes the trust
hereby created and agrees to carry out the provisions of this trust agreement.
Any successor Trustee shall qualify by exercising an instrument in writing, duly
acknowledged, by which he, she or it expressly agrees to assume the trust
created hereunder and to carry out the provisions hereof.
SEVENTH: Whenever in this agreement the word "Trustee" is used, it
shall be construed to include the Trustee, any co-Trustees herein or hereafter
designated, and their successor or successors in office, and all reference to
such Trustee shall be construed in the singular or plural, and in such gender as
the sense and circumstances require.
EIGHTH: (A) For all purposes under this trust agreement, whether for
the determination of relationships or otherwise, an adopted child shall be
considered to have an shall be accorded, exactly the same status as a child born
to the adopting parent in lawful wedlock.
(B) Except as provided in Subarticle (A) of
this Article, for all purposes under this trust agreement, whether for the
determination of relationships or otherwise, a child who is born out of wedlock
and whose natural parents do not thereafter marry as of the date any property
hereunder would otherwise devolve to such child, and all issue of such child,
shall not be considered to have, and shall not be accorded, any rights
hereunder, unless such child has been specifically named as a beneficiary in
this agreement.
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NINTH: This Trust instrument and the trust created
hereunder shall be governed by the law of the State of New Jersey.
TENTH: Except as hereinbefore specifically provided in
Article FIRST hereof, this trust agreement may not be altered, amended, revoked
or terminated in any respect whatsoever by anyone.
ELEVENTH: No bond or other security shall be required of
the Trustee, in any jurisdiction in which she may be called upon to act.
TWELFTH: Any Trustee may resign as a Trustee hereunder without prior
approval of any court, by delivering to the Grantor, if living, or if not
living, to each and every adult beneficiary hereunder, a written notice of such
resignation.
THIRTEENTH: (A) The Grantor may during his lifetime, pursuant to a
written instrument executed by him (which he may alter or supersede from time to
time), acknowledged in the same manner as is then required to record deeds of
real estate in the State of New Jersey, and served upon the then acting Trustee
hereunder;
(1) Designate one or more
individuals (other than the Grantor) and/or corporate banking institutions (and
may fix the order in which such individuals and/or corporate banking
institutions shall serve) as co-Trustee or co-Trustees to serve with any then
acting Trustee hereunder and/or as successor Trustees, to succeed any trustee,
in the event he or she shall cease to act as Trustee hereunder for any reason
whatsoever;
(2) Eliminate or change the order of
succession of any successor Trustee or co-Trustee designated herein and/or
hereafter designated pursuant to this Subarticle;
(3) Waive all or any part of the
rights hereinabove in this Subarticle (a) described.
(B) (1) Any provisions of this Agreement to
the contrary notwithstanding, no Trustee hereunder shall have any power or
discretion, or be deemed to be a Trustee, with respect to payments or
applications of income or principal, or allocations of receipts or expenses
between income and principal, to or for the use or benefit of (a) himself or
herself as a beneficiary of any trust created hereunder, or (b) any person whom
said Trustee, in his or her individual capacity, is legally obligated to
support, if such payment, application, or allotment shall constitute a discharge
of any part of such Trustee's legal support obligation.
(2) Any provision of this Agreement to
the contrary notwithstanding, the discretionary power to pay or apply trust
principal to or for the use or benefit of any trust beneficiary shall be
exercised solely by such Trustees other than any Trustee who has a beneficial
interest in the remainder of such
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trust that would cause the exercise of such power to be treated as a gift by
such Trustee for federal gift tax purposes. If at any time there is no Trustee
qualified and acting who does not have such an interest, such powers shall be
exercised by all the Trustees (subject to any other provision of this Agreement
restricting the exercise of such powers) in their sole and absolute discretion,
but solely for the purpose of enabling the beneficiary to maintain his or her
accustomed standard of living and for his or her reasonable support, education,
maintenance, and health.
(C) In the event that E. GERALD KAY shall
cease to act as Trustee hereunder, irrespective of the cause thereof, then the
Grantor's daughter, CHRISTINA KAY, and the Grantor's friend and attorney, KEVIN
M. KILCULLEN, shall act as Successor Co-Trustees in his place and stead.
(D) If and for so long as there shall be two
(2) or more Trustees acting hereunder, then any individual Trustee is
authorized, at any time and from time to time, by revocable power of attorney in
writing filed with all of the other Trustees then acting, to delegate to any one
or more of his or her co-Trustees any duty or power of a ministerial nature. The
revocation of any such delegation shall be in writing and delivered to all of
the other Trustees then acting.
(E) Subsequent to the death of the Grantor,
the then income beneficiary of any trust established hereunder shall have the
right to remove any Co-Trustee acting hereunder by delivering a written
instrument to such Co-Trustee acknowledged in the manner as is then required to
record deeds of real estate in the State of New Jersey; provided, however, that
said right of removal may be exercised by such beneficiary only three (3) times
during such beneficiary's lifetime; and provided further, however, that such
beneficiary must then designate a corporate banking institution or trust company
then having assets under management in excess of ONE BILLION ($1,000,000,000)
DOLLARS to serve as Co-Trustee of such trust if one is not then serving, it
being the Grantor's intention that any Co-Trustee removed pursuant to this
Paragraph (E) shall be replaced by a corporate banking institution or trust
company.
(F) The last acting individual sole Trustee
for whom no designated successor shall be available to act for any reason
whatsoever may, pursuant to a written instrument; executed by him or her during
his or her lifetime (which he or she may alter or supersede from time to time),
acknowledged in the same manner as is then required to record deeds of real
estate in the State of New Jersey or by his or her Last Will and Testament duly
admitted to probate, designate one or more individuals and/or corporate banking
institutions (and may fix the order in which such individuals and/or corporate
banking institutions shall serve) as co-Trustee or co-Trustees, to serve with
such sole individual Trustee, and/or as successor Trustee or Trustees, to
succeed such sole individual Trustee, in the event he or she shall cease to act
as Trustee hereunder, for any reason whatsoever.
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FOURTEENTH: The Grantor intends to create a "Grantor Retained
Annuity Trust" as described in Section 2702(b)(1) of the Code. Accordingly,
notwithstanding anything hereinbefore contained, all of the terms, powers,
rights, privileges, etc. of the E. GERALD KAY ANNUITY TRUST II created hereunder
shall be interpreted, valued, managed and administered in manner consistent with
the Grantor's intent that this trust qualify for treatment as a "Grantor
Retained Annuity Trust" (as hereinbefore defined). To the extent that any
provision of the E. GERALD KAY ANNUITY TRUST II requires amendment to qualify
said trust as a "Grantor Retained Annuity Trust" (as hereinbefore
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defined), then, to such limited extent, the Trustee shall have the right to
amend said trust.
IN WITNESS WHEREOF, the Grantor and Trustee have
hereunder set their hands and seals the day and year first above
written.
WITNESS:
/S/Tracy Daniel /S/E. Gerald Kay (L.S.)
- --------------- ----------------
E. GERALD KAY, Grantor
/S/Tracy Daniel /S/E. Gerald Kay (L.S.)
- --------------- ----------------
E. GERALD KAY, Trustee
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SCHEDULE A
100,000 shares of Chem International Restricted Common
Stock
<PAGE>
STATE OF NEW JERSEY )
)
COUNTY OF MORRIS )
BE IT REMEMBERED, that on this 16th day of April, 1998 before me,
the subscriber, personally appeared E. GERALD KAY who, I am satisfied, is the
Grantor and Trustee mentioned in the within instrument, to whom I first made
known the contents thereof, and thereupon he acknowledged that he signed, sealed
and delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed.
/S/ Kevin M. Kilcullen
--- ------------------
Kevin M. Kilcullen
Attorney at law
State of New Jersey
<PAGE>
A G R E E M E N T
By and Between,
RIVA KAY, Grantor,
-and-
E. GERALD KAY, Trustee,
---------------------------------
DATED: June 4, 1998
---------------------------------
SHANLEY & FISHER, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
(201) 285-1000
<PAGE>
RIVA KAY GRANTOR TRUST
T H I S A G R E E M E N T, made this 4th day of June, 1998, by and
between RIVA KAY, residing in New York, New York, as Grantor (hereinafter
referred to as the "Grantor"), and E. GERALD KAY, residing at Isabella Place,
Glenn Rock, New Jersey, as Trustee (together with any other fiduciaries serving
hereunder being hereinafter referred to as the "Trustees"):
W I T N E S S E T H:
WHEREAS, the Grantor is desirous of relieving herself of
the administration of the property described in SCHEDULE A annexed hereto;
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the Grantor has herewith delivered, and does hereby
grant, convey, assign and set over to the Trustees, the property described in
SCHEDULE A annexed hereto, IN TRUST, NEVERTHELESS, for the following uses and
purposes:
FIRST: GRANTOR'S LIFETIME. The Trustees shall hold the said
trust fund, including any other cash, securities or other property, real,
personal or mixed, at any time forming a part of this trust (hereinafter
sometimes referred to as the "RIVA KAY GRANTOR TRUST"), and shall collect and
receive the income thereof, and shall apply, pay over and distribute such income
and principal as hereinafter provided:
(A) Until the termination of the trust, as hereinafter
provided in Subarticle (C) of this Article, the Trustees shall pay over and
distribute the net income of the trust to or for the benefit of the Grantor, at
convenient intervals, but not less
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frequently then annually.
(B) Until the termination of the trust, as hereinafter provided in
Subarticle (C) of this Article, the Trustees, at any time or times that they
deem it advisable, may pay or apply to or for the benefit of the Grantor such
sum or sums out of the principal of the RIVA KAY GRANTOR TRUST, as the Trustees,
in their sole and nonreviewable discretion, shall deem advisable to provide for
the care, maintenance, support and education (including, but not limited to,
elementary, secondary, undergraduate graduate and postgraduate education), of
the Grantor, as well as for any expenses incurred by or for the Grantor because
of any illness, operation, infirmity, emergency, or for such other purposes,
irrespective of cause or need, as the Trustees, in their sole and nonreviewable
discretion, shall deem to be in the best interests of the Grantor.
(C) The Trust created hereunder shall terminate upon the earliest
of the following events:
(1) The attainment of the age of forty-three (43) years
by the Grantor;
(2) The death of the Grantor's father, E. GERALD KAY; or
(3) The death of the Grantor.
(D) Upon the termination of the RIVA KAY GRANTOR TRUST, the Trustees
are directed to make the following distributions:
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(1) If the Grantor is then living, the Trustees shall pay
over and distribute the entire then remaining principal and undistributed income
of the trust fund to the Grantor.
(2) If the Grantor is not then living, the Trustees shall
pay over and distribute the entire then remaining principal and undistributed
income of the trust fund to the then living issue of the Grantor, per stirpes;
and in default of such issue, the same shall be paid over and distributed to the
then living issue of the Grantor's parents, per stirpes. In default of such
issue of the Grantor's parents the same shall be paid over and distributed to
those persons who would take, and in such shares as they would take, under the
laws of intestate succession of the State of New Jersey, from the estate of the
Grantor, as if the Grantor had died on the date of the termination of the trust
and the Grantor's entire estate had consisted of the principal of the trust
fund.
SECOND: ADDITIONS TO TRUST. The Trustees, at any time, and from time
to time, may receive and accept from the Grantor and/or the personal
representatives of the Grantor, and/or from any other person or persons, any
additions to any trust fund created hereunder, in the form of cash, stock,
securities or other property, real, personal or mixed. Any and all such
additions shall be administered as part of said trust fund and subject to the
terms and conditions of this trust agreement.
THIRD: MINOR'S CLAUSE. (A) Should any part of any
trust created hereunder, vest in absolute ownership in any minor, the Trustees
of such trust are authorized, with respect to such part of the principal
thereof, in their sole and nonreviewable discretion, in each such case; (l) to
pay over and distribute such part to a custodian for such minor designated under
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an applicable UNIFORM GIFTS TO MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT,
and the receipt of such custodian shall constitute a complete discharge of the
Trustees' responsibility for the administration of such part; or (2) to hold,
administer, invest and reinvest such part for such minor's benefit during his or
her minority, and to pay or apply to or for the benefit of such minor, so much,
all or none of the net income and principal of said part as the Trustees, in
their sole and nonreviewable discretion, shall deem advisable to provide for the
care, maintenance, support and education (including, but not limited to,
elementary, secondary, undergraduate, graduate and postgraduate education) of
such minor, as well as for any expenses incurred by or for him or her because of
any illness, operation, infirmity, emergency, or for such other purposes,
irrespective of cause or need, as the Trustees, in their sole and nonreviewable
discretion, shall deem to be in the best interests of such minor, and to
accumulate for the benefit of such minor any such income not so applied or paid.
The authority granted to the Trustees hereunder shall be in addition to, and not
in lieu of, any other alternative available to them with respect to the
administration and distribution of such part of the principal of such trust, and
it shall be construed as a power only and shall not operate to suspend the
absolute ownership of such part, or of such accumulations of income, if any, of
such minor, nor shall it prevent the absolute vesting thereof in such minor.
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(B) Whenever, pursuant to any provisions of this Agreement, the
Trustees are authorized to pay or to apply any income or principal to or for the
benefit of a minor, the Trustees may, in their sole and nonreviewable
discretion, make such payment or application by expending the same directly for
the benefit of such minor, or by paying the amount so to be paid or applied to
the parent or legal guardian of such minor, or to the person with whom such
minor may reside, or to a person standing in loco parentis to such minor, or to
a custodian for such minor designated under an applicable UNIFORM GIFTS TO
MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT, or directly to such minor, or
otherwise, as the Trustees may, from time to time, deem expedient, and the
receipt of such minor or such other payee shall be a full acquittance to the
Trustees to the extent of such payments.
(C) Any income which the Trustees are authorized to pay to any
adult person pursuant to this Agreement, may be applied by the Trustees, in
their discretion, for the benefit of such person.
(D) The Trustees, in their capacity hereunder, and any person or
persons to whom the Trustees are authorized hereunder to pay over and distribute
a part of the principal of any trust created hereunder, or to pay income for the
benefit of a minor, shall serve without bond; and they shall not be required to
qualify as a guardian of either the person or property of any minor for whom
property is held or income paid pursuant to the provisions of this Article.
FOURTH: FIDUCIARY POWERS. In the administration of any trust created
hereunder, the Trustees shall have the following powers, which in each and every
instance may be exercisable by them at such times (if at all), in such manner,
and in accordance with such criteria, as they, in their sole discretion, shall
deem appropriate. It is the Grantor's intention that such powers shall include
the following and shall be construed in the broadest possible manner.
(1) To retain any investment and property which may be received by
them for such length of time as may seem proper, without liability by
reason of such retention and without limitation as to the length of
such time. It is specifically acknowledged that the trustee shall hold
the shares of stock of Chem International, Inc., and the ownership
interests in Gerob Associates, L.P., and Vitamin Realty Associates,
L.L.C. (collectively referred to as the "Business Interests").
(2) To make such investments and reinvestments of principal and
accumulated income as they may consider proper, without limitation to
what are known as legal or trust investments. Any such investments may
be held in bearer form, or in the name of the Trustees, or in the name
of a nominee or nominees.
(3) To retain cash or the proceeds from the sale of any assets until
such time or times as they deem it appropriate to invest such funds.
(4) To enter into any lease or leases, without application to any
5
<PAGE>
court, of any or all real or personal property held hereunder, for
such period (whether or not the same expires prior to or extends
beyond the actual or probable duration of any trust created
hereunder), and upon such terms and conditions as they shall deem
advisable.
(5) To borrow money or property, either upon the security of any or
all of the assets of any trust created hereunder, or without security
or otherwise, upon such terms and conditions and for such purposes in
connection with the administration of such trust as to them shall seem
proper; PROVIDED, HOWEVER, no pledge of the Business Interests may be
made without the prior written consent of the Grantor.
(6) To grant, bargain, sell, exchange, mortgage, grant options to buy,
or otherwise dispose of any or all real property, at any time held
hereunder, and/or any interest in any business which may come into
their hands as part of any trust created hereunder, either at public
or private sale, for cash or on credit, or partly for cash and partly
on credit, upon such terms and conditions, in such manner and for such
purposes, and either in whole or in part, as they may deem proper; and
to make, execute, acknowledge and deliver good and sufficient
instruments for that purpose; PROVIDED, HOWEVER, that in no event
shall such sale or disposition be for less than an adequate
consideration in money or moneys worth. No purchaser, upon any sale or
other disposition, shall be bound to see to the application of the
moneys or property arising therefrom or to inquire into the validity,
expediency or propriety of any such sale or disposition.
(7) To maintain and insure all real and personal property, and to
develop, repair, remodel, alter, build on, improve, rebuild or
reconstruct any or all real property, either by building, constructing
or erecting new buildings or by repairing, remodeling, altering,
rebuilding or reconstructing existing buildings, for such purposes, to
any and every extent, and in such manner as they may deem proper, and
to borrow moneys in connection therewith upon the security of any such
real property and/o of any or all other assets of any trust created
hereunder; PROVIDED, HOWEVER, no pledge of the Business Interests may
be made without the prior written consent of the Grantor.
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<PAGE>
(8) To foreclose any mortgage or mortgages, and to take title to the
property or any part thereof affected by such mortgage, or, in their
discretion, to accept a conveyance of any property in lieu of
foreclosure, and to collect the rents and income therefrom, either
through a receiver or directly and to protect such property against
foreclosure under any mortgage that shall be a prior lien on said
property, or to redeem from foreclosure under any such mortgages, as
well as to protect such property against nonpayment of taxes,
assessments or other liens.
(9) To adjust, compromise or arbitrate claims or demands of, or
against, any trust created hereunder, whether such claims are due or
shall become due in the future, including without limitation any
overpayment or refund claim, or any deficiency, additional assessment
or other liability, relating to any Federal, state, county, municipal
or other tax irrespective of the nature thereof.
(10) To grant options and execute option agreements with respect to
the sale or lease of real property held by them hereunder, without
obligation to repudiate the same in favor of better offers.
(11) To engage such attorneys, clerks, employees, agents, accountants,
brokers, investment counsel, officers, architects, contractors,
subcontractors, surveyors and such other individuals, firms or
corporations, as they shall deem necessary or helpful in connection
with the administration of any trust created hereunder, at such wages,
fees, compensation, remuneration, commission rates, prices,
consideration or otherwise, and upon such terms and conditions, as
they shall deem proper, including without limitation the right to
deposit with them any property of any trust created hereunder, and to
delegate to any of them discretionary and other powers and authority.
Such compensation shall in no event be deducted from any commissions
or other compensation payable to the Trustees.
(12) In any case where the applicable law is unclear or uncertain, to
allocate to income or to principal, or to apportion between income and
principal, receipts, disbursements, depletion and depreciation in such
manner as they shall deem proper.
(13) To execute and deliver all documents, contracts and instruments
necessary or advisable in connection with the administration of any
trusts created hereunder.
(14) To purchase any improved or unimproved real property, at public
or private sale, for cash or on credit, or partly for cash and partly
on credit, and/or subject to an existing mortgage or mortgages, for
such purposes and upon such terms and conditions as they shall deem
advisable.
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<PAGE>
(15) To continue to hold and administer the interest in any business
of which the Grantor may be the owner, whether such ownership be as an
individual, partner, joint venturer, or stockholder, or otherwise, or
to engage in and operate any business, for such purposes, in such
manner, and for such period of time, as they shall deem proper, and to
apply to the conduct of any such business any or all of the assets of
any trust created hereunder.
(16) To dissolve or to participate in the dissolution of any
partnership in which the Grantor shall have an interest or in which
the Trustees, in the administration of any trust created hereunder,
shall hold an interest, or of which they shall become a member,
whether such dissolution is by agreement, by operation of law, or by
the judgment of any court, and to enter into any agreements with
respect thereto, upon such terms and conditions as they shall deem
proper.
(17) To buy, sell and trade in securities of any nature, including
short sales, on margin, and for such purposes to maintain and operate
margin accounts with brokers, and to pledge any securities held or
purchased by them with such brokers as security for loans and advances
made to them; PROVIDED, HOWEVER, it is the Grantor's general intent
that any investments, other than the Business Interests, be invested
in a balanced portfolio of high grade debt and equity investments in
publicly-held securities readily tradable on an established securities
market; PROVIDED FURTHER, HOWEVER, no disposition of the Chem
International, Inc. stock then held as an asset of this trust may be
made without the prior written consent of the Grantor.
FIFTH: FIDUCIARY LIABILITY. In the administration of any trust
created hereunder, the Grantor directs that:
(A) In any case in which the Trustees are required to divide any
trust created hereunder, or any portion thereof, into parts or shares, and/or is
required to distribute the same, or any portion thereof, or any part or share
into which the same shall have been divided, either to a single distributee, or
to two (2) or more distributees, they, in their sole discretion, may make such
partition, division or distribution wholly in kind or in money, or partly in
kind or in money, and may distribute different property interests having varying
income tax bases to the several distributees, and the choice and relative value
of the property or money so distributed, partitioned or divided shall, in the
absence of fraud or bad faith, be binding and conclusive on everyone interested
therein, and they shall not be accountable for any error of judgment or
discretion in exercising the power and authority herein conferred.
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<PAGE>
(B) The Trustees shall not be accountable for any loss which may
occur to any trust herein created as a result of the exercise of, or the refusal
to exercise, any of the powers or discretions vested in them unless such losses
shall result from bad faith or fraud on the part of the Trustees.
(C) No loss whatever resulting to any trust created hereunder,
through the ownership or operation of any business by the Trustees, or as a
result of the building, construction or erection by him of any building,
improvements or structures, whether the same be carried on by a corporation,
partnership, proprietorship, or otherwise, shall be chargeable against the
Trustees personally.
(D) In each and every instance where the Trustees have the
discretion to pay all or any part of the income and/or principal of any trust
created hereunder, to any beneficiary, or to apply the same for his or her
benefit, the Trustees may take into consideration, but shall not be required to
do so, any other income or property which may be available to such beneficiary,
including the support which a husband or parent does provide, or is obligated to
provide.
(E) All the powers granted herein to the Trustees are in addition
to the powers granted to them by operation of law.
(F) The Trustees may consult with counsel and shall be fully
protected in any course of conduct taken in good faith in accordance with the
advice of counsel.
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(G) The Trustees may exercise all of the power and authority
conferred upon them herein with respect to all property held under a power in
trust.
(H) No Trustee shall be disqualified from acting hereunder or from
exercising any power granted herein because they may hold an interest in
property in which any trust created hereunder shall also hold an interest, or be
a creditor of any such trust, or be an employee or agent of, or the holder of
any interest in, any business, sole proprietorship, joint venture, partnership,
association, corporation, or otherwise in which any trust created hereunder may
hold an interest, or by reason of the fact that they may also be serving as an
executor of the Grantor's estate or the trustee of any trust established under
the Grantor's Last Will and Testament.
The Trustees may be employed and/or engaged, in any capacity, or
render services to any trust created hereunder, and/or may be employed and/or
engaged by any corporation, partnership, joint venture, association, sole
proprietorship, or other entity in which any such trust may have an interest,
and they shall be entitled to receive and to retain (in addition to their
remuneration for services as Trustees hereunder) such compensation, perquisites
and reimbursements of expenses in connection with such services, payable in such
manner, and upon such terms and conditions, as they, in their discretion, shall
deem proper.
The Trustees are further authorized, notwithstanding any provision
of law to the contrary in acting on behalf of any trust created hereunder, or on
behalf of any corporation, trust, partnership, joint venture, association, sole
proprietorship, or other entity in which any trust created hereunder shall have
an interest, to deal and have transactions of every kind or nature, either with
themselves, or with any corporation, estate, trust, partnership, joint venture,
association, sole proprietorship, or other entity in which they may have an
interest, either personally or as a fiduciary, and either directly or
indirectly, upon such terms and conditions as they, in their discretion, shall
deem advisable and any and all such transactions shall be fully binding upon any
trust created hereunder notwithstanding any such interest on his part, and under
no circumstances shall there arise any presumption of fraud or other impropriety
on the part of the Trustees in relation to any such transactions or dealings.
11
<PAGE>
SIXTH: ACCEPTANCE OF TRUST. The Trustees hereby expressly
undertake and assume any trust hereby created and agrees to carry out the
provisions of this Agreement. Any successor Trustees shall qualify by executing
an instrument in writing, duly acknowledged, by which he, she or it expressly
agrees to assume any trust created hereunder and to carry out the provisions
hereof.
SEVENTH: SPENDTHRIFT CLAUSE. The interest of any beneficiary under
these trusts, either in income or in principal, or in both, shall not be subject
to sale, assignment, pledge or transfer in any manner, and such interest shall
not be liable or subject in any manner while in the possession of the Trustees
for the debts, contracts, obligations, liabilities, engagements, undertakings or
torts of any such beneficiary. No beneficiary shall have the power in any manner
to anticipate, charge or encumber his or her interest, either in income or in
principal, or in both.
EIGHTH: CONSTRUCTION. Whenever in this Agreement the word
"Trustees" is used, it shall be construed to include the Trustees and their
Successor or Successors in office, and all reference to such Trustees shall be
construed in the singular or plural, and in such gender as the sense and
circumstances require.
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<PAGE>
NINTH: IRREVOCABILITY. Except as hereinafter provided in
Subarticle ELEVENTH (A), this Trust may not be terminated, revoked, altered,
amended or changed in any respect whatsoever by anyone.
TENTH: BOND EXEMPTION. No bond or other security shall be
required of the Trustees in any jurisdiction in which they may be called upon to
act.
ELEVENTH: SUCCESSOR TRUSTEES. (A) E. GERALD KAY, while acting as
a Trustee and with the prior written consent of the Grantor, may, by a written
instrument executed by him, at any time, and from time to time, eliminate and/or
add any person or persons as a Co-Trustee, Co-Trustees, successor Trustee or
successor Trustees and/or change the order of succession of any successor
Trustee or Trustees named herein and/or hereafter designated by him.
(B) The last acting individual sole Trustee for whom no designated
Successor Trustee shall be available to act for any reason whatsoever, may, by a
written instrument executed by him or her during his or her lifetime (which he
or she may alter or supersede from time to time), acknowledged in the same
manner as is then required to record deeds of real estate in the State of New
Jersey, or by his or her Last Will and Testament duly admitted to probate,
designate one or more individuals and/or corporate banking institutions (and may
fix the order in which such individuals and/or corporate banking institutions
shall serve) as Successor Trustee or Successor Trustees, to succeed such sole
Trustee in the event that he or she shall cease to act as Trustee hereunder for
any reason whatsoever.
TWELFTH: RESIGNATION. The Trustees, or Successor Trustees, shall
have the right to resign at any time by delivery of notice in writing to the
Grantor.
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THIRTEENTH: TAX CLAUSE. If any executor, administrator, or other
person acting in a fiduciary capacity for the estate of the Grantor has paid
death taxes levied or assessed under the provisions of any State and/or Federal
inheritance or succession tax or estate tax laws now existing or hereafter
enacted, and if under the provisions of any such law any or all of the trust
property is required to be included in the gross estate of the Grantor, the
Trustees are directed to reimburse such executor, administrator, or other person
acting in a fiduciary capacity for that proportionate part of the inheritance,
succession, estate and/or death taxes, including interest and penalties thereon,
paid by reason of the inclusion of the trust property in the gross estate of the
Grantor. The Trustees shall be entitled to rely conclusively upon the
determination of such executor, administrator, or other person acting in a
fiduciary capacity, as to the necessity for the inclusion of any or all of the
trust property in the gross estate of the Grantor, and as to the determination
of the proportionate part of such taxes, interest and penalties payable by
reason of such inclusion.
FOURTEENTH: GRANTOR TRUST. This shall be a Grantor trust for
Federal and New York tax purposes, but shall be governed by, and interpreted in
accordance with, the laws of the State of New Jersey.
FIFTEENTH: RELATIONSHIPS. For all purposes under this instrument,
whether for the determination of relationships or otherwise, adopted children,
whether of the Grantor or of any other person, shall be considered to have, and
shall be accorded, exactly the same status as children born to the adopting
parent in lawful wedlock.
IN WITNESS WHEREOF, the Grantor and Trustees have hereunto set
their hands and seals the day and year first above written. Signed, Sealed and
Delivered
In the Presence of:
/s/ Kevin M. Kilcullen /s/ Riva Kay (L.S.)
- ---------------------- ------------------
RIVA KAY, Grantor
/s/ Kevin M. Kilcullen /s/ E. Gerald Kay (L.S.)
- ---------------------------- -----------------
E. GERALD KAY, Trustee
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SCHEDULE A
List of Assets
$10 cash
<PAGE>
STATE OF NEW JERSEY )
: SS.:
COUNTY OF UNION )
BE IT REMEMBERED, that on this 4TH day of June, 1998, before me, the
subscriber, personally appeared E. GERALD KAY, who, I am satisfied, is the
Trustee mentioned in the within instrument, to whom I first made known the
contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein expressed.
/s/ Kevin M. Kilcullen
----------------------
KEVIN M. KILCULLEN
Attorney at Law
State of New Jersey
<PAGE>
STATE OF NEW JERSEY )
: SS.:
COUNTY OF UNION )
BE IT REMEMBERED, that on this 4TH day of June, 1998, before me, the
subscriber, personally appeared RIVA KAY, who, I am satisfied, is the Grantor
mentioned in the within instrument, to whom I first made known the contents
thereof, and thereupon she acknowledged that she signed, sealed and delivered
the same as her voluntary act and deed, for the uses and purposes therein
expressed.
/s/ Kevin M. Kilcullen
----------------------
KEVIN M. KILCULLEN
Attorney at Law
State of New Jersey
<PAGE>
A G R E E M E N T
By and Between,
CHRISTINA KAY, Grantor,
-and-
E. GERALD KAY, Trustee,
---------------------------------
DATED: June 4, 1998
---------------------------------
SHANLEY & FISHER, P.C.
131 Madison Avenue
Morristown, New Jersey 07962-1979
(201) 285-1000
<PAGE>
CHRISTINA KAY GRANTOR TRUST
T H I S A G R E E M E N T, made this 4th day of June, 1998, by and
between CHRISTINA KAY, residing in New York, New York, as Grantor (hereinafter
referred to as the "Grantor"), and E. GERALD KAY, residing at Isabella Place,
Glenn Rock, New Jersey, as Trustee (together with any other fiduciaries serving
hereunder being hereinafter referred to as the "Trustees"):
W I T N E S S E T H:
WHEREAS, the Grantor is desirous of relieving herself of the
administration of the property described in SCHEDULE A annexed hereto;
NOW, THEREFORE, in consideration of the premises and of the
covenants herein contained, the Grantor has herewith delivered, and does hereby
grant, convey, assign and set over to the Trustees, the property described in
SCHEDULE A annexed hereto, IN TRUST, NEVERTHELESS, for the following uses and
purposes:
FIRST: GRANTOR'S LIFETIME. The Trustees shall hold
the said trust fund, including any other cash, securities or other property,
real, personal or mixed, at any time forming a part of this trust (hereinafter
sometimes referred to as the "CHRISTINA KAY GRANTOR TRUST"), and shall collect
and receive the income thereof, and shall apply, pay over and distribute such
income and principal as hereinafter provided:
(A) Until the termination of the trust, as hereinafter provided in
Subarticle (C) of this Article, the Trustees shall pay over and distribute the
net income of the trust to or for the benefit of the Grantor, at convenient
intervals, but not less frequently then annually.
(B) Until the termination of the trust, as hereinafter provided in
Subarticle (C) of this Article, the Trustees, at any time or times that they
deem it advisable, may pay or apply to or for the benefit of the Grantor such
sum or sums out of the principal of the CHRISTINA KAY GRANTOR TRUST, as the
Trustees, in their sole and nonreviewable discretion, shall deem advisable to
provide for the care, maintenance, support and education (including, but not
limited to, elementary, secondary, under graduate, graduate and postgraduate
education), of the Grantor, as well as for any expenses incurred by or for the
Grantor because of any illness, operation, infirmity, emergency, or for such
other purposes, irrespective of cause or need, as the Trustees, in their sole
and nonreviewable discretion, shall deem to be in the best interests of the
Grantor.
(C) The Trust created hereunder shall terminate upon the earliest of
the following events:
(1) The attainment of the age of forty-three (43)
years by the Grantor;
<PAGE>
(2) The death of the Grantor's father, E. GERALD
KAY; or
(3) The death of the Grantor.
(D) Upon the termination of the CHRISTINA KAY GRANTOR TRUST, the
Trustees are directed to make the following dis tributions:
(1) If the Grantor is then living, the Trustees shall pay over
and distribute the entire then remaining principal and undistributed income of
the trust fund to the Grantor.
(2) If the Grantor is not then living, the Trustees shall pay
over and distribute the entire then remaining principal and undistributed income
of the trust fund to the then living issue of the Grantor, per stirpes; and in
default of such issue, the same shall be paid over and distributed to the then
living issue of the Grantor's parents, per stirpes. In default of such issue of
the Grantor's parents the same shall be paid over and distributed to those
persons who would take, and in such shares as they would take, under the laws of
intestate succession of the State of New Jersey, from the estate of the Grantor,
as if the Grantor had died on the date of the termination of the trust and the
Grantor's entire estate had consisted of the principal of the trust fund.
SECOND: ADDITIONS TO TRUST. The Trustees, at any time, and from time
to time, may receive and accept from the Grantor and/or the personal
representatives of the Grantor, and/or from any other person or persons, any
additions to any trust fund created hereunder, in the form of cash, stock,
securities or other property, real, personal or mixed. Any and all such
additions shall be administered as part of said trust fund and subject to the
terms and conditions of this trust agreement.
THIRD: MINOR'S CLAUSE. (A) Should any part of any
trust created hereunder, vest in absolute ownership in any minor, the Trustees
of such trust are authorized, with respect to such part of the principal
thereof, in their sole and nonreviewable discretion, in each such case; (l) to
pay over and distribute such part to a custodian for such minor designated under
an applicable UNIFORM GIFTS TO MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT,
and the receipt of such custodian shall constitute a complete discharge of the
Trustees' responsibility for the administration of such part; or (2) to hold,
administer, invest and reinvest such part for such minor's benefit during his or
her minority, and to pay or apply to or for the benefit of such minor, so much,
all or none of the net income and principal of said part as the Trustees, in
their sole and nonreviewable discretion, shall deem advisable to provide for the
care, maintenance, support and education (including, but not limited to,
elementary, secondary, undergraduate, graduate and postgraduate education) of
such minor, as well as for any expenses incurred by or for him or her because of
any illness, operation, infirmity, emergency, or for such other purposes,
irrespective of cause or need, as the Trustees, in their sole and nonreviewable
discretion, shall deem to be in the best interests of such minor,
2
<PAGE>
and to accumulate for the benefit of such minor any such income not so applied
or paid. The authority granted to the Trustees hereunder shall be in addition
to, and not in lieu of, any other alternative available to them with respect to
the administration and distribution of such part of the principal of such trust,
and it shall be construed as a power only and shall not operate to suspend the
absolute ownership of such part, or of such accumulations of income, if any, of
such minor, nor shall it prevent the absolute vesting thereof in such minor.
(B) Whenever, pursuant to any provisions of this Agreement, the
Trustees are authorized to pay or to apply any in come or principal to or for
the benefit of a minor, the Trustees may, in their sole and nonreviewable
discretion, make such payment or application by expending the same directly for
the benefit of such minor, or by paying the amount so to be paid or applied to
the parent or legal guardian of such minor, or to the person with whom such
minor may reside, or to a person standing in loco parentis to such minor, or to
a custodian for such minor designated under an applicable UNIFORM GIFTS TO
MINORS ACT or UNIFORM TRANSFERS TO MINORS ACT, or directly to such minor, or
otherwise, as the Trustees may, from time to time, deem expedient, and the
receipt of such minor or such other payee shall be a full acquittance to the
Trustees to the extent of such payments.
(C) Any income which the Trustees are authorized to pay to any adult
person pursuant to this Agreement, may be applied by the Trustees, in their
discretion, for the benefit of such person.
(D) The Trustees, in their capacity hereunder, and any person or
persons to whom the Trustees are authorized hereunder to pay over and distribute
a part of the principal of any trust created hereunder, or to pay income for the
benefit of a minor, shall serve without bond; and they shall not be required to
qualify as a guardian of either the person or property of any minor for whom
property is held or income paid pursuant to the provisions of this Article.
FOURTH: FIDUCIARY POWERS. In the administration of any trust created
hereunder, the Trustees shall have the following powers, which in each and every
instance may be exercisable by them at such times (if at all), in such manner,
and in accordance with such criteria, as they, in their sole discretion, shall
deem appropriate. It is the Grantor's intention that such powers shall include
the following and shall be construed in the broadest possible manner.
(1) To retain any investment and property which may be received by
them for such length of time as may seem proper, without liability
by reason of such retention and without limitation as to the length
of such time. It is specifically acknowledged that the trustee shall
hold the shares of stock of Chem International, Inc., and the
ownership interests in Gerob Associates, L.P., and Vitamin Realty
Associates, L.L.C. (collectively referred to as the "Business
Interests").
3
<PAGE>
(2) To make such investments and reinvestments of principal and
accumulated income as they may consider proper, without limitation
to what are known as legal or trust investments. Any such
investments may be held in bearer form, or in the name of the
Trustees, or in the name of a nominee or nominees.
(3) To retain cash or the proceeds from the sale of any assets until
such time or times as they deem it appropriate to invest such funds.
(4) To enter into any lease or leases, without application to any
court, of any or all real or personal property held hereunder, for
such period (whether or not the same expires prior to or extends
beyond the actual or probable duration of any trust created
hereunder), and upon such terms and conditions as they shall deem
advisable.
(5) To borrow money or property, either upon the security of any or
all of the assets of any trust created hereunder, or without
security or otherwise, upon such terms and conditions and for such
purposes in connection with the administration of such trust as to
them shall seem proper; PROVIDED, HOWEVER, no pledge of the Business
Interests may be made without the prior written consent of the
Grantor.
(6) To grant, bargain, sell, exchange, mortgage, grant options to
buy, or otherwise dispose of any or all real property, at any time
held hereunder, and/or any interest in any business which may come
into their hands as part of any trust created hereunder, either at
public or private sale, for cash or on credit, or partly for cash
and partly on credit, upon such terms and conditions, in such manner
and for such purposes, and either in whole or in part, as they may
deem proper; and to make, execute, acknowledge and deliver good and
sufficient instruments for that purpose; PROVIDED, HOWEVER, that in
no event shall such sale or disposition be for less than an adequate
consideration in money or moneys worth. No purchaser, upon any sale
or other disposition, shall be bound to see to the application of
the moneys or property arising therefrom or to inquire into the
validity, expediency or propriety of any such sale or disposition.
(7) To maintain and insure all real and personal property, and to
develop, repair, remodel, alter, build on, improve, rebuild or
reconstruct any or all real property, either by building,
constructing or erecting new buildings or by repairing, remodeling,
altering, rebuilding or reconstructing existing buildings, for such
purposes, to any and every extent, and in such manner as they may
deem proper, and to borrow moneys in connection therewith upon the
security of any such real property and/or of any or all other assets
of any trust created
4
<PAGE>
hereunder; PROVIDED, HOWEVER, no pledge of the Business Interests
may be made without the prior written consent of the Grantor.
(8) To foreclose any mortgage or mortgages, and to take title to the
property or any part thereof affected by such mortgage, or, in their
discretion, to accept a conveyance of any property in lieu of
foreclosure, and to collect the rents and income therefrom, either
through a receiver or directly and to protect such property against
foreclosure under any mortgage that shall be a prior lien on said
property, or to redeem from foreclosure under any such mortgages, as
well as to protect such property against nonpayment of taxes,
assessments or other liens.
(9) To adjust, compromise or arbitrate claims or demands of, or
against, any trust created hereunder, whether such claims are due or
shall become due in the future, including without limitation any
overpayment or refund claim, or any deficiency, additional
assessment or other liability, relating to any Federal, state,
county, municipal or other tax irrespective of the nature thereof.
(10) To grant options and execute option agreements with respect to
the sale or lease of real property held by them hereunder, without
obligation to repudiate the same in favor of better offers.
(11) To engage such attorneys, clerks, employees, agents,
accountants, brokers, investment counsel, officers, ar chitects,
contractors, subcontractors, surveyors and such other individuals,
firms or corporations, as they shall deem necessary or helpful in
connection with the administration of any trust created hereunder,
at such wages, fees, compensation, remuneration, commission rates,
prices, consideration or otherwise, and upon such terms and
conditions, as they shall deem proper, in cluding without limitation
the right to deposit with them any property of any trust created
hereunder, and to delegate to any of them discretionary and other
powers and authority. Such compensation shall in no event be
deducted from any commissions or other compensation payable to the
Trustees.
(12) In any case where the applicable law is unclear or uncertain,
to allocate to income or to principal, or to apportion between
income and principal, receipts, disbursements, depletion and
depreciation in such manner as they shall deem proper.
(13) To execute and deliver all documents, contracts and instruments
necessary or advisable in connection with the administration of any
trusts created hereunder.
(14) To purchase any improved or unimproved real
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property, at public or private sale, for cash or on credit, or
partly for cash and partly on credit, and/or subject to an existing
mortgage or mortgages, for such purposes and upon such terms and
conditions as they shall deem advisable.
(15) To continue to hold and administer the interest in any business
of which the Grantor may be the owner, whether such ownership be as
an individual, partner, joint venturer, or stockholder, or
otherwise, or to engage in and operate any business, for such
purposes, in such manner, and for such period of time, as they shall
deem proper, and to apply to the conduct of any such business any or
all of the assets of any trust created hereunder.
(16) To dissolve or to participate in the dissolution of any
partnership in which the Grantor shall have an inter est or in which
the Trustees, in the administration of any trust created hereunder,
shall hold an interest, or of which they shall become a member,
whether such dissolution is by agreement, by operation of law, or by
the judgment of any court, and to enter into any agreements with
respect thereto, upon such terms and conditions as they shall deem
proper.
(17) To buy, sell and trade in securities of any nature, including
short sales, on margin, and for such purposes to maintain and
operate margin accounts with brokers, and to pledge any securities
held or purchased by them with such brokers as security for loans
and advances made to them; PROVIDED, HOWEVER, it is the Grantor's
general intent that any investments, other than the Business
Interests, be invested in a balanced portfolio of high grade debt
and equity investments in publicly-held securities readily tradable
on an established securities market; PROVIDED FURTHER, HOWEVER, no
disposition of the Chem International, Inc. stock then held as an
asset of this trust may be made without the prior written consent of
the Grantor
FIFTH: FIDUCIARY LIABILITY. In the administration of
any trust created hereunder, the Grantor directs that:
(A) In any case in which the Trustees are required to divide any
trust created hereunder, or any portion thereof, into parts or shares, and/or is
required to distribute the same, or any portion thereof, or any part or share
into which the same shall have been divided, either to a single distributee, or
to two (2) or more distributees, they, in their sole discretion, may make such
partition, division or distribution wholly in kind or in money, or partly in
kind or in money, and may distribute different property interests having varying
income tax bases to the several distributees, and the choice and relative value
of the property or money so distributed, partitioned or divided shall, in the
absence of fraud or bad faith, be binding and conclusive on everyone
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interested therein, and they shall not be accountable for any error of judgment
or discretion in exercising the power and authority herein conferred.
(B) The Trustees shall not be accountable for any loss which may
occur to any trust herein created as a result of the exercise of, or the refusal
to exercise, any of the powers or discretions vested in them unless such losses
shall result from bad faith or fraud on the part of the Trustees.
(C) No loss whatever resulting to any trust created hereunder,
through the ownership or operation of any business by the Trustees, or as a
result of the building, construction or erection by him of any building,
improvements or structures, whether the same be carried on by a corporation,
partnership, proprietorship, or otherwise, shall be chargeable against the
Trustees personally.
(D) In each and every instance where the Trustees have the
discretion to pay all or any part of the income and/or principal of any trust
created hereunder, to any beneficiary, or to apply the same for his or her
benefit, the Trustees may take into consideration, but shall not be required to
do so, any other income or property which may be available to such beneficiary,
including the support which a husband or parent does provide, or is obligated to
provide.
(E) All the powers granted herein to the Trustees are in addition to
the powers granted to them by operation of law.
(F) The Trustees may consult with counsel and shall be fully
protected in any course of conduct taken in good faith in accordance with the
advice of counsel.
(G) The Trustees may exercise all of the power and authority
conferred upon them herein with respect to all property held under a power in
trust.
(H) No Trustee shall be disqualified from acting hereunder or from
exercising any power granted herein because they may hold an interest in
property in which any trust created here under shall also hold an interest, or
be a creditor of any such trust, or be an employee or agent of, or the holder of
any interest in, any business, sole proprietorship, joint venture, partnership,
association, corporation, or otherwise in which any trust created hereunder may
hold an interest, or by reason of the fact that they may also be serving as an
executor of the Grantor's estate or the trustee of any trust established under
the Grantor's Last Will and Testament.
The Trustees may be employed and/or engaged, in any capacity, or
render services to any trust created hereunder, and/or may be employed and/or
engaged by any corporation, partnership, joint venture, association, sole
proprietorship, or other entity in which any such trust may have an interest,
and they shall be entitled to receive and to retain (in addition to their
remuneration for services as Trustees hereunder) such compensation,
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perquisites and reimbursements of expenses in connection with such services,
payable in such manner, and upon such terms and conditions, as they, in their
discretion, shall deem proper.
The Trustees are further authorized, notwithstanding any provision
of law to the contrary in acting on behalf of any trust created hereunder, or on
behalf of any corporation, trust, part nership, joint venture, association, sole
proprietorship, or other entity in which any trust created hereunder shall have
an interest, to deal and have transactions of every kind or nature, either with
themselves, or with any corporation, estate, trust, partnership, joint venture,
association, sole proprietorship, or other entity in which they may have an
interest, either personally or as a fiduciary, and either directly or
indirectly, upon such terms and conditions as they, in their discretion, shall
deem advisable and any and all such transactions shall be fully binding upon any
trust created hereunder notwithstanding any such interest on his part, and under
no circumstances shall there arise any presumption of fraud or other impropriety
on the part of the Trustees in relation to any such transactions or dealings.
SIXTH: ACCEPTANCE OF TRUST. The Trustees hereby
expressly undertake and assume any trust hereby created and agrees to carry out
the provisions of this Agreement. Any successor Trustees shall qualify by
executing an instrument in writing, duly acknowledged, by which he, she or it
expressly agrees to assume any trust created hereunder and to carry out the
provisions hereof.
SEVENTH: SPENDTHRIFT CLAUSE. The interest of any beneficiary under
these trusts, either in income or in principal, or in both, shall not be subject
to sale, assignment, pledge or transfer in any manner, and such interest shall
not be liable or subject in any manner while in the possession of the Trustees
for the debts, contracts, obligations, liabilities, engagements, undertakings or
torts of any such beneficiary. No beneficiary shall have the power in any manner
to anticipate, charge or encumber his or her interest, either in income or in
principal, or in both.
EIGHTH: CONSTRUCTION. Whenever in this Agreement the
word "Trustees" is used, it shall be construed to include the Trustees and their
Successor or Successors in office, and all reference to such Trustees shall be
construed in the singular or plural, and in such gender as the sense and
circumstances require.
NINTH: IRREVOCABILITY. Except as hereinafter provided
in Subarticle ELEVENTH (A), this Trust may not be terminated, revoked, altered,
amended or changed in any respect whatsoever by anyone.
TENTH: BOND EXEMPTION. No bond or other security
shall be required of the Trustees in any jurisdiction in which they may be
called upon to act.
ELEVENTH: SUCCESSOR TRUSTEES. (A) E. GERALD KAY, while
acting as a Trustee and with the prior written consent of the
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Grantor, may, by a written instrument executed by him, at any time, and from
time to time, eliminate and/or add any person or persons as a Co-Trustee,
Co-Trustees, successor Trustee or successor Trustees and/or change the order of
succession of any successor Trustee or Trustees named herein and/or hereafter
designated by him.
(B) The last acting individual sole Trustee for whom no designated
Successor Trustee shall be available to act for any reason whatsoever, may, by a
written instrument executed by him or her during his or her lifetime (which he
or she may alter or supersede from time to time), acknowledged in the same
manner as is then required to record deeds of real estate in the State of New
Jersey, or by his or her Last Will and Testament duly admitted to probate,
designate one or more individuals and/or corporate banking institutions (and may
fix the order in which such individuals and/or corporate banking institutions
shall serve) as Successor Trustee or Successor Trustees, to succeed such sole
Trustee in the event that he or she shall cease to act as Trustee hereunder for
any reason whatsoever.
TWELFTH: RESIGNATION. The Trustees, or Successor
Trustees, shall have the right to resign at any time by delivery of notice in
writing to the Grantor.
THIRTEENTH: TAX CLAUSE. If any executor, administrator, or other
person acting in a fiduciary capacity for the estate of the Grantor has paid
death taxes levied or assessed under the provisions of any State and/or Federal
inheritance or succession tax or estate tax laws now existing or hereafter
enacted, and if under the provisions of any such law any or all of the trust
property is required to be included in the gross estate of the Grantor, the
Trustees are directed to reimburse such executor, administrator, or other person
acting in a fiduciary capacity for that proportionate part of the inheritance,
succession, estate and/or death taxes, including interest and penalties thereon,
paid by reason of the inclusion of the trust property in the gross estate of the
Grantor. The Trustees shall be entitled to rely conclusively upon the
determination of such executor, administrator, or other person acting in a
fiduciary capacity, as to the necessity for the inclusion of any or all of the
trust property in the gross estate of the Grantor, and as to the determination
of the proportionate part of such taxes, interest and penalties payable by
reason of such inclusion.
FOURTEENTH: GRANTOR TRUST. This shall be a Grantor
trust for Federal and New York tax purposes, but shall be governed by, and
interpreted in accordance with, the laws of the State of New Jersey.
FIFTEENTH: RELATIONSHIPS. For all purposes
under this instrument, whether for the determination of relationships or
otherwise, adopted children, whether of the Grantor or of any other person,
shall be considered to have, and shall be accorded, exactly the same status as
children born to the adopting parent in lawful wedlock.
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IN WITNESS WHEREOF, the Grantor and Trustees have here unto set
their hands and seals the day and year first above written.
Signed, Sealed and Delivered
In the Presence of:
/s/ Kevin M. Kilcullen /s/ Christina Kay (L.S.)
- ---------------------- -----------------
CHRISTINA KAY, Grantor
/s/ Kevin M. Kilcullen /s/ E. Gerald Kay (L.S.)
- ---------------------- -----------------
E. GERALD KAY, Trustee
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SCHEDULE A
List of Assets
$10 cash
<PAGE>
STATE OF NEW JERSEY )
: SS.:
COUNTY OF UNION )
BE IT REMEMBERED, that on this 4TH day of June, 1998, before me, the
subscriber, personally appeared E. GERALD KAY, who, I am satisfied, is the
Trustee mentioned in the within instrument, to whom I first made known the
contents thereof, and thereupon he acknowledged that he signed, sealed and
delivered the same as his voluntary act and deed, for the uses and purposes
therein ex pressed.
/s/Kevin M. Kilcullen
---------------------
KEVIN M. KILCULLEN
Attorney at Law
State of New Jersey
<PAGE>
STATE OF NEW JERSEY )
: SS.:
COUNTY OF UNION )
BE IT REMEMBERED, that on this 4TH day of June, 1998, before me, the
subscriber, personally appeared CHRISTINA KAY, who, I am satisfied, is the
Grantor mentioned in the within instrument, to whom I first made known the
contents thereof, and thereupon she acknowledged that she signed, sealed and
delivered the same as her voluntary act and deed, for the uses and purposes
therein ex pressed.
/s/ Kevin M. Kilcullen
----------------------
KEVIN M. KILCULLEN
Attorney at Law
State of New Jersey
