Free Reply to Response to Motion - District Court of Federal Claims - federal

Case 1:06-cv-00407-ECH

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/;

THE EDUCATIONAL AN HEALTH SUPPORT FUD

THIS TRUST AGREEMENT, is made and executed this

22~

day of February, 2002, by and between RICHARD SANDS and ROBERT
SANDS, hereinafter collectively referred to as the "Grantors" and

each singly as a "Grantor," and FREDDY H. ROBINSON, JAMES A.
LOCKE, III, and WESLEY M. STALLINGS, hereinafter collectively
referred to as the "Trustee" and each singly as a "Co-Trustee."

WIT N E SSE T H:
WHEREAS, the Grantors desire to create a trust
effecti ve this date and the Trustee agrees to act as Trustee

thereof;
NOW, THEREFORE, the Grantors and Trustee agree as

follows:
ARTICLE I

1.

TRUST NAM:

This trust shall be known as "The

Educational and Health Support Fund," and shall sometimes
hereinafter be referred to as the "Supporting Organization."
2.

TRUST PROPERTY:

The Grantors hereby transfer,

convey and deliver to the Trustee the property set fQrth on
Schedule "A," which is attached hereto and by this reference made
a part hereof.

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All the property transferred and delivered to the
Trustee shall, upon acceptance thereof by the Trustee, constitute

the trust estate and shall be held, managed and distributed as
herein provided.

3.

ADDITIONAL PROPERTY:

The Grantors or any other

person, with the consent of the Trustee, may transfer and
contribute property to the Supporting Organization and such
property shall be held pursuant to the provisions hereinafter set

forth.
4.
CHAITABLE
PURPOSES

AN

RESTRICTIONS:

The
as a

Grantors intend that the Supporting
"supporting organi zation" described

Organization qualify
in § 509 (a) (3) of

the
This

Internal Revenue Code, exempt from federal income taxation
pursuant to § 501 (c) (3) of the Internal Revenue Code.

Agreement shall be construed accordingly, and all powers and

authority of the Trustee shall be limited accordingly. The
Trustee shall have the power to amend this instrument in order to

comply with the requirements of § 509 (a) (3) of the Internal Revenue Code and the Regulations thereunder, and any such
amendment, except as it may otherwise provide, shall be deemed

effective as of the date of creation of this Supporting

Organization.

The Supporting Organi zation shall not carryon

propaganda or otherwise attempt to influence legislation in a
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manner which would result in loss of its exemption pursuant to
§ 501 (c) (3) of the Internal Revenue Code.

No activity of the Supporting Organization shall
consist of participating in or intervening in (including the
publishing or distributing of statements) any political campaign

on behalf of (or in opposition to) any candidate for public

office.

No part of the net earnings of the Supporting

Organization shall inure to the benefit of or be distributable to

the Grantors, Trustee, or any private individual or shareholder;

provided however, that the Supporting Organization shall be
authorized to pay reasonable compensation for services rendered
..d....,....

)(;:: and to make payments and distributions in furtherance of its

purposes as set forth in paragraph 2 of Article I I.
ARTICLE II

1.

ADMINISTRATION BY TRUSTEE:

The Trustee shall

manage and administer the property comprising the Supporting
Organization, as hereinafter set forth.

2.

SPECIFIED

ORGANIZATIONS:

The

Supporting

Organization is organized, and at all times hereafter shall be

operated,

exclusively for the benefit of,

to perf~rm the

functions of, or to carry out the purposes of, the following

charitable organizations, to wit:

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a. Rochester General Hospital, 1425 Portland
Avenue, Rochester, New York 14621 (EIN: 16-0743134);

b.

Viaheal th,

Inc. ,

1040 Uni versi ty Avenue,

Rochester, New York 14607 (EIN: 22-2551509);

c. Harley School, 1981 Clover Street, Rochester,

New York 14618 (EIN: 16-0755783);
d. Norman Howard School, Inc., 220 Idlewood
Road, Rochester, New York 14618 (EIN: 11-9904502);

e. Rochester Institute of Technology, 46 Lomb
Memorial Drive, Rochester, New York 14623 (EIN: 16-0743140);
f. Uni versi ty of Rochester, 306 Lattimore Hall,
.', ".',' '. ~-:: ............

,-';. .'

Rochester, New York 14627 (EIN: 16-0743209);

g. h.

Skidmore

College,

815

North

Broadway,

Saratoga Springs, New York 12866 (EIN: 14-1338562) ;

Reed

Institute,

3203

S.E.

Woodstock

Boulevard, Portland, Oregon 97202 (EIN: 93-0386908) ;

i. Pace Uni versi ty, 235 Elm Road, Briarcliff

Manor, New York 10510 (EIN: 13-5562314) ;
J. Rochester Area Community Foundation, 500 East
Avenue, Rochester, New York 14607 (EIN: 23-7250641);

k.

Jewish

Communi ty

Federation

of

Greater

Rochester New York, Inc., 44 i East Avenue, Rochester, New York

14607 (EIN:

16-0868942) ;

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1.

Frederick

Ferris

Thompson

Hospital,

350

Parrish Street, Canandaigua, New York 14424 (EIN: 16-0743024);

m. Greater Canandaigua Family YMCA, 32 North
Main Street, Canandaigua, New York 14424 (EIN: 16-0755898);

n. Fidelity Chari table Gift Fund (Donor Advised
Fund), 82 Devonshire Street, F35, Boston, Massachusetts 02109;

o. Vanguard Chari table Endowment Program, 100

Vanguard

Boulevard,

Mal vern,

Pennsyl vania

19355

(EIN: 23-2888152);

p. Idaho Community Foundation, 270 West State
Street, Boise, Idaho 83702 (EIN: 82-0425063);

q. Rochester City Ballet, 210-A North Goodman
Street, Rochester, New York 14607;

r. Norman Howard School Foundation, Inc., 275
Pinnacle Road, Rochester, New York 14623 (EIN: 16-1557039); and

s. F. F. Thompson Hospital Foundation, Inc.,

350
(EIN:

Parrish
The

Street,
above-listed

Canandaigua,

New

York

14424

22-2959984) .

organizations

shall

hereinafter

collectively be referred to as the "Supported Organizations" and

each singly as a "Supported Organization." The Supporting
Organization shall not engage in any activities which are not in

furtherance of the purposes referred to in § 509 (a) (3) (A) of the

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Internal Revenue Code.

The Supporting Organization shall not
benefi t any organization other than the
The Supporting Organization shall

operate to support or
Supported Organizations.

3.

OPERATIONS:

engage in acti vi ties which benefit or support the Supported
Organizations. The Supporting Organization may make payments to

or for the use of, or provide services or facilities for,
indi vidual members of the chari table class benefited by one or

more of the Supported Organizations. The Supporting Organization

may make a payment through another unrelated organization to a

member of a charitable class benefited by one or more of the

Supported Organizations, but only if such payment shall

consti tute a grant to an individual rather than a grant to an
organization. The Supporting Organization may carryon an
independent activity or program which supports or benefits one or
more of the Supported Organizations.

No part of the acti vi ties
Organization shall be in furtherance of a

of the

Support ing

purpose
of the

other than

supporting

or

benefiting

one

or

more

Supported

Organizations.
4 . VARYING AMOUNT OF SUPPORT: The Support ing
Organization may vary the amount of the Supporting Organization IS
support among the different Supported Organizations, so long as

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the Supporting Organization meets the requirements of the
"integral part" test set forth in § 1.509(a)-4(i) (3) of the

Regulations.
5.
ALTERNATE SUPPORTED ORGANIZATIONS:

If anyone or

more of the Supported Organizations ceases to qualify pursuant to
§ 509 (a) (1) or (2), or if a Supported Organization substantially

fails or abandons its operations, or if a Supported Organization

dissolves, then the Supporting Organi zation shall terminate its

support of such Supported Organization or Organizations, as the

case may be.

In such event, the Trustee may substitute one or

more organizations described in § 509(a) (1) or (2) and which

serve purposes and carryon acti vi ties similar to those served by
the former Supported Organization or Organizations, as the case

may be. The substituted Supported Organi zat ion or Organizations
shall be treated for all purposes hereunder as a Supported

Organization or Organizations. No Trustee shall have the
foregoing power of substitution unless the event giving rise to
the power is beyond the control of the Supporting Organization.

6. RELATIONSHIP BETWEN SUPPORTING ORGANIZATION AND
SUPPORTED ORGANIZATION:

a.

Operated in Connection With

Supported Organization: The Supporting Organization shall be
operated in connection with the Supported Organi zations.

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b . Responsiveness:

The Supporting Organization

shall

be responsive to the needs or demands of the Supported

Organizations.
c. Chari table Trust and Accounting: The
Supporting Organization is a chari table trust under the laws of

the State of Idaho and each named Supported Organization has the

power to enforce the Supporting Organization and compel an
accounting under Idaho Code § 15-7-303.

d. Integral Part: The Supporting Organization
shall maintain a significant involvement in the operations of the

Supported Organizations.
In each of the Supporting Organization's fiscal years,
the Supporting Organization shall satisfy either of the following

requirements, to wi t :
(i) the Trustee shall pay substantially all
of the Supporting Organization's income to or for the use of one
or more of the Supported Organizations and this amount of support shall be sufficient to ensure the attentiveness of one or more of

the Supported Organizations to the operations of the Supporting

Organization. In addition, the Trustee shall pay to or for the
use of one or more Supported Organizations a substantial amount

of the Supporting Organization's total support which meets the

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attentiveness requirements set forth in this subparagraph (i) of

paragraph 6 (d); or
(ii) the acti vi ties in which the Supporting

Organization engages for or on behalf of the Supported
Organizations shall be acti vi ties to perform the functions of, or

to carry out the purposes of, the Supported Organi zations. In

addition, these activities shall be such that, but for the
involvement of the Supporting Organization, one or more of the

Supported Organizations would normally engage in the acti vi ties.
7.
TAXTION
RULES:
Notwi thstanding

any

other

provisions set forth in this Trust Agreement, if, and for so long

as, the Supporting Organization is a private foundation which
does not qualify as a "supporting organization" as described in

§ 509 (a) (3) of the Internal Revenue Code, then the Trustee shall
not:
a. Engage in any act of self-dealing as defined
by § 494 i (d) of the Internal Revenue Code;

b. Retain any excess business holdings as defined
by § 4943 (c) of the Internal Revenue Code which would subj ect the

Supporting Organization to tax under § 4943 of the Internal
Revenue Code;

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c. Make any investments which would subj ect the

Supporting Organization to tax under § 4944 of the Internal
Revenue Code;

d. Make any taxable expenditure as defined by
§ 4945 (d) of the Internal Revenue Code;

e. Fail to make distributions at such time or in

such manner as to subj ect the Supporting Organi za tion to tax
under § 4942 of the Internal Revenue Code; or
f. Carryon any

other activities not permitted to

be carried on by:

(i) an organi zation exempt from federal
~~~j~~~'?;: '. ..~:;:.

income tax under Internal Revenue Code § 501 (c) (3), or
(ii) an organization to which contributions

are deductible under Internal Revenue Code § 170 (c) (2) .
8 . PRIVATE OPERATING FOUNDATION; CONDUIT FOUNDATION:
If, for any reason, the Supporting Organization does not qualify

as a "supporting organization" under § 509 (a) (3) of the Internal
Revenue Code, then the Trustee shall devote its best efforts to

quali fying the

Supporting Organization as

an

organization

described in § 509(a) (1) or § 509(a) (2) of the Internal Revenue

Code, a "private operating foundation" under § 4942 (j) of the
Internal Revenue Code, or as a private foundation qualifying

under § 170(b) (1) (E) (ii)

of the

Internal

Revenue Code,

a

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so-called "conduit foundation." These efforts shall include, for

example, amendments to this organi zing instrument which may be
required by law for qualification of the Supporting Organization
as a "private operating foundation" or a "conduit foundation."

9.

TRUST

TERMINATION:

If

this

Supporting

Organization terminates for any reason, then after paying of

adequately providing for the debts and obligations of the
Supporting Organization, the Trustee in its sole and absolute
discretion shall distribute the remaining assets to one or more

of the Supported Organizations which are then described in
§§ 509 (a) (1) and 509 (a) (2) of the Code, provided that the use of

these assets will be restricted to those purposes exclusively

described under § 501 (c) (3) of the Code..
10 . CRETION OF CORPORATION:
The

Trustee

is

authorized and empowered to form and organize a nonprofit

corporation for the uses and purposes of the

Supporting

Organization, and qualify as a "supporting organization" under

Internal Revenue Code § 509(a) (3).
Fund.

Such corporation,

if

organi zed, shall be named The Educational and Health Support

Upon the creation and organization of such corporation,

the Trustee is authorized and empowered to convey, transfer and
deliver to such corporation aii the property and assets to which the Supporting Organization may be or become entitled. It is the

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purpose of this paragraph 10 that the board of directors of such

corporation, if incorporated and organized as provided by this
paragraph, shall take the place of the Trustee, who shall be the
incorporator of such corporation.
ARTICLE III

1.

INCOME

AND

PRINCIPAL

ALLOCATIONS:

Unless

otherwise specifically provided, the Trustee shall determine
whether all or any part of any payment or property received or

charged, expense or taxes incurred, shall be credited to or charged against income or principal, or both, in the manner
provided by Idaho law, including but not limited to the Uniform

Principal and Income Act as now in effect and as hereafter
amended. The determination of the Trustee as to what constitutes
principal and income shall, unless otherwise provided herein, be

concl usi ve and binding on all persons in any manner interested in
the Supporting Organization created by this Trust Agreement.

2. TRUSTEE POWERS: To carry out the purposes of the
Supporting Organization created under this Trust Agreement, and
subj ect to any limitations stated elsewhere herein, the Trustee

shall have all of the powers and authority under Idaho law
including but not limited to those which are set forth in the
Uniform Trustee's Powers Act, being Chapter i of Title 68, Idaho

Code, as now in effect and as it may hereafter be amended, but

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only to the extent such powers are not inconsistent with the operation of the Supporting Organization created herein as a

supporting organization which qualifies as such pursuant to

Internal Revenue Code § 509(a) (3).
3.
TRUSTEE COMPOSITION:

At no time shall the number

of Co-Trustees who are not "disqualified persons" (as defined in

§ 4946 of the Internal Revenue Code) be less than a number which
is one more than the number of disqualified persons then serving
as Co-Trustees.

4.

COMPENSATION AN ACCOUNTING:

The Trustee and all

persons employed by the Trustee shall be entitled to reasonable

compensation in accordance with the provisions of applicable

state law. The Trustee shall reasonably account as to the
Supporting Organization and its administration as provided by
state law.

5.

SUCCESSOR TRUSTEE:

a.

Resignation:

Any

Co-Trustee may resign as a Co-Trustee at any time by so notifying

in writing the Grantors, or surviving Grantor,
otherwise the remaining Co-Trustees.

if living,

b.

Removal:

The Grantors or the surviving

Grantor, as the case may be, may remove a Co-Trustee, other than

a Grantor, by giving written notice of such removal to such

Co-Trustee.
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Upon the death or incapacity of both Grantors, the

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Co-Trustees may remove a Co-Trustee by two-thirds (2/3) majority

vote and by giving written notice of such removal to such

Co-Trustee.

Any vacancy created pursuant to the removal

provisions contained herein shall be filled as otherwise provided

in this paragraph 5 of this Article I II.
c. Appointment of Successor by Grantors and

Descendants:

(i)

In the event either Grantor, subsequent to the

execution of this Agreement, is appointed to be a Co-Trustee,
such Grantor shall appoint a successor Co-Trustee to succeed such

Grantor upon such Grantor 1 s death, resignation or incapacity;
provided however, that such appointee must be a descendant of the

.:::;;;,,;:¡ Grantors' parents or such descendant's spouse. Thereafter, if no
appointment is made pursuant to subparagraph 5 (c) (ii) of this

-r~~.::~,

Article III, then each appointed descendant or descendant 's
spouse shall appoint his or her successor Co-Trustee who must

also be

a descendant

of the Grantors'

parents or

such

descendant's spouse.

(ii) Upon the death, resignation, removal,
or incapacity of any Co-Trustee who is not a Grantor, a successor

Co-Trustee shall be appointed by the Grantors or the survi ving

Grantor, as the case may be, subject to the provisions of paragraph 3 of this Article I I I. In the event the number of
Co-Trustees is increased pursuant to paragraph 6 of this Article

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I I I, an additional Co-Trustee or Co-Trustees shall be appointed
by the Grantor or the surviving Grantor, as the case may be, to
fill any vacant Co-Trustee or Co-Trustees position or positions

created by such increase in the number of Co-Trustees, subj ect to
the provisions of paragraph 3 of this Article III.
If no

appointment is made pursuant to the foregoing provisions, a
successor Trustee shall be appointed in accordance with paragraph
5 (d) of this Article III.

d.

No

Descendants:

If

no

Made by appointment of successor
Appointment

Grantors or
or additional

Co-Trustee is made by the Grantors or surviving Grantor, as the
case may be, or in all events after the death of both Grantors,

then the remaining Co-Trustees shall appoint a successor or
addi tional Co-Trustee by maj ori ty vote, subj ect to the provisions

of paragraph 3 of this Article III.

If no appointment is made in accordance with the
foregoing procedures, a successor or additional Co-Trustee shall

be appointed by a court of competent jurisdiction upon the

peti tion of any Co-Trustee or of any person or persons interested
in the Trust.

e.

Successor Trustees:

A successor Co-Trustee

shall succeed as a Co-Trustee of this Supporting Organization
wi th the same conditions as are herein set forth.

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f. Appointments:

All appointments as to a
shall be in writing and

successor or

addi tional Co-Trustee

subject to the provisions of paragraph 3 of this Article III.

g. Increase in Number of Co-Trustees: Subj ect
to paragraph 3 of this Article III, in the event the number of
Co-Trustees is increased pursuant to paragraph 6 of this Article
II I, additional Co-Trustees shall be appointed in accordance with

the terms of this paragraph 5 of Article III to fill any vacant

Co-Trustee or Co-Trustees position or positions created by such

increase in the number of Co-Trustees and if the number of
Co-Trustees is reduced pursuant to paragraph 6 of this Article

III the applicable number of Co-Trustees shall be removed in
accordance with paragraph 5 (b) of this Article III.

6. BOAR OF TRUSTEES: All Co-Trustees who are
currently serving as a Co-Trustee of this Supporting Organization

shall be members of the Board of Trustees. The Board of Trustees
may appoint a Chairperson to serve for a period designated by the

Board of Trustees. The Board of Trustees may adopt application

forms and requirements, charitable qualification criteria, or
other regulations to govern administrative functions relating to
the operations of the Supporting Organization, provided that they
are consistent with the charitable purposes herein.

The Board of

Trustees may establish separate subcommittees

and delegate
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specific duties and responsibilities to such subcommittees. The
Board of Trustees may expand or contract the number of members of

the Board of Trustees (to be appointed in accordance with

paragraph 5 of this Article I I I), but the Board of Trustees shall
at all times consist of not less than three (3) members nor more
than nine (9) members.

7 . LIABILITY AN INDEMNITY:

A Co-Trustee shall not

be liable for conduct that was in good faith and which the
Co-Trustees reasonably believed was in the best interests of the

Supporting Organization or not opposed to the Supporting

Organization i s best interests or had no reasonable cause to believe the conduct was unlawful. A Co-Trustee shall be
indemnified by the Supporting Organization for costs and damages

incurred as a result of an action or threatened actions with
respect to the Co-Trustee' s activities in connection with the
administration of this Supporting Organization.

Indemnification

shall be made according to the permitted standards under Idaho

law for such indemnification of charitable trustees. The Co-

Trustees may carry such insurance coverage as they may deem
appropriate for insuring the Co-Trustees, officers and employees
for actions commenced or threatened against them.
Notwi thstanding the foregoing, no payment shall be made

to or for the benef i t of any Co-Trustee, officer or employee as

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would subj ect this Supporting Organization to taxation under
Chapter 42 of the Internal Revenue Code.

8.

CONTROL:

At no time shall

the

Supporting

Organization be controlled, directly or indirectly, by one or
more disqualified persons, as defined in § 4946 of the Internal

Revenue Code, or other than foundation managers and other than
one or more of the Supported Organizations.

9.

REFERENCES TO SECTIONS:

Unless the context

clearly implies the contrary, all references to "§" or "§§"
(section or sections) are to sections of the Internal Revenue
Code of 1986, as hereafter amended, or corresponding provisions
of future federal tax laws and the Internal Revenue Code.

ARTICLE IV

1.

AMNDMENTS:

This Agreement may be amended or

modified from time to time by the Grantors or the surviving
Grantor, by an instrument in writing, signed by the Grantors or
survi ving Grantor and delivered to the Trustee; provided however,

that no amendment shall authorize the Trustee to conduct the
affairs of this Supporting Organization in any manner or for any

purpose contrary to the provisions of Internal Revenue Code

§ 501 (c) (3) or that would disqualify this Supporting Organization
as a tax-exempt trust or prohibit donations to this Supporting
Organization from being deductible for tax purposes.

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Upon the death of both Grantors, this Agreement and the

Supporting Organization hereby created are irrevocable; provided
however, the Trustee, acting alone, shall have the power to amend
this Supporting Organization for the purpose of ensuring that the

Supporting Organization qualifies as a charitable organization to

which donations are deductible within the meaning of the Internal

Revenue Code.

2.

SITUS:

This

Supporting

Organization

is

established and accepted by the Trustee under the laws of the
State of Idaho and the situs of the Supporting Organization is

Idaho. All questions concerning the validity, construction and

administration

of

such

Supporting

Organization

shall

be

determined under such laws. Provided however, the Trustee may

transfer the situs, including transferring the place of
administration to another jurisdiction (whether the place of

administration is wi thin our without the State of Idaho), of the
Supporting Organization created hereunder without the necessity

of judicial proceedings or intervention; provided that the
Trustee has determined, in good faith, that the transfer would
facili tate the economic and convenient administration of such

Supporting Organization and would not materially impair the
interests of any beneficiary or potential beneficiary.
In the

event of such a change of situs, all questions concerning the

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Supporting

Organization's

validity,

construction

and

administration shall be determined under the laws of the
jurisdiction to which situs is transferred.
Provided however,

that no change in situs shall authorize the Trustee to conduct
the affairs of the Supporting Organization in any manner or for any purpose contrary to the provisions of Internal Revenue Code
§ 501 (c) (3) or that would disqualify the Supporting Organization

as a tax-exempt trust or prohibit donations to this Supporting
Organization from being deductible for tax purposes.

3.

HEA INGS :

The

paragraph

headings

are

for

convenience only and are not a part of this Trust Agreement and

shall not be used in interpreting or construing this Trust

Agreement.
4. INVALIDITY: If any provision of this Agreement is

deemed invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall not be affected thereby but

rather shall be enforced to the greatest extent permitted by
applicable law.

5.

ORIGINAL COUNTERPARTS:

This Agreement may be

executed through the use of multiple original counterparts.

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.

R:ihard Sands

RObe~~ --t~ /'s

"Grantors"

£f~ t (f

-;l:." /F/. ,/ ---

Freddy H. Robinson

James A. Locke, III

Wesley M. Stallings

"Co-Trustees"

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IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.

Richard Sands

Robert Sands
11 Grantors 11

~ 1+ 74L~
Freddy H. binson
James A. Locke, III

we:tj s~i~11 Co-Trustees 11

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APP-B-000023

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THE EDUCATIONAL AN HEALTH SUPPORT FUN

THIS TRUST AGREEMENT, is made and executed this

l2- ..0\

day of February, 2002, by and between RICHARD SANDS and ROBERT
SANDS, hereinafter collectively referred to as the "Grantors" and

each singly as a "Grantor," and FREDDY H. ROBINSON, JAMES A.
LOCKE, III, and WESLEY M. STALLINGS, hereinafter collectively
referred to as the "Trustee" and each singly as a "Co-Trustee."

WIT N E SSE T H:
WHEREAS,
. ~ .~~. :~:"'.,' ..

the Grantors desire to create a trust

"'.~-:;;~ effective this date and the Trustee agrees to act as Trustee
thereof;
NOW, THEREFORE, the Grantors and Trustee agree as

follows:
ARTICLE I

1.

TRUST NAME:

This trust shall be known as "The

Educational and Health Support Fund, " and shall sometimes
hereinafter be referred to as the "Supporting Organization."

2.

TRUST PROPERTY:

The Grantors hereby transfer,

convey and deliver to the Trustee the property set forth on

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Schedule "A," which is attached hereto and by this reference made
a part hereof.

All the property transferred and delivered to the
Trustee shall, upon acceptance thereof by the Trustee, constitute

the trust estate and shall be held, managed and distributed as
herein provided.

3.

ADDITIONAL PROPERTY:

The Grantors or any other

person, with the consent of the Trustee, may transfer and
contribute property to the Supporting Organization and such

property shall be held pursuant to the provisions hereinafter set
forth.
4.
CHARITABLE

PURPOSES

AN

RESTRICTIONS:

The

Grantors intend that the Supporting Organization qualify as a

"supporting organization" described in § 509(a) (3)
pursuant to § 501(c) (3) of the Internal Revenue Code.

of the

Internal Revenue Code, exempt from federal income taxation

This

Agreement shall be construed accordingly, and all powers and

authority of the Trustee shall be limited accordingly. The
Trustee shall have the power to amend this instrument in order to

comply with the requirements of § 509 (a) (3) of the Internal Revenue Code and the Regulations thereunder i and any such
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amendment, except as it may otherwise provide, shaii be deemed

effective as of the date of creation of this Supporting

Organizatíon.

The Supporting Organization shall not carryon

propaganda or otherwise attempt to influence legislation in a
manner which would result in loss of its exemption pursuant to
§ 50i(c) (3) of the Internal Revenue Code.

No activity of the Supporting Organization shall
consist of participating in or intervening in (including the
publishing or distributing of statements) any political campaign

on behalf of (or in opposition to) any candidate for public

office.

No part of the net earnings of the Supporting

Organization shall inure to the benefit of or be distributable to
the Grantors, Trustee, or any pri vate individual or shareholder i

provided however, that the Supporting Organization shall be
authorized to pay reasonable compensation for services rendered

and to make payments and distributions in furtherance of its

purposes as set forth in paragraph 2 of Article I I.
ARTICLE II

i.

ADMINISTRATION BY TRUSTEE:

The Trustee shall

manage and administer the property comprising the Supporting
Organization, as hereinafter set forth.

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2.

SPECIFIED

ORGANIZATIONS:

The

Support ing

Organization is organized, and at all times hereafter shall be

operated,

exclusively for the benefit of,

to perform the

functions of, or to carry out the purposes of, the following

chari table organizations, to wit:
a.

Rochester General Hospital,

1425 Portland

Avenue, Rochester, New York 14621 (EIN: 16-0743134);

b.

Viahealth,

Inc. ,

1040 University Avenue,

Rochester, New York 14607 (EIN: 22-2551509);

c. Harley School, 1981 Clover Street, Rochester,

New York 14618 (EIN: 16-0755783) i
d.

-

Norman Howard School,

Inc. ,

220 Id1ewood

Road, Rochester, New York 14618 (ErN: 11- 9904502) ;
e. Rochester Institute of Technology, 46 Lomb
Memorial Drive, Rochester, New York 14623 (EIN: 16-0743140);

f. University of Rochester, 306 Lattimore Hall,
Rochester, New York 14627 (EIN: 16-0743209);

g.

Skidmore

College,

815

North

Broadway,

Saratoga Springs, New York 12866 (EIN: 14-1338562);

h.

Reed

Institute,

3203

S.E.

Woodstock

Boulevard, Portland, Oregon 97202 (EIN: 93-0386908);

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i. Pace University, 235 Elm Road, Briarcliff
Manor, New York 10510 (EIN; 13-5562314);

j. Rochester Area Community Foundation, 500 East
Avenue, Rochester, New York 14607 (EIN: 23-7250641);

k.

Jewish

Community

Federation

of

Greater

Rochester New York, Inc., 441 East Avenue, Rochester, New York
14607 (EIN: 16-0868942);

1.

Frederick

Ferris

Thompson Hospital,

350

Parrish Street, Canandaigua, New York 14424 (EIN: 16-0743024);

m. Greater Canandaigua Family YMCA, 32 North

Main Street, Canandaigua, New York 14424 (EIN: 16 - 0755898) ;
n. Fidelity Charitable Gift Fund (Donor Advised
Fund), 82 Devonshire Street, F35, Boston, Massachusetts 02109;

o. Vanguard Charitable Endowment Program, 100

Vanguard

Boulevard,

Malvern,

Pennsylvania

19355

(EIN: 23-2888152);

p. Idaho Community Foundation, 270 West State
Street, Boise, Idaho 83702 (EIN: 82-0425063);

q. Rochester City Ballet, 210-A North Goodman
Street, Rochester, New York 14607;

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r. Norman Howard School Foundation, Inc., 275
Pinnacle Road, Rochester, New York 14623 (EIN: 16-1557039); and

s. F. F. Thompson Hospital Foundation, Inc. ,
350

Parrish

Street,
above-listed

Cananda i gua ,

New

York

14424

(EIN: 22-2959984).

The

organizations

shall

hereinafter

collectively be referred to as the ii Supported Organizations" and

each singly as a "Supported Organization."

The Support ing

Organization shaii not engage in any activities which are not in

furtherance of the purposes referred to in § 509 (a) (3) (A) of the
. ~''¡ .- ':":.~',"':'\

Internal Revenue Code.

The Supporting Organization shaii not

operate to support or benefit any organization other than the
Supported Organizations.

3.

OPERATIONS:

The Supporting Organization shaii

engage in activities which benefit or support the Supported

Organizations.

The Supporting Organization may make payments to

or for the use of, or provide services or facilities for,
individual members of the charitable class benefited by one or

more of. thè Supported Organizations. The Supporting Organization
may make a payment through another unrelated organization to a

member of a charitable class benefited by one or more of the

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Supported Organizations,

but

only if

such payment

shall

constitute a grant to an individual rather than a grant to an

organization.

The Supporting Organization may carryon an

independent activity or program which supports or benefits one or
more of the Supported Organizations.
No

part

of

the

acti vi ties

of

the

Supporting

Organization shall be in furtherance of a purpose other than

support ing

or benefiting

one

or more

of

the

Supported

Organizations.
4.
VARYING AMOUN OF SUPPORT:
The

Supporting

Organization may vary the amount of the Supporting Organization i s
support among the different Supported Organizations, so long as

the Supporting Organization meets the requirements of the
"integral part" test set forth in § 1.509(a)-4(i) (3) of the

Regulations.
5.
ALTERNATE SUPPORTED ORGANIZATIONS:

If anyone or

more of the Supported Organizations ceases to qualify pursuant to

§ 509 (a) (1) or (2), or if a Supported Organization substantially
fails or abandons its operations, or if a Supported Organization

dissolves, then the Supporting Organization shall terminate its
support of such Supported Organization or Organizations, as the

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case may be.

In such event, the Trustee may substitute one or

more organizations described in § 509(a) (1) or (2) and which
serve purposes and carryon activities similar to those served by

the former Supported Organization or Organizations, as the case

may be.

The substituted Supported Organization or Organizations

shall be treated for all purposes hereunder as a Supported
Organization or Organizations.

No Trustee shall have the

foregoing power of substitution unless the event giving rise to
the power is beyond the control of the Supporting Organization.

6. RELATIONSHIP BETWEEN SUPPORTING ORGANIZATION AN
SUPPORTED ORGANIZATION:

a.

Operated in Connection With

Supported Orqanization:

The Supporting Organization shall be

operated in connection with the Supported Organizations.

b.

Responsiveness:

The Supporting Organization

shall be responsive to the needs or demands of the Supported

Organizations.
c.
Chari table

Trust

and

Accounting:

The

Supporting Organization is a charitable trust under the laws of
the State df Idaho and each named Supported Organization has the

power to enforce the Supporting Organization and compel an
accounting under Idaho Code § 15-7-303.

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d.

Inteqral Part:

The Supporting Organization

shall maintain a significant involvement in the operations of the
Supported Organizations.

In each of the Supporting Organization's fiscal years,
the Supporting Organization shall satisfy either of the following

requirements, to wit:
(i) the Trustee shall pay substantially all
of the Supporting Organization's income to or for the use of one
or more of the Supported Organizations and this amount of support shall be sufficient to ensure the attentiveness of one or more of

the Supported Organizations to the operations of the Supporting

Organization.

In addition, the Trustee shall pay to or for the

use of one or more Supported Organizations a substantial amount

of the Supporting Organization i s total support which meets the
attentiveness requirements set forth in. this subparagraph (i) of
paragraph 6 (d); or

(ii) the activities in which the Supporting

Organization engages

for or on behalf

of

the Supported

Organizations shall be activities to perform the functions of, or

to carry out the purposes of, the Supported Organizations. In

addition, these activities shall be such that, but for the
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involvement of the Supporting Organization, one or more of the
Supported Organizations would normally engage in the activities.

7.

TAXATION

RULES:

Notwi thstanding

any

other

provisions set forth in this Trust Agreement i if, and for so long

as, the Supporting Organization is a private foundation which
does not qualify as a "supporting organization" as described in
§ 509(a) (3) of the Internal Revenue Code, then the Trustee shall

not:
a. Engage in any act of self-dealing as defined
by § 494 i (d) of the Internal Revenue Code i

b. Retain any excess business holdings as def ined
by § 4943 (c) of the Internal Revenue Code which would subject the

Supporting Organization to tax under § 4943 of the Internal
Revenue Code;
c. Make any investments which would subj ect the

Supporting Organization to tax under § 4944 of the Internal
Revenue Code i

d. Make any taxable expenditure as defined by
§ 4945 (d) of the Internal Revenue Code;

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e. Fail to make distributions at such time or in

such manner as to subject the Supporting Organization to tax
under § 4942 of the Internal Revenue Code; or

f. Carryon any other activities not permitted to
be carried on by:

(i) an organization exempt from federal

income tax under Internal Revenue Code § 501 (c) (3), or
(ii) an organization to which contributions

are deductible under Internal Revenue Code § 170 (c) (2) .
8. PRIVATE OPERATING FOUNATION; CONDUIT FOUNATION:
If, for any reason, the Supporting Organization does not qualify

as a "supporting organization" under § 509 (a) (3) of the Internal
Revenue Code, then the Trustee shall devote its best efforts to

qualifying the

Supporting Organization as an organization

described in § 509 (a) (1) or § 509 (a) (2) of the Internal Revenue

Code, a "private operating foundation" under § 4942 (j ) of the
Internal Revenue Code, or as a private foundation qualifying

under § 170 (b) (1) (E) (ii)

of

the

Internal

Revenue Code,

a

so-called IIconduit foundation." These efforts shall include, for

example, amendments to this organizing instrument which may be

SANDS2459
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required by law for qualification of the Supporting Organization
as a "private operating foundation" or a "conduit foundation."

9.

TRUST

TERMINATION:

If

this

SUpport ing

Organization terminates for any reason, then after paying of

adequately providing for the debts and obligations of the
Supporting Organization, the Trustee in its sole and absolute
discretion shall distribute the remaining assets to one or more

of the Supported Organizations which are then described in
§§ 509.(a) (1) and 509(a) (2) of the Code, provided that the use of

these assets will be restricted to those purposes exclusively

described under § 501 (c) (3) of the Code..
10 . CREATION
OF

CORPORATION:

The

Trustee

lS

authorized and empowered to form and organize a nonprofit

corporation for the uses and purposes of the Supporting
Organization, and qualify as a "supporting organization" under

Internal Revenue Code § 509 (a) (3) .

Such corporation,

if

organized, shall be named The Educational and Health Support

Fund.

Upon the creation and organization of such corporation,

the Trust~e is authorized and empowered to convey, transfer and
deliver to such corporation all the property and assets to which
the Supporting Organization may be or become entitled. It is the

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purpose of this paragraph 10 that the board of directors of such

corporation, if incorporated and organized as provided by this
paragraph, shall take the place of the Trustee, who shall be the
incorporator of such corporation.

ARTICLE III

1.

INCOME

AN

PRINCIPAL

ALLOCATIONS:

Unless

otherwise specifically provided, the Trustee shall determine
whether all or any part of any payment or property received or

charged, expense or taxes incurred, shall be credited to or charged against income or principal, or both, in the manner
provided by Idaho law, including but not limited to the Uniform

Principal and Income Act as now in effect and as hereafter
amended. The determination of the Trustee as to what constitutes

principal and income shall, unless otherwise provided herein, be
conclusi ve and binding on all persons in any manner interested in

the Supporting Organization created by this Trust Agreement.

2.

TRUSTEE POWERS:

To carry out the purposes of the

Supporting Organization created under this Trust Agreement, and
subj ect to any limitations stated elsewhere herein, the Trustee

shall have all of the powers and authority under Idaho law
including but not limited to those which are set forth in the

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Uniform Trustee's Powers Act, being Chapter i of Title 68, Idaho

Code, as now in effect and as it may hereafter be amended, but

only to the extent such powers are not inconsistent with the

operation of the Supporting Organization created herein as a

supporting organization which qualifies as such pursuant to

Internal Revenue Code § 509 (a) (3) .
3. TRUSTEE COMPOSITION: At no time shall the number
of Co-Trustees who are not "disqualified persons" (as defined in

§ 4946 of the Internal Revenue Code) be less than a number which
is one more than the number of disqualified persons then serving
as Co-Trustees.

4.

COMPENSATION AN ACCOUNTING:

The Trustee and all

persons employed by the Trustee shall be entitled to reasonable

compensation in accordance with the provisions of applicable
state law.

The Trustee shall reasonably account as to the

Supporting Organization and its administration as provided by
state law.

5.
Co-Trustee'

SUCCESSOR TRUSTEE:

a.

Resianation:

Any

may resign as a Co-Trustee at any time by so notifying

in writing the Grantors, or surviving Grantor,
otherwise the remaining Co-Trustees.

if living,

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b.

Removal:

The Grantors or the surviving

Grantor, as the case may be, may remove a Co-Trustee, other than

a Grantor, by giving written notice of such removal to such

Co-Trustee.

Upon the death or incapacity of both Grantors, the

Co-Trustees may remove a Co-Trustee by two-thirds (2/3) majority

vote and by giving written notice of such removal to such

Co-Trustee.

Any vacancy created pursuant to the removal

provisions contained herein shall be filled as otherwise provided
in this paragraph 5 of this Article III.

c. Appointment of Successor bv Grantors and

Descendants:

( i)

In the event either Grantor, subsequent to the

execution of this Agreement, is appointed to be a Co-Trustee,
such Grantor shall appoint a successor Co-Trustee to succeed such

Grantor upon such Grantor i s death, resignation or incapacity;
provided however, that such appointee must be a descendant of the
Grantors i parents or such descendant i s spouse. Thereafter, if no

appointment is made pursuant to subparagraph 5 (c) (ii) of this

Article III, then each appointed descendant or descendant i s
spouse shall. appoint his or her successor Co-Trustee who must

also be

a

descendant

of

the

Grantors i

parents

or such

descendant i S spouse.
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(ii) Upon the death, resignation, removal,
or incapacity of any Co-Trustee who is not a Grantor, a successor

Co-Trustee shall be appointed by the Grantors or the surviving

Grantor, as the case may be, subj ect to the provisions of
paragraph 3 of this Article III.

In the event the number of

Co-Trustees is increased pursuant to paragraph 6 of this Article

III, an additional Co-Trustee or Co-Trustees shall be appointed

by the Grantor or the surviving Grantor, as the case may be, to
fill any vacant Co-Trustee or Co-Trustees position or positions

created by such increase in the number of Co-Trustees, subj ect to
the provisions of paragraph 3 of this Article III.
If no

appointment is made pursuant to the foregoing provisions, a
successor Trustee shall be appointed in accordance with paragraph
5 (d) of this Article III.

d.
Descendants:

No

Appointment

Made

by

Grantors

or

If no appointment of successor or additional

Co-Trustee is made by the Grantors or surviving Grantor, as the
case may be, or in all events after the death of both Grantors,

then the remaining Co-Trustees shall appoint a successor or
additional Co-Trustee by majority vote, subject to the provisions
of paragraph 3 of this Article III.

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If no appointment is made in accordance with the
foregoing procedures, a successor or additional Co-Trustee shall

be appointed by a court of competent jurisdiction upon the
petition of any Co-Trustee or of any person or persons interested
in the Trust.

e.

Successor Trustees:

A successor Co-Trustee

shall succeed as a Co-Trustee of this Supporting Organization
with the same conditions as are herein set forth.

f.

Appointments:

All appointments as to a

successor or additional Co-Trustee shall be in writing and
subject to the provisions of paragraph 3 of this Article III.

g.

Increase in Number of Co-Trustees:

Subj ect

to paragraph 3 of this Article III, in the event the number of
Co-Trustees is increased pursuant to paragraph 6 of this Article
III, additional Co-Trustees shall be appointed in accordance with

the terms of this paragraph 5 of Article III to fill any vacant
Co-Trustee or Co-Trustees position .or positions created by such

increase in the number of Co-Trustees and if the number of
Co-Trustees is reduced pursuant to paragraph 6 of this Article

III the applicable number of Co-Trustees shall be removed in
accordance with paragraph 5 (b) of this Article III.

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6.

BOARD OF TRUSTEES:

All Co-Trustees who are

currently serving as a Co-Trustee of this Supporting Organization

shall be members of the Board of Trustees. The Board of Trustees
may appoint a Chairperson to serve for a period designated by the

Board of Trustees.

The Board of Trustees may adopt application

forms and requirements, charitable qualification criteria, or
other regulations to govern administrative functions relating to
the operations of the Supporting Organization, provided that they

are consistent with the charitable purposes herein. The Board of

Trustees may establish separate subcommittees and delegate
specific duties and responsibilities to such subcommittees. The
Board of Trustees may expand or contract the number of members of

the Board of Trustees (to be appointed in accordance with
paragraph 5 of this Article III), but the Board of Trustees shall

at all times consist of not less than three (3) members nor more
than nine (9) members.

7.

LIABILITY AN INDEMNITY:

A Co-Trustee shall not

be liable for conduct that was in good faith and which the
Co-Trustees reasonably believed was in the best interests of the

Supporting Organization or not opposed to

the Support ing

Organization i S best interests or had no reasonable cause to
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believe the conduct was unlawful.

A Co-Trustee shall be

indemnified by the Supporting Organization for costs and damages

incurred as a result of an action or threatened actions with
respect to the Co-Trustee i s activities in connection with the
administration of this Supporting Organization.

Indemnification

shall be made according to the permitted standards under Idaho

law for such indemnification of charitable trustees.

The Co-

Trustees may carry such insurance coverage as they may deem
appropriate for insuring the Co-Trustees, officers and employees
for actions commenced or threatened against them.
'--", - ":'~~.'.

Notwi thstanding the foregoing, no payment shall be made

to or for the benefit of any Co-Trustee, officer or employee as

would subject this Supporting Organization to taxation under
Chapter 42 of the Internal Revenue Code.

8.

CONTROL:

At

no

time

shal i

the

Support ing

Organization be controlled, directly or indirectly, by one or
more disqualified persons, as defined in § 4946 of the Internal
Revenue Code, or other than foundat ion managers and other than
one or more of the Supported Organizations.

9.

REFERENCES TO SECTIONS:

Unless the context

clearly implies the contrary i all references to "§" or II §§ II
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(section or sections) are to sections of the Internal Revenue
Code of 1986, as hereafter amended, or corresponding provisions
öf future federal tax laws and the Internal Revenue Code.

ARTICLE IV

1.

AMENDMENTS:

This Agreement may be amended or

modified from time to time by the Grantors or the surviving
Grantor, by an instrument in writing, signed by the Grantors or
survi ving Grantor and delivered to the Trustee; provided however,

that no amendment shall authorize the Trustee to conduct the
affairs of this Supporting Organization in any manner or for any

purpose contrary to the provisions of Internal Revenue Code

§ 501 (c) (3) or that would disqualify this Supporting Organization
as a tax-exempt trust or prohibit donations to this Supporting
Organization from being deductible for tax purposes.

Upon the death of both Grantors, this Agreement and the

Supporting Organization hereby created are irrevocable; provided
however, the Trustee, acting alone, shall have the power to amend
this Supporting Organization for the purpose of ensuring that the
Supporting' Organization qualifies as a charitable organization to

which donations are deductible within the meaning of the Internal

Revenue Code.
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2.

SITUS:

This

Support ing

Organization

is

established and accepted by the Trustee under the laws of the
State of Idaho and the situs of the Supporting Organization is

Idaho.

All questions concerning the validity, construction and

administration

of

such

Support ing

Organization

shall
place

be

determined under such laws.

Provided however, the Trustee may

transfer the

situs,

including

transferring

the

of

administration to another jurisdiction (whether the place of
administration is within our without the State of Idaho), of the

Supporting Organization created hereunder without the necessity
... ~.." "';;.'
,":-:. :.":

of judicial proceedings or intervention; provided that the
Trustee has determined, in good faith, that the transfer would

facilitate the economic and convenient administration of such

Supporting Organization and would not materially impair the
interests of any beneficiary or potential beneficiary.
In the

event of such a change of situs, all questions concerning the

Supporting

Organization's

validity,

construction

and

administration shall be determined under the
jurisdiction to which situs is transferred.

laws of the

Provided however,

that no change in situs shall authorize the Trustee to conduct
the affairs of the Supporting Organization in any manner or for

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any purpose contrary to the provisions of Internal Revenue Code

§ 501 (c) (3) or that would disqualify the Supporting Organization
as a tax-exempt trust or prohibit donations to this Supporting
Organization from being deductible for tax purposes.

3.

HEADINGS:

The

paragraph

headings

are

for

convenience only and are not a part of this Trust Agreement and

shall not be used in interpreting or construing this Trust

Agreement.
4. INVALIDITY: If any provision of this Agreement is

deemed invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall not be affected thereby but

rather shall be enforced to the greatest extent permitted by
applicable law.

5.

ORIGINAL COUNTERPARTS:

This Agreement may be

executed through the use of multiple original counterparts.

IN WITNESS WHEREOF, the parties hereto have executed
this Agreement the day and year first above written.

Richard Sands

TRUST- 22

SANDS2470

APP-B-000045

Case 1:06-cv-00407-ECH

Document 122-4

Filed 08/21/2008

Page 46 of 47

Robert Sands

"Grantors"

Freddy H. Robinson

ç¡~tBi:¡
Wesley M. Stallings

II Co-Trustees"
.:;..:~::./.~:. ~. . ,..~

TRUST- 23

SANDS2471

APP-B-000046

Case 1:06-cv-00407-ECH

Document 122-4

Filed 08/21/2008

Page 47 of 47

SCHEDULE "A"

SCHEDULE II A II - i

SANDS2472

APP-B-000047