CLAUSES TO PROTECT YOUR CLIENTS (AND YOU)

Transcription

1 CLAUSES TO PROTECT YOUR CLIENTS (AND YOU) ALTON L. ABRAMOWITZ Partner Sheresky Aronson & Mayefsky, LLP 750 Lexington Avenue New York, New York (212) Facsimile: (212)

2 Waiver of Property Claims Except as provided to the contrary in this Agreement, each party waives any right which he or she may at any time have to a distributive award or an award of equitable distribution or a division of community property with respect to any property acquired by the other party either before or during the marriage, including without limitation any license, degree, career achievement or career potential, enhanced earning capacity, or business interest or goodwill of the other party, and each party agrees never to seek through court proceedings or otherwise a distributive award or an award of equitable distribution or a division of community property with respect to any property acquired by the other party either before or during the marriage. Non-Taxable Nature of Property Transfers The inter-spousal transfers and payments that are required to be made by virtue of the provisions of this Article are intended as tax-free transfers and payments incident to a divorce in accordance with I.R.C Accordingly, the parties acknowledge that all transfers and payments made pursuant to this Article are neither includible in the transferee's gross income for Federal, State or local income tax purposes nor deductible from the transferor's gross income for Federal, State, or local income tax purposes. Distributive Award In Lieu of Support, Default and Non-discharge in Bankruptcy 1. The Husband shall pay to or on behalf of the Wife Three Million Four Hundred and Eight Thousand, Eight Hundred and 05 / 100 ($3,408,800.05) Dollars as follows: (a) Upon the execution of the Agreement $100,000; (b) Within 90 days following execution, $1,083,333.33; (c) Within 120 days following execution, $1,083,333.33;

3 (d) Within 150 days following execution, $1,083,333.33; and (e) On the first of the month following execution of the Agreement and monthly thereafter on the first banking day of each month for a total of eighteen months, $3, In the event the Husband defaults in making any of the payments set forth above, upon notice of default and his failure to cure within the fifteen-day (15) period specified in Article XVI of this Agreement, the defaulted payment and any remaining payments under paragraph 1 shall accelerate and be immediately due and payable and the Wife s counsel may release to her and she may, without further notice, enter the Confession of Judgment for the unpaid balance, which Confession of Judgment is being delivered herewith to be held in escrow by the Wife s counsel. 3. The parties acknowledge that the payments set forth in Article III F 1 are to be made as and for a distribution of property under IRC 1041 and shall not be deductible to the Husband for income tax purposes nor taxable to the Wife. The parties further acknowledge that, but for these payments, the Wife would not be self-supporting, would be unable to contribute to the support of the Children to the extent provided for in the Agreement, and would require support from the Husband to maintain a standard of living for herself and the Children reasonably consistent with their needs and the pre-separation standard of living. Thus, although the payments are not taxable for income tax purposes, the parties acknowledge that they consider them support for bankruptcy purposes. As such, it is the parties intention that in any bankruptcy or similar proceeding that might be brought by or against the Husband, the payments to be made pursuant to this Article, however denominated herein, shall not be discharged in bankruptcy. Waiver of Maintenance/Alimony/Spousal Support The Wife acknowledges that on the basis of her ability to earn an income, the benefits derived by her pursuant to the Lease and the property to be transferred to her pursuant to the provisions of Article III of this Agreement, she can and will be able to provide adequately for her own support and maintenance, and she hereby relinquishes any and all claims and rights she may now or hereafter have against the Husband for

4 alimony, spousal support, or maintenance under the laws of the State of New York or of any other State or Territory of the United States or any other jurisdiction or country, and the Wife agrees never to seek through court proceedings or otherwise an award of alimony, spousal support, or maintenance against the Husband. Change in Tax Treatment of Maintenance/Alimony/Spousal Support Payments If for any reason (including, without limitation, changes in applicable law) the payments required pursuant to this Article are subsequently determined by any taxing authority to be non-deductible to the Husband in whole or in part, then the parties shall equitably adjust the amount of maintenance payable to reflect the changed tax treatment. The purpose of the adjustment will be to achieve a net cost to the Husband that is as nearly equal as possible to the net cost he would have incurred had there been no such determination, provided that under no circumstances should such an adjustment result in the Wife receiving a net after-tax benefit that is less than that which she would have received had the payments been deductible to the Husband and taxable to the Wife as contemplated by this Article. Waiver of Rights to Greater Child Support Notwithstanding anything contained in this Article or any other clause, paragraph or Article of this Agreement or of any statute presently in existence or which may be enacted in the future, the parties expressly waive the right to assert any right to recover the difference between what would be the precise basic child support obligation under the Child Support Guidelines and the child support arrangement set forth in this Stipulation, regardless of whether the Husband or the Wife would benefit from asserting such right. No overpayment of child support resulting therefrom or underpayment shall be recoverable nor shall any alleged underpayment or overpayment form the basis for any claim or cause of action by either party, or third parties claiming through or on behalf of either party, against the other.

5 Indemnification against Debts and Liabilities Except as provided to the contrary in this Agreement, any debt, liability or other obligation contracted or incurred by a party, whether before or after the date of this Agreement, shall be the sole responsibility and obligation of the party contracting for or incurring such debt, liability or other obligation, and each party agrees to indemnify the other party against any and all claims with respect to any such debt, liability or obligation. Indemnification against Business Debts and Liabilities The Husband hereby represents and warrants that the Wife is not a signatory, obligor or guarantor on or of any obligation of any business entity or organization of which the Husband is or has been an owner, shareholder, officer, director or employee. In the event the Wife is sued or sought to be made or is made accountable for any such obligation, regardless whether it is based upon any document which purports to represent the assets or liabilities of both parties and regardless of whether the Wife has signed any document pertaining to such obligation, the Husband shall indemnify the Wife and hold her harmless against any liability for such obligation, including reasonable attorneys fees and expenses. Releases Each of the parties has released and forever discharged, and by these presents does for himself or herself and his or her heirs, legal representatives, executors, administrators and assigns, release and forever discharge the other of and from all causes of action, claims, rights or demands whatsoever, at law or in equity, which he or she ever had or now has or can hereafter have against the other, by reason of any matter, cause or thing from the beginning of the world to the date of this Agreement, except any cause of action for divorce, separation or annulment and except further that nothing contained in this paragraph shall release or discharge either party hereto of or from any of such party's covenants, promises, agreements, representations, warranties or other undertakings or obligations set forth in other Articles of this Agreement.

6 Future Divorce and Survival of Agreement Nothing contained in this Agreement shall be construed to prevent either party from instituting any suit, action or other legal proceeding in the State of New York or any other jurisdiction for a divorce against the other by reason of facts which heretofore occurred or which may hereafter occur. In the event that an action, suit or other legal proceeding for divorce, separation or annulment shall be instituted at any time by either party against the other in the State of New York or in any other jurisdiction, it is agreed that: (a) Neither of the parties shall cause or request that any provision be inserted in the final judgment or decree of the court which shall be inconsistent with any of the provisions of this Agreement. (b) The terms and provisions of this Agreement shall be incorporated in and shall become a part of any such final judgment or decree in such divorce action. (c) This Agreement shall not be extinguished by merger as the result of incorporation in any such judgment or decree or otherwise, but shall in all events survive such judgment or decree and shall be binding upon the parties and enforceable separate and apart from and independent of any such judgment or decree. Legal Effect of Agreement The parties respective legal rights and obligations and the practical and legal effects of this Agreement have been fully explained to each of the parties by his or her respective counsel, and both parties acknowledge that this Agreement is a fair agreement and is not the result of any fraud, duress, coercion, pressure or undue influence exercised by either party upon the other or by any other person or persons upon either; that each party has sought and obtained independent legal advice from counsel of his or her own selection as set forth in the foregoing Article; that each fully understands the facts concerning their respective assets and incomes, and has been fully informed as to his or her legal rights and obligations; and that having

7 had such advice and with such knowledge, they clearly understand and assent to all the provisions hereof and each of them is signing this Agreement freely and voluntarily. Acknowledgment Disclosure Provided; Waiver of Rights to Additional Disclosure The parties are entering into this Agreement based upon financial statements which they exchanged prior to the execution of this Agreement and certain additional financial information exchanged during the course of their negotiations, including the Husband s Statement of Net Worth as of October 16, 1997, sworn to on October 23, 1997, the contents of which the Wife has relied upon in entering into this Agreement. Other than such statements, the parties are entering into this Agreement without the benefit of formal disclosure with respect to income, assets, property, and financial prospects of the other. The Husband represents that there are no undisclosed pending transactions of which he is aware that would materially change his net worth. The parties have been advised by their respective counsel of their right to compel disclosure (including, but not limited to, inspection of the other's business and personal books and records by accountants, appraisers or other investigators, conduct of depositions, and submission of written interrogatories). Each party acknowledges having been advised of his or her right to obtain additional information through exercise of such right, and each party acknowledges having instructed his or her counsel not to take any further steps in connection with discovery, inspection, investigation, appraisal or evaluation of the other's business or property. Defaults In the event that either party defaults with respect to any payment prescribed in this Agreement, or with respect to any other obligation imposed upon him or her under this Agreement, and such default is not remedied within fifteen (15) days after the sending of a written notice by certified mail or personal delivery to the defaulting party, simultaneously with a faxed copy sent to the attorneys who represented each party at the time of the execution of this Agreement, specifying such default, the defaulting party agrees to reimburse the other party for any and all expenses, costs, and attorneys fees resulting from or made necessary by the

8 bringing on of any suit or other proceeding to secure such payment or enforce any such obligation, provided such suit or other proceeding results in a judgment, decree, award, or order in favor of the non-defaulting party. In the event that either party shall institute a suit or other proceeding against the other to enforce any of the terms, covenants, or conditions of this Agreement, and after the institution of such action or proceeding and before judgment is or can be entered the allegedly defaulting party complies with such term or condition of the Agreement, the suit, motion, or proceeding shall be deemed to have resulted in a judgment, award, decree, or order in favor of the complaining party. Proceeding to Set Aside Agreement or Obtain Different Relief If either party commences an action or proceeding to set aside this Agreement in whole or in part or to have spousal support, child support, distribution of property or inheritance rights set in amounts other than as provided in this Agreement, and if such action or proceeding does not result in the party bringing such action or proceeding receiving at least a substantial part of the relief demanded, then that party shall pay for all of the other party s attorneys fees and costs incurred in defending against such action or proceeding. General Provisions 1. Paragraph Headings: The paragraph headings in this Agreement are for convenience purposes only and do not reflect any intent or agreement of the parties. 2. Binding on Successors: This Agreement and all the obligations and covenants hereunder shall inure to the benefit of and bind the parties hereto, their heirs, executors, administrators, legal representatives and assigns. 3. Merger: This Agreement and its provisions merge all prior agreements, if any, of the parties and is the complete and entire Agreement of the parties.

9 4. Governing Law: This Agreement shall be governed by and interpreted pursuant to the internal laws of the State of New York. 5. Implementation: Each of the parties hereto, without cost to each other, shall from time to time hereafter execute and deliver any and all further instruments and assurances, and perform any acts that the other party may reasonably request for the purpose of giving full force and effect to the provisions of this Agreement. 6. Amendment or Modification: Except as provided herein, no provision of this Agreement shall be amended or modified unless by agreement in writing duly subscribed and acknowledged with the same formality as this Agreement. 7. Voluntary Payments: Any payments in excess of the sums hereinabove specified voluntarily made by the Husband to the Wife at any time for her support, maintenance or otherwise, shall not alter the Husband s legal obligations hereunder nor create any precedent for the future. Such excess payments shall not be construed as proof or indication of the Husband s ability to make increased payments or of Wife s need thereof and they shall accordingly not be used in any action or proceeding for evidentiary purposes or otherwise. 8. Waiver: Any waiver by either party of, or failure on a particular occasion to enforce, any provision of this Agreement or any right hereunder shall not be deemed a continuing waiver and shall not prevent or stop such party from thereafter enforcing such right, and the failure of either party to insist in any one or more instance upon the strict performance of any of the provisions of this Agreement by the other party shall not be construed as a waiver or relinquishment for the future of such provision, and the same shall continue in full force and effect. 9. Possible Invalidity: In the event that any term, provision, paragraph or Article of this Agreement is declared illegal, void or unenforceable, same shall not affect or impair the other terms, provisions, paragraphs or Articles of this Agreement. The doctrine of severability shall be applied. The

10 parties do not intend by this statement to imply the illegality, voidness or unenforceability of any term, provision, paragraph or Article of this Agreement. 10. Independent Covenants: Each of the respective rights and obligations of the parties hereunder shall be deemed independent and may be enforced independently irrespective of any of the other rights and obligations set forth herein. 11. Notices: All notices pursuant to this Agreement shall be sufficient if sent to a party at his or her last known residence address by certified mail, return receipt requested, or by personal delivery. 12. Drafting: This Agreement shall not be construed more strictly against one party than the other merely by virtue of the fact that it has been prepared initially by counsel for one of the parties, it being recognized that both the Wife and the Husband and their respective counsel have had a full and fair opportunity to negotiate and review the terms and provisions of this Agreement and to contribute to its substance and form. 13. Counterparts: This Agreement may be executed in counterparts, which shall then be read together and shall constitute for all purposes a single, binding agreement. No Representations or Warranties NO REPRESENTATIONS OR WARRANTIES HAVE BEEN MADE BY EITHER PARTY TO THE OTHER OR BY ANYONE ELSE EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, AND THIS AGREEMENT IS NOT BEING EXECUTED IN RELIANCE UPON ANY REPRESENTATION OR WARRANTY NOT EXPRESSLY SET FORTH HEREIN. Waiver of Right to be Represented by Counsel The Husband/Groom acknowledges that he was provided with a copy of this Agreement prior to its execution; that he has had a full and fair opportunity to review this Agreement; that he has had a full and fair opportunity to comment upon this Agreement and to request to have corrections and changes made, and that those corrections and changes have been made; that he was given the opportunity to consult with and retain counsel of his own choosing; that he has been

11 urged and advised by the Wife/Bride and her attorneys to retain counsel prior to executing this Agreement; that he has freely decided not to do so and has refused to do so. Prenuptial Agreement Waiver of Palimony and Support Claims The parties acknowledge that they have, prior to the execution of this Agreement, cohabited together. Both parties have been further advised of a body of existing and/or developing law in some jurisdictions by which a cohabitant may acquire certain rights, whether denominated as equitable or contractual, express or implied. In consideration of the terms and provisions of this Agreement, each party waives any and all rights which might be asserted against the other under any legal or equitable theory presently in existence, or which might hereafter be recognized by the legislature or courts of any State, Territory, country or other jurisdiction. In waiving such rights, each party has considered the rights afforded to him or her under this Agreement and deems those rights to be of greater value to him or her than any speculative rights which might otherwise be asserted, and each party affirms that the provisions of this Agreement are fair, just and equitable. Each party acknowledges that neither has made any express or implied promises to support the other during their joint residence prior to their contemplated marriage or at any time prior to the execution of this Agreement. Each party waives any and all claims for support against the other relating back to any time prior to their marriage and each party waives all of his or her rights, if any, to share in any assets acquired by the other prior to the marriage, except as may be set forth in this Agreement. Upon the execution of this Agreement, any and all claims each party may have had against the other, arising out of their cohabitation, is and shall be waived. The parties recognize and acknowledge that this Agreement is and shall constitute the consideration for such a waiver, which shall be effective even in the event that the parties relationship terminates between the date of this Agreement and the projected marriage date.