Dea Spanos Berberian Petition

1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
A Limited Liability Partnership

2 Including Professional Corporations
ADAM F. STREISAND, Cal. Bar No. 155662
3 GOLNAZ YAZDCHI, Cal. Bar No. 279160
ALEXANDRA M. BANIS, Cal. Bar No. 294177
4 1901 Avenue of the Stars, Suite 1600
Los Angeles, California 90067-6055
5 Telephone: 310.228.3700
Facsimile: 310.228.3701
6 E mail [email protected]
[email protected]
7 [email protected]
8 Attorneys for Dea Spanos Berberian, Co-
Trustee of the Alex and Faye Spanos Family
9 Trust, dated January 27, 1998, as amended
and restated on June 28, 2007
10
11 SUPERIOR COURT OF THE STATE OF CALIFORNIA
12 COUNTY OF LOS ANGELES
13
14 In re the Case No.
15 Alex and Faye Spanos Family Trust, PETITION FOR ORDERS
dated January 27, 1998, as amended INSTRUCTING CO-TRUSTEES TO
16 and restated on June 28, 2007 MARKET AND SELL TRUST’S
INTEREST IN THE LOS ANGELES
17 CHARGERS AND TO EXERCISE
“COME ALONG RIGHTS”
18 PURSUANT TO CHARGERS
FOOTBALL COMPANY, LLC
19 OPERATING AGREEMENT
20 [PROB. CODE, §§ 17200, 1310(b)]
21 Date:
Time:
22 Dept.:
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SMRH:4814-4162-8373.18 PETITION FOR ORDERS INSTRUCTING CO-TRUSTEES
1 Pursuant to Probate Code section 17200, Dea Spanos Berberian (“Petitioner”), as
2 co-trustee of the Alex and Faye Spanos Family Trust, dated January 27, 1998, as amended
3 on December 8, 2003, December 4, 2006, January 19, 2007, and as amended and restated
4 on June 28, 2007 (the “Trust”), respectfully petitions this Court for instructions as set
5 forth below and based upon the allegations hereof:
6 I. TRUST’S BLEAK FINANCIAL PICTURE COMPELS CONCLUSION
7 THAT ITS INTEREST IN THE CHARGERS MUST BE SOLD
8 1. This Court should instruct Petitioner and her brother, Dean A. Spanos
9 (“Dean”) (individually a “Co-Trustee,” and collectively, the “Co-Trustees”), as the two
10 successor co-trustees of the Trust, to market and sell the Trust’s 100% interest in Chargers
11 Enterprises, LLC (“Chargers Enterprises”), a California limited liability company, which
12 owns a 36% interest (“Trust’s Interest in the Chargers”) in Chargers Football Company
13 (“Chargers Football”), a California limited liability company. Chargers Football is the
14 entity which owns and operates the “Los Angeles Chargers” (“Chargers” or the “Team”),
15 a National Football League (“NFL”) franchise. In other words, through its ownership of
16 Chargers Enterprises, the Trust owns a 36% interest in the Team. Petitioner further
17 requests that the Court instruct the Co-Trustees to exercise their “come along” rights in
18 order to compel the marketing and ultimate sale of 97% of the Team.
19 2. A sale of the Trust’s Interest in the Chargers is necessary. The Trust’s debts
20 and expenses exceed $353 million, assuming that the IRS ultimately agrees with the
21 valuation of assets and liabilities when it conducts its likely audit of the settlors’ estate tax
22 returns. The Trust has virtually no income and no liquidity: its annual debt service and
23 expenses currently exceeds income by more than $11 million.
24 3. The Co-Trustees have been covering the annual shortfall by borrowing more
25 money, including borrowing from new banks to pay off older bank loans. While the Co-
26 Trustees are failing to carry out their fiduciary duties of paying off debts and expenses—
27 instead borrowing increasingly more—they are also unable to carry out their duties to pay
28
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1 over $22 million in charitable pledges made by the settlors, or to make distributions to
2 beneficiaries.
3 4. All of these problems could be solved by selling the Trust’s Interest in the
4 Chargers. It is the only candidate for solving the problems, because the Trust’s Interest in
5 the Chargers comprises at least 83% of the assets of the Trust.
6 5. If this situation is allowed to continue there is an even more dangerous
7 problem. The banks which hold this debt may have the right to put the loans in default if
8 they become uncomfortable with the financial condition of the borrower, or the security.
9 The problem is even worse, because the Trust not only has its own mounting debt burden,
10 but the Trust also guarantees 100% of the $80 million debt owed by The Spanos
11 Corporation 1 to certain banks. It guarantees 100% even though the Trust owns only an 8%
12 interest in The Spanos Corporation. If the banks were to put the loans in default, that
13 would have significant negative impacts on The Spanos Corporation’s business. The
14 longer this problem continues and indeed worsens, the greater the risk the banks could take
15 such actions. Creating liquidity now will solve those problems once and for all.
16 6. Meanwhile, the Trust is liable for over $22 million pledged to charities by
17 the settlors that remains unsatisfied, without liquidity to pay the charities anytime soon, or
18 a plan in place to satisfy these obligations. Any one of these institutions could take actions
19 that would be costly to the Trust. Every day that passes increases the risks that the
20 charitable beneficiaries and the Spanos family legacy will suffer irreparable financial and
21 reputational damage.
22 7. Dean refuses to consider a sale of the Trust’s Interest of the Chargers,
23 insisting that the Co-Trustees continue to borrow more and more, and to force the charities
24 and the beneficiaries to wait for years and to “hope” while Dean speculates further on a
25 football team. Dean has failed to present any plan to address the Trust’s bleak financial
26
27
1
This entity is the Spanos’s main operating company for building and selling multifamily
28
projects.
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1 picture, because there is no other plan than the one urged by Petitioner. Dean simply
2 refuses to discuss it. When Petitioner suggested they retain an independent firm to assess
3 the situation and develop a plan, Dean refused. His plan is hope. But hope is not a
4 strategy and it ignores the Co-Trustees’ fiduciary duties to the beneficiaries.
5 8. Dean will likely contend that if he is only allowed to use his position as a
6 Co-Trustee to be a speculator (forcing Petitioner along despite their personal liability as
7 trustees), to double and triple down on bad decisions of the past, he can turn things around
8 because there are positive developments at the NFL level that should benefit the Chargers
9 as well. He also has support from other family members and beneficiaries (though not all).
10 But this is not the job of trustees of a trust, and moreover, any buyer of an NFL franchise,
11 which is a rare trophy asset, knows how to account for the positive developments Dean
12 cites in order to be the top bidder for the Team.
13 9. Petitioner believes the time is ripe for the Co-Trustees to sell the Trust’s
14 Interest in the Chargers. An interest in a sports team is a trophy asset, appealing to the
15 elite few who can afford it and who will pay a premium to say they are an owner of a
16 professional football team. They are rarely available for sale, and the price a buyer is
17 willing to pay is often not dictated by any economic metric. This is perhaps best
18 evidenced by the 2014 unprecedented $2 billion sale of the Los Angeles Clippers to former
19 Microsoft CEO, Steve Ballmer. (See Sterling v. Sterling (2015) 242 Cal.App.4th 185.)
20 10. Recent headlines reveal that billionaire Daniel Snyder is buying out his
21 minority owners of a 40.5% interest in the Washington football team for $875 million. 2 It
22 is widely reported that Amazon founder and former CEO, Jeff Bezos, is interested in
23 becoming an NFL owner, and with the Washington football team being sold to Snyder—
24 something that was reportedly of interest to Bezos—the Chargers could be a perfect
25
26
(John Keim, NFL clears way for Daniel Snyder to buy out Washington Football Team’s
2
27 other owners (March 24, 2021), ESPN

<https://www.espn.com/nfl/story/_/id/31127427/nfl-clears-way-daniel-snyder-buy-
28
washington-football-team-owners>.)
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1 opportunity. 3 Moreover, the NFL has very recently finalized major new media deals,
2 which Petitioner is informed and believes will certainly attract potential buyers. As of
3 March 18, 2021, the NFL finalized eleven-year media rights agreements, which will run
4 through 2033 and could be worth over $100 billion. 4 On information and belief, these
5 lucrative new media deals may entice potential buyers for the Chargers because NFL
6 teams share equally in the media revenue.
7 11. The Trust’s Interest in the Chargers must be sold so that debts can be
8 discharged, the hemorrhaging can stop, the speculation and risk can be eliminated, and the
9 beneficiaries can actually enjoy the benefit of their inheritance as the settlors intended.
10 12. Meanwhile, this entire dispute is in reality just a timing issue. As discussed
11 below, Dean has already irrevocably agreed in writing that he will retain investment
12 bankers to pursue a sale of the entire Team less than four years from now. Thus, in light of
13 the dire circumstances of this Trust, where waiting is not an option, the clear conclusion is
14 that this timetable should simply be moved up. That should and must happen now. In fact,
15 the Co-Trustees should exercise their “come along” rights (discussed below) to sell nearly
16 the entire Team now. There is no economic justification to refuse to do so, and the ever
17
18
19 (A.J. Perez, Jeff Bezos Linked to Washington Football Team Sales Talk (February 22,
3
2021) FOS Exclusive <https://frontofficesports.com/jeff-bezos-washington-football-

20 team/?utm_medium=email&utm_campaign=FOS%20PM%20Bezos%20Linked%20to%2
0WFT%20Sales%20Talk&utm_content=FOS%20PM%20Bezos%20Linked%20to%20W
21 FT%20Sales%20Talk+CID_35b776977dae3e13a27e1f61ac3d89be&utm_source=FOS%2
22 0Daily%20Newsletter&utm_term=according%20to>.)
23 Though the NFL has yet to confirm the total amount of the completed deals, the new
4
agreements renewed the NFL’s TV rights with all of its existing broadcast partners, such
24 as ViacomCBS, Fox, Comcast (which owns NBCUniversal), and Disney (which owns
ESPN and ABC), and also added Amazon Prime Video as an exclusive partner for its
25 Thursday Night Football package. For example, NBCUniversal paid $1.1 billion annually
26 for its previous package and will now pay about $2 billion, and “Amazon is paying about
$1 billion per year.” (Alex Sherman and Jabari Young, NFL finalizes new 11-year media
27 rights deal, Amazon gets exclusive Thursday Night rights (March 18, 2021) CNBC
<https://www.cnbc.com/2021/03/18/nfl-media-rights-deal-2023-2033-amazon-gets-
28
exclusive-thursday-night.html>.)
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1 mounting debts that impair the administration and distribution of this Trust make clear
2 there is no legal justification for continuing to operate the Trust like a Faustian bargain.
3 13. Petitioner attempted numerous times and numerous ways, including by
4 requesting and participating in a mediation with a retired presiding probate judge of the
5 Los Angeles Superior Court that failed, to resolve this dispute short of litigation.
6 Unfortunately, seeking instructions from the Court is the only option left.
7 II. STANDING, JURISDICTION, VENUE & AUTHORITY
8 14. Standing. Petitioner is a Co-trustee of the Trust and therefore has standing
9 to bring this Petition under Probate Code section 17200.
10 15. Jurisdiction and Venue. The principal place of administration of the Trust
11 is in California, therefore this Court has jurisdiction over the Trust pursuant to Probate
12 Code sections 17003, and 17004. Having jurisdiction over the Trust, this Court has
13 exclusive jurisdiction of this proceeding because it concerns the internal affairs of the
14 Trust. (Prob. Code, § 17000, subd. (a).) Venue in Los Angeles County is proper under
15 Probate Code sections 17002, subdivision (a), and 17005, subdivision (a)(1), because the
16 day-to-day activities of the Trust is carried out by Petitioner, as a Co-Trustee, through her
17 above-captioned counsel as her representatives, in Los Angeles County.
18 16. Legal Authority. The Probate Code authorizes a trustee to seek instructions
19 from the Court concerning the internal affairs of the Trust. (Prob. Code, § 17002, subd.
20 (b)(6).) Under Probate Code section 16000, a trustee has a duty to “administer the trust
21 according to the trust instrument...” (Prob. Code, § 16000.) Where a trust has more than
22 one trustee, each has a duty to participate in the administration of the trust and to take
23 reasonable steps to prevent a co-trustee from committing a breach of trust. (Prob. Code, §
24 16013.) Thus, when one co-trustee anticipates continued action by another co-trustee that
25 is contrary to the terms of the trust or in the best judgment of the co-trustee, it is
26 appropriate for the concerned co-trustee to petition for instructions from the Court in order
27 to prevent a co-trustee from committing a breach of trust. (See Prob. Code, § 17200, subd.
28 (b)(6).) Should the Court grant this Petition, it should make its orders directing the Co-
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1 Trustees to market and sell the Trust’s Interest in the Chargers and to exercise their “come
2 along rights” pursuant to Probate Code section 1310, subdivision (b), to prevent injury or
3 loss to the Trust estate, notwithstanding that an appeal may be taken, otherwise its orders
4 would be futile given that a sale of the Trust’s Interest in the Chargers is inevitable, and
5 time is of the essence to sell it now. (Prob. Code, § 1310, subd. (b).)
6 III. ALLEGATIONS MATERIAL TO PETITION
7 A. Family Background
8 17. Alexander G. Spanos (“Alex”), the son of Greek immigrants, was an astute,
9 self-made billionaire, who amassed considerable success as a prominent real estate
10 developer, and gained notoriety as the majority owner of the then-San Diego, and now Los
11 Angeles Chargers football team. In 1960, Alex founded A.G. Spanos Construction, Inc.
12 which grew to become one of the largest real estate developers in the country for multi-
13 family housing. In the mid-1980s, Alex purchased a majority interest in Chargers
14 Football, and eventually acquired 96% of the team. Alex was a generous philanthropist,
15 donating millions to various causes including education, medicine, the arts, and politics.
16 To the world Alex was a legendary businessman and part of an exclusive club of high-
17 profile sports team owners. But to his family, Alex was “Papou,” the patriarch of the
18 Spanos family, whose “greatest joy and source of pride was his family. His beloved wife
19 Faye, his four children, his 15 grandchildren and his 12 great-grandchildren always came
20 first.” 5
21 18. Alex and his wife of 70 years, Faye Spanos (“Faye”) (together sometimes
22 referred to as the “Settlors”), had four children: Petitioner, Dean, Alexandra Spanos Ruhl
23 (“Alexis”), and Michael A. Spanos (“Michael”) (together, the “Siblings”). Alex and Faye
24
25
26
(Spanos Family Statement on the Passing of Family Patriarch Alex Spanos (Oct 09,
5
27 2018) Chargers News <https://www.chargers.com/news/spanos-family-statement-on-the-

passing-of-family-patriarch-alex-spanos>.)
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1 died within two months of each other. Faye died on August 7, 2018 at 92 years old. Alex
2 died on October 9, 2018 at 95 years old.
3 B. The Estate Plan
4 19. With the intent of putting their family first, the Settlors established the Alex
5 and Faye Spanos Family Trust on January 27, 1998. They amended it on December 8,
6 2003, December 4, 2006, and January 19, 2007, before fully amending and restating it on
7 June 28, 2007. A true and correct copy of the operative Trust is attached hereto and
8 incorporated herein by reference as Exhibit 1. The Trust named Faye, Petitioner, and
9 Dean as co-trustees. (Ex. 1 [Trust, § 10.1].) Petitioner and Dean have acted as the sole
10 Co-Trustees since Faye’s death in 2018.
11 20. During the Settlors’ joint lifetimes, they were entitled to receive the net
12 income from the Trust estate. (Ex. 1 [Trust, § 5.1].) If the trustee(s) determined the net
13 income was insufficient, the Settlors were entitled to receive principal of the community
14 estate as necessary, in the trustee’s discretion, for the Settlors’ “proper health, pleasure, tax
15 planning, support and maintenance.” (Id. at § 5.2.) The Trust was fully revocable during
16 the Settlors’ joint lifetimes. (Id. at § 4.)
17 21. Because Alex died within 90 days of Faye, the Trust assets pass as though
18 neither Settlor survived the other. (Ex. 1 [Trust at § 20].) After certain specific bequests,
19 the Co-Trustees are thus required to divide the residue into equal shares, one share for each
20 of the Siblings, to be held in trust (“Siblings’ Trusts”). (Id. at § 6.9(D)-(E).) Pursuant to
21 Section 7.13 of the Trust, a Co-Trustee “may, in the Trustee’s discretion, defer such
22 distribution or division until six (6) months after the Settlor’s death.” (Id. at § 7.13.) In
23 addition, the Co-Trustees have the power,
24 [t]o withhold from distribution, in the Trustee’s discretion, at
the time for distribution of any property in any trust without
25 the payment of interest, all or any part of the property, if the
26 Trustee determines, in the Trustee’s discretion, that the
property may be subject to conflicting claims, to tax
27 deficiencies or to liabilities, contingent or otherwise.
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1 (Ex. 1 [Trust at § 7.19].) For the reasons discussed below, the Co-Trustees still have
2 neither divided the Trust assets nor funded the Siblings’ Trusts.
3 22. Each Sibling’s Trust is to be divided into a: (i) Generation Skipping Transfer
4 Tax (“GST”) Exempt and (ii) GST Non-exempt share. (Ex. 1 [Trust at § 6.9(E)(1)].)
5 “[D]uring the child’s lifetime [he or she shall receive] as much of the principal of that
6 [Sibling’s Trust] as the Trustee determines necessary to the proper health, education,
7 maintenance or support of the child.” (Id. at § 6.9(E)(4).) The Siblings and their living
8 issue are entitled to income (subject to a ceiling 6) from the GST Exempt trusts for health,
9 education, support or maintenance as determined by an “Independent Trustee.” (Id. at §
10 6.9(E)(2).) The Siblings are entitled to the greater of: (a) the net income of the Non-
11 exempt Trust; or (b) “a unitrust amount from gains that would otherwise be allocated to
12 principal of four percent (4%) of the net fair market value of the investment assets of the
13 Nonexempt Trust…” A true and correct copy of the Order Granting Petition for
14 Reformation and Modification of Trust Provision Due to Scrivener’s Error is attached
15 hereto and incorporated herein by reference as Exhibit 2.
16 C. The Trust Assets
17 23. By far, the most valuable asset of the Trust is the Trust’s Interest in the
18 Chargers, comprising an approximate 83% of the asset base of the Trust, based upon
19 estimated values as of September 30, 2020. The Trust also owns a 100% interest in A.G.
20 Spanos Construction, Inc. (“A.G. Spanos Construction”), which together with the Trust’s
21 Interest in the Chargers, brings the total to 93%. With certain other fractional interests in
22 entities related to A.G. Spanos Construction, the total is 95%. The remaining Trust assets
23 include certain residential real property and tracts of undeveloped land, certain notes
24 receivable from family members, cash and cash equivalents. Apart from the notes, none of
25
26 “…the discretionary distribution of income under this part (b) of subparagraph 2 shall be
6
limited to the lesser of: (i) the full GST Exempt Trust if the GST exemption allocated to a
27 child’s trust is under $5 million; or (ii) that percentage of the net income of the GST
Exempt Trust equal to what $5 million reflects to the initial funding value of the GST
28
Exempt Trust.” (Ex. 1 [Trust at § 6.9(E)(2)(b)].)
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1 the Trust assets generates any income nor is there any expectation that they will at any
2 time in the near or distant future.
3 D. The Trust’s Debt and Inability to Satisfy its Obligations
4
24. As of September 30, 2020, the Trust had the following liabilities:
5
Liabilities Amount
6
Accrued expenses $231,000
7
Estate tax payable $75,767,000
8
Advances from related entities and family $224,417,000
9
Long-term debt $30,173,000
10
Charitable pledges payable $22,500,000
11
TOTAL LIABILITIES $353,088,000
12
13 25. Debt specifically associated with the Trust’s Interest in the Chargers is
14 $164,778,931 of the total amount of $353,088,000.
15 26. The Trust’s estimated income receipts for fiscal year 2020 were
16 $400,000. The estimated income disbursements for fiscal year 2020 were
17 $11,400,000. The Trust’s estimated net loss (income disbursements in excess of income
18 receipts) for 2020 was $11,000,000.
19 27. Generally, it is estimated the Trust will suffer a net loss (income
20 disbursements in excess of income receipts) of approximately $11 million (or more) per
21 year based on the following:
22 / / /
23 / / /
24 / / /
25 / / /
26 / / /
27 / / /
28 / / /
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1
Estimated/Simplified Annual Income & Amount
2 Disbursements
3
Estimated Ongoing Income Receipts (excluding $400,000
4 potential income from Spanos affiliated entities) 7
5 Expenses (legal, accounting, etc. and subject to ($500,000)

potential significant increase in the future)
6
7 Expenses (real estate held directly by trust – taxes, ($650,000)
management, etc.)
8
Annual Debt Service (estimated interest payments) ($8,500,000)
9
Deferred Estate Tax (current interest only amount) ($1,750,000)
10
11 Estimated Annual Shortfall ($11,000,000)
12
28. Rather than seeking to monetize illiquid assets in order to pay debts and
13
liabilities, and make distributions to beneficiaries, the Co-Trustees have principally been
14
borrowing, including borrowing money from one bank to pay another. With an annual
15
shortfall that exceeds $11,000,000, the debt will just continue growing and the intended
16
beneficiaries will not only fail to realize any benefit from their inheritance, but will
17
continue to mortgage it away to the detriment of future generations. Meanwhile, the Trust
18
is so heavily concentrated in owning a minority stake in a professional football team that
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beneficiaries have no choice but to depend almost solely on the rise or fall of the Team.
20
29. There is no prospect that the Trust will have improved cash flow in the future
21
or anywhere near what would be needed to juggle its debts. It is likely the IRS will audit
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the estate tax returns. If the audit results in a greater estate tax, the Trust’s unsustainable
23
debt becomes only worse. In addition, long term debt held by third party banks matures
24
shortly in the amounts of $5,773,000 in fiscal year 2021, and $24,400,000 in fiscal year
25
2022. Similarly, while they currently pay interest on estate taxes owed, the Co-Trustees
26
27
7
This amount consists primarily of interest receipts from promissory notes due from the
28
Siblings with payment due in full on June 30, 2027.
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1 will need to make principal payments of about $7.8 million per year beginning in fiscal
2 year 2024. Maintaining the status quo is not an option.
3 E. Trust Provisions Relating to the Sale of Trust Assets
4 30. As discussed below, the Trust authorizes the Co-Trustees to sell Trust assets.
5 The Trust also contains certain provisions intended to limit the Co-Trustees’ liability,
6 including for retaining the Trust’s Interest in the Chargers. But this Petition is not about
7 what the consequences would be personally to the Co-Trustees for failing to act, or
8 whether the Trust’s Interest in the Chargers needs to be sold in order to diversify the Trust
9 estate. This Petition is about whether the Court agrees with Petitioner that the Co-Trustees
10 should act to protect the beneficiaries from these untenable circumstances because there is
11 simply no other way to service the Trust’s debts and expenses, or with Dean who wants
12 nothing done so that he can control the Chargers without interference from a non-family
13 owner who would be more demanding of accountability. As discussed above, this Court
14 has the authority to resolve an impasse between co-trustees and to instruct trustees to take
15 actions that are in the best interests of the beneficiaries. Petitioner asks for the Court’s
16 assistance to take actions she believes are critical to the protection of the beneficiaries and
17 continued administration of this Trust.
18 IV. LEGAL AUTHORITY
19 A. The Co-Trustees Have a Duty to Sell The Trust’s Interest in the Chargers And
20 Should be Instructed to Carry Out That Duty
21 31. There is sentimental value to the Spanos family from owning the Chargers.
22 It meant a lot to the Settlors, and to the family. But sentimentality is not the measure of
23 fiduciary obligation. Petitioner understands her responsibility to the Settlors, to the Spanos
24 family as beneficiaries, and to the charities that the Settlors also intended to benefit from
25 their largesse. Retaining the Trust’s Interest in the Chargers, notwithstanding
26 sentimentality, violates the Co-Trustees’ duty to administer the Trust according to the
27 instrument under Probate Code section 16000, their duty to exercise reasonably their
28
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1 discretion under Probate Code section 16080, and their duty to act “solely in the interest of
2 the beneficiaries” under Probate Code section 16002.
3 32. Generally, trustees have a duty to administer the Trust according to the trust
4 instrument and solely in the interests of the beneficiaries (Prob. Code, §§ 16000, 16002), to
5 act impartially (Prob. Code, § 16003), to avoid conflicts of interest (Prob. Code, §§ 16004-
6 16005), to preserve trust property and make trust property productive (Prob. Code, §§
7 16006-16007), to act with care and to prudently invest trust assets (Prob. Code, §§ 16040,
8 16045, et seq.), and to exercise their discretion reasonably (Prob. Code, § 16080). These
9 statutory duties apply, except to the extent that the trust instrument lawfully provides
10 otherwise. (Prob. Code, § 16000.) “A violation by the trustee of any duty that the trustee
11 owes the beneficiary is a breach of trust.” (Prob. Code, § 16400.)
12 33. The Trust contains various provisions intended to relieve the Co-Trustees of
13 the duty of diversification otherwise required by the Probate Code, and to immunize them
14 from personal liability for failing to do so. Under the Trust, the Co-Trustees have the
15 power:
16 To continue to hold any property, including shares of stock of
the Trustee under this agreement, and to operate at the risk of
17 the trust estate and not at the risk of Trustee, any property or
18 business received or acquired under this trust, so long as the
Trustee shall deem advisable…
19
(Ex. 1 [Trust at § 7.1].)
20
21 34. It also provides:
22 The Trustee is not compelled to sell assets or make acquisitions

as may be otherwise required by the rule directing fiduciaries
23 to diversify holdings provided that the decision as to the
retention or disposition of assets is not made wilfully [sic.], in
24 bad faith, and, in addition, in a manner that is contrary to the
25 provisions of this trust.
26 (Ex. 1 [Trust at § 7.24(A)].)

27
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1 35. With respect to the Chargers “components,” 8 the Trust attempts to “absolve”
2 the Co-Trustees of liability to the fullest extent permitted by law. (Ex. 1 [Trust at §
3 7.24(D)(1)-(2)].) The Trust further purports to provide a “complete waiver under
4 California Probate Law” of the Co-Trustees’ duties with respect to the Trust’s Interest in
5 the Chargers. (Id. at § 7.24(D)(2)-(3).) Notwithstanding the foregoing, Probate Code
6 section 16461 limits the extent to which a trust can purport to absolve trustees of liability.
7 It provides:
8 (a) Except as provided in subdivision (b), (c), or (d), the trustee
can be relieved of liability for breach of trust by provisions in
9 the trust instrument.
10
(b) A provision in the trust instrument is not effective to
11 relieve the trustee of liability (1) for breach of trust
committed intentionally, with gross negligence, in bad faith,
12 or with reckless indifference to the interest of the
13 beneficiary, or (2) for any profit that the trustee derives from
a breach of trust.
14
(Prob. Code, § 16461(b).) (Emphasis added.)
15
16
17
8
Paragraph D of Section 7.24 of the Trust provides:
18
The term “components” with respect to the San Diego
19 Chargers (which term is further defined in paragraph F of this
section 7.24) refers to all divisions, subsidiaries, associations,
20
assets, rights, title, interests, and property of whatever kind of
21 nature (real or personal) that is directly or indirectly involved
with the San Diego Chargers.
22
(Ex. 1 [Trust at § 7.24(D)].) Paragraph F of Section 7.24 continues as follows:
23
Reference to the San Diego Chargers shall include but not be
24
limited to Chargers Football Co., LLC; and Chargers
25 Associates, LLC. and all subsidiaries, associations, affiliations,
merged entities, transferees, partnerships, limited liability
26 companies, corporations, franchises, divisions, assignees,
27 successor and related entities that exist or may hereafter exist.
28 (Ex. 1 [Trust at § 7.24(F)].)

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1 36. Although settlors may modify some statutory duties imposed upon trustees,
2 the law does not permit a blanket waiver of all fiduciary duties because, in the absence of
3 any duties, there would be no trust:
4 “A trust is ‘a fiduciary relationship with respect to property,
subjecting the person by whom the title to the property is held
5 to equitable duties to deal with the property for the benefit of
6 another person, which arises as a result of a manifestation of
an intention to create it.’ (Rest.2d Trusts, § 2, p. 6.) ‘A trust is
7 created by a manifestation of intention of the settlor to create a
8 trust, trust property, a lawful trust purpose, and an identifiable
beneficiary.’ (Chang v. Redding Bank of Commerce (1994) 29
9 Cal.App.4th 673, 684[, 35 Cal.Rptr.2d 64].)”
10 (Presta v. Tepper (2009) 179 Cal.App.4th 909, 914.)
11 37. Further, the California Supreme Court has held that courts may override trust
12 provisions when it is shown that it is necessary to prevent loss or destruction of trust
13 property. (Adams v. Cook (1940) 15 Cal.2d 352.) The California Supreme Court
14 explained,
15 That a court of equity has the power to change the method
of administering a trust estate, when it is shown that such
16
a change is necessary to prevent loss or destruction of the
17 trust property, is well settled by the authorities. Pennington
v. Metropolitan Museum of Art, 65 N.J.Eq. 11, 55 A. 468; 65
18 Corpus Juris 792; In re Pulitzer’s Estate, 139 Misc. 575, 249
19 N.Y.S. 87; Mertz v. Guaranty Trust Co., 247 N.Y. 137, 159
N.E. 888, 57 A.L.R. 1114.
20
In the Pulitzer Estate, the deceased had by his will created a
21 trust whereby there had been delivered to trustees large issues
22 of stock in two publishing corporations, with directions to his
trustees to hold the stock and pay the dividends to his children,
23 the trust to continue during the lives of his two youngest sons,
and, upon their death, the testator directed that said stock
24
should be divided under varying conditions. No provision was
25 made in the testator’s will for a sale of the stock in any
manner or under any conditions. After the death of the
26 testator and during the lives of his two younger sons, an
27 application was made to the court for an order authorizing
the trustees to sell the stock in one of said publishing
28 corporations on the ground that the said publication had
-15-
1 during a number of years prior to said application been
conducted at a loss and that the same condition prevailed
2 at the time said application was before the court. After an
3 extended review of the authorities, the court held that it
had the power to authorize the sale of said stock, although
4 there was no express power given in the testator’s will,
5 empowering his trustees to make said sale.
6 (Id. at 358-359.) (Emphasis added.)

7 38. The Trust also provides that the Trust’s Interest in the Chargers:
8 SHALL BE GOVERNED BY CALIFORNIA

CORPORATIONS CODE REQUIREMENTS, IN THE SAME
9 MANNER AS THOUGH THE INTEREST IN THE SAN
DIEGO CHARGERS WERE OWNED BY A NON-TRUSTEE.
10
(Ex. 1 [Trust at § 7.24(D)(2)].) (Emphasis in original.)
11
39. However, even if the Trust could effectively substitute the Co-Trustees’
12
fiduciary duties under the Probate Code, for those under the Corporations Code, which it
13
cannot, this creates no advantage. As the Court of Appeal explains:
14
…waiver of corporate directors’ and majority
15 shareholders’ fiduciary duties to minority shareholders in
private close corporations is against public policy and a
16 contract provision in a buy-sell agreement purporting to
17 effect such a waiver is void.
18 (Neubauer v. Goldfarb (2003) 108 Cal.App.4th 47, 57.) (Emphasis added.) In addition,
19 under the Corporations Code, a limited liability company’s operating agreement shall not:
20 (14) Eliminate the duty of loyalty under subdivision (b) of
Section 17704.09, but the operating agreement may do any of
21 the following:
22
(A) Identify specific types or categories of activities that
23 do not violate the duty of loyalty, if not manifestly
unreasonable.
24
(B) Specify the number or percentage of members that
25
may authorize or ratify, after full disclosure to all
26 members of all material facts, a specific act or
transaction that otherwise would violate the duty of
27 loyalty.
28
-16-
1 (15) Unreasonably reduce the duty of care under subdivision
(c) of Section 17704.09.
2
3 (Corp. Code, § 17701.10, subd. (c)(14), (15).)
4 40. Under the current circumstances, it is a willful neglect of duty for the Co-
5 Trustees to continue on the current path; they must sell the Trust’s Interest in the Chargers.
6 The Trust explicitly states that the Siblings’ interests in the Trust “shall be considered
7 first; and, the interests of remainder beneficiaries shall be of lesser significance.” (Ex.
8 1 [Trust at § 6.13].) (Emphasis added.) Dean is not considering the interests of the
9 beneficiaries at all. The consequences are impossible to justify and can be averted only by
10 granting the Petition.
11 41. Where a trust has more than one trustee, each has a duty to participate in the
12 administration of the trust and to take reasonable steps to prevent a co-trustee from
13 committing a breach of trust. (Prob. Code, § 16013.) Thus, when one co-trustee
14 anticipates continued action by another co-trustee that is contrary to the terms of the trust
15 or in the best judgment of the co-trustee, it is appropriate for the concerned co-trustee to
16 petition for instructions from the Court in order to prevent a co-trustee from committing a
17 breach of trust. (See Prob. Code, § 17200, subd. (b)(6).) Moreover, under Probate Code
18 section 17206, the court has discretion “to make any orders and take any other action
19 necessary or proper to dispose of the matters presented by the petition...” Probate Code
20 section 1310, subdivision (b), provides as follows:
21 Notwithstanding that an appeal is taken from the judgment or
order, for the purpose of preventing injury or loss to a person or
22 property, the trial court may direct the exercise of the powers of
the fiduciary, or may appoint a temporary guardian or
23 conservator of the person or estate, or both, or a special
24 administrator or temporary trustee, to exercise the powers, from
time to time, as if no appeal were pending. All acts of the
25 fiduciary pursuant to the directions of the court made under this
subdivision are valid, irrespective of the result of the appeal. An
26
appeal of the directions made by the court under this subdivision
27 shall not stay these directions.
28
-17-
1 42. Petitioner requests that the Court exercise its authority under Probate Code
2 sections 17200, subdivision (b)(6), 17206, and 1310, subdivision (b), to instruct the Co-
3 Trustees to market and sell the Trust’s Interest in the Chargers, notwithstanding the fact
4 that an appeal may be taken so as to prevent injury or loss to the Trust estate given the
5 unique nature of the asset and the limited market of potential buyers that may be
6 eliminated should a potential sale be stayed for years until an appeal is resolved, and the
7 dire need for the Trust to generate liquidity in the immediate future to pay its debts and
8 liabilities.
9 B. Dean, as Manager of Chargers Football, is Estopped From Withholding
10 Consent
11 43. As explained above, the Trust owns a 100% interest in Chargers Enterprises,
12 which owns a 36% interest in Chargers Football. 9 Dean is not only a Co-Trustee of the
13 Trust but he is also the Manager of Chargers Football. Pursuant to the Operating
14 Agreement of Chargers Football, no non-manager member can sell its interest without the
15 Manager’s (i.e. Dean’s) written consent to transfer and to admit a substituted member.
16 Additionally, the Operating Agreement states that if members holding more than fifty
17 percent (50%) of the outstanding interests in Chargers Football agree to sell to third parties
18 unrelated to Chargers Football or its members, then they can require the remaining
19 minority members to sell their interests on the same terms. 10
20 44. Dean has already provided written consent of a sale of the Chargers at the
21 conclusion of the fifth season at the new SoFi Stadium (i.e., in less than four years),
22
23
24 The Trust owns 36% of Chargers Football, through its 100% membership interest in
9
Chargers Enterprises. The remaining 64% of Chargers Football is owned 60% by Spanos
25 family members (directly and through various trusts) and 4% by unrelated, third parties.
Petitioner is informed and believes that depending on the transaction others may wish to
26 sell their interests as well.
27 The foregoing rights to require others to participate in a sale are referred to as “Come
10
Along Rights.” The Come Along Rights exclude one of the minority owners that owns a
28
3% interest in the team.
-18-
1 subject of course to approval by the NFL. Specifically, in a letter dated November 8, 2019
2 to his siblings, Dean wrote:
3 Although there can be no assurance that a sale will actually be
consummated, no later than thirty (30) days following the
4 conclusion of our fifth (5th) season in the new SOFI stadium, I
5 agree, in my capacity as Manager and on behalf of the Company,
to retain an investment banking firm reasonably acceptable to
6 Dea, Michael and Alexis to market the sale of the Company, and
7 I will cooperate in such marketing effort in order to maximize
value for the benefit of all Members. I shall commence the
8 process to interview and identify qualified investment banking
firms to present to Dea, Michael and Alexis reasonably in
9 advance of the retention and arrange for meetings among the
10 parties as part of the engagement process. In the event that any
Member wishes to sell his or her interest in the Company as a
11 result of the above referenced process or at any other time, I
hereby provide my advance consent to such transaction subject
12
to the rules of the NFL regarding such sales and the first refusal
13 rights referred to in E. above.
14 A true and correct copy of the foregoing correspondence is attached hereto and
15 incorporated herein by reference as Exhibit 3.
16 45. Given Dean’s advance consent, he is thus estopped from taking any action as
17 Manager that would thwart a decision by this Court to instruct the Co-Trustees to proceed
18 with marketing and selling the Trust’s Interest in the Chargers, and he should be so
19 instructed. Even if Dean had not already consented, he would be precluded from seeking
20 to block the effectiveness of an order from this Court on this Petition. Dean’s conflict is
21 self-evident. Dean profits from his position as Manager and controlling owner of the
22 Chargers and has a vested self-interest in refusing a sale and turning a blind eye toward his
23 fiduciary duties as a Co-Trustee of the Trust. But under California law, when Dean “walks
24 into the boardroom” of Chargers Football, he wears his hat as a Co-Trustee of the Trust,
25 and he has to vote as though that were his only duty. (See Estate of Feraud (1979) 92
26 Cal.App.3d 717, 723.)
27 46. In Estate of Feraud, supra, 92 Cal.App.3d at p. 719-720, the trustees of a
28 testamentary trust appealed from a judgment surcharging them for unreasonably
-19-
1 compensating one of the trustees. At the time of decedent’s death, decedent owned all of
2 the outstanding stock of a California company which became a part of the corpus of the
3 trust. (Id. at 720.) Fred Yasukochi (“Yasukochi”) and John Armstrong (“Armstrong”)
4 served as co-trustees. (Id. at 719.) Yasukochi served as a director and president of the
5 company, personally handling the entire management of both production and sales. (Id. at
6 720.) Armstrong served as a director and secretary-treasurer, while handling the
7 company’s outside accounting. (Ibid.) Yasukochi and Armstrong appointed three outside
8 directors to the board. (Id. at 721.) At Yasukochi’s request, two of these three outside
9 directors were appointed by the board of directors “to study… the matter of providing him
10 with incentive compensation.” (Ibid.) The outside directors then approved such
11 compensation. (Ibid.)
12 47. Yasukochi and Armstrong submitted annual trust accounts to the probate
13 court, but the accountings contained nothing about the company’s situation and operations
14 except statements of total dividends and the trustees’ estimates of the market values of the
15 company’s stock. (Estate of Feraud, 92 Cal.App.3d at 721.) Years later, the trustees filed
16 a petition for instructions regarding retention of the company’s stock and the dividend
17 policy, which included financial statements, to which the beneficiaries objected. (Ibid.)
18 The trial court found Yasukochi’s company bonus to be “grossly unfair to the
19 beneficiaries” and unreasonable. (Id. at 722.) The trustees argued that the reasonableness
20 of Yasukochi’s compensation should be determined under the Corporations Code. (Ibid.)
21 The court disagreed and held that,
22 …the beneficial owners of the stock of the corporation in this
case were the beneficiaries of the three trusts. Yasukochi’s
23 bonuses had to be fair and reasonable as to them and not as to
24 the corporation, which was simply the device through which
the affairs of the three trusts were largely conducted.
25 Yasukochi was under a duty to these beneficiaries to
26 administer the three trusts, including their principal asset, the
Company, solely in their interests (Rest., 2d Trusts, s 170,
27 subd. (1); see also Scott on Trusts (3d ed. 1967) s 193.2, p.
1598), to use reasonable care and skill to make the trust
28 property productive (Rest., 2d Trusts, s 181), and to pay the net
-20-
1 income of the various trusts to the beneficiaries thereof. (Id. s
182.)
2
3 (Id. at 723.) The Court of Appeal affirmed and found “substantial evidence in support of
4 the trial court’s finding of unfairness and unreasonableness” and explained that Armstrong
5 should have known that the arrangement was “unfair and unreasonable to the beneficial
6 owners of the stock of the corporation namely, in this case the beneficiaries of the three
7 trusts, and particularly the life-income beneficiaries thereof.” (Id. at 724.)
8 48. The Court should thus instruct Dean that he is required to exercise his
9 fiduciary duties as a Co-Trustee of this Trust, and act consistent with the instructions of
10 this Court to engage a qualified investment banker now to market, and to thereafter sell,
11 the Trust’s Interest in the Chargers, and to exercise his Come Along Rights should it be
12 appropriate, notwithstanding any other interest or duty he may have.
13 C. Right of First Refusal and NFL Approval
14 49. The Co-Trustees’ ability to sell the Trust’s Interest in the Chargers is subject
15 to a right of first refusal (“ROFR”), pursuant to a Right of First Refusal Agreement, dated
16 June 1, 2002, as amended on June 17, 2015 (“Agreement”), between Chargers Enterprises
17 and the Siblings. A true and correct copy of the Agreement is attached hereto and
18 incorporated herein by reference as Exhibit 4. The terms of the Agreement require any
19 party to the Agreement who desires to sell all or any part of its interest in Chargers
20 Football to give notice to the other parties “setting forth the proposed transferee’s name, all
21 of the terms on which the Selling Party’s Interest is to be transferred and the purchase price
22 for such interest.” (Id. at 1, ¶ 1(a).) This can only be done after the interest is marketed
23 and an acceptable proposal to a transferee is reached. At that point, any of the Spanos
24 owners (i.e., the Co-Trustees or the Siblings), have a right to match the proposed offer.
25 (See id. at 2, ¶ 1(b).) The selling party may sell its interest to the original transferee, on the
26 original terms, within 120 days of the notice (subject to the requirements discussed above)
27 unless a party exercises his/her/its ROFR. (Ibid.) Accordingly, Petitioner requests that the
28
-21-
1 Court instruct the Co-Trustees to sell the Trust’s Interest in the Chargers, subject to the
2 Trust’s obligations to comply with the ROFR in the Agreement.
3 50. The Trust’s Interest in the Chargers may only be sold with the approval of
4 the NFL and consistent with the NFL Constitution. Petitioner requests that the Court
5 instruct that the sale be subject to and contingent upon NFL approval.
6 V. NOTICE
7 51. The following parties are or may be entitled to notice of this proceeding:
8 Name Relationship
9 Dean A. Spanos Son, Co-Trustee of the Trust, Beneficiary
10 7 Shoreline
Newport Coast, CA 92657
11
Alexander G. Spanos Grandchild, Beneficiary
12 130 Irvine Cove Circle
13 Laguna Beach, CA 92651
14 Dean Spanos II Great-grandchild, Beneficiary
130 Irvine Cove Circle
16
Leonidas Spanos (Leo) Great-grandchild, Beneficiary
17 130 Irvine Cove Circle
Laguna Beach, CA 92651
18
19 Theodore David Spanos Great-grandchild, Beneficiary
130 Irvine Cove Circle
21 John Spanos Grandchild, Beneficiary
22 224 Driftwood Road
Corona Del Mar, CA 92625
23
Jack Spanos Great-grandchild, Beneficiary
24 224 Driftwood Road
25 Corona Del Mar, CA 92625
26 Dea Spanos Berberian Daughter, Co-Trustee of the Trust,
1319 W. Lincoln Road Beneficiary
27 Stockton, CA 95207
28
-22-
1 Dimitrios S. Economou Grandchild, Beneficiary
6810 Chevy Chase Avenue
2 Dallas, TX 75225-2505
3
Taki Economou Great-grandchild, Beneficiary
4 6810 Chevy Chase Avenue
Dallas, TX 75225-2505
5
6 Aristotelis Economou “Telis” Great-grandchild, Beneficiary
6810 Chevy Chase Avenue
7 Dallas, TX 75225-2505
8 Alexandros S. Economou Grandchild, Beneficiary
9 6030 Huntingdale Circle
Stockton, CA 95219
10
Vasilios Economou “Vasili” Great-grandchild, Beneficiary
13 Markos Economou Great-grandchild, Beneficiary
6030 Huntingdale Circle
15
Stylianos Economou “Stelios” Great-grandchild, Beneficiary
Stockton, CA 95219
17
18 Aram Berberian Grandchild, Beneficiary
4236 Tsushima Court
20 Alexandra Spanos Ruhl Daughter, Beneficiary
21 7347 N. Pershing Avenue
Stockton, CA 95207
22
Adriana Ruhl Cox Grandchild, Beneficiary
23 57 Sir Francis Drake Blvd.
24 Ross, CA 94957
25 Benjamin Cox Great-grandchild, Beneficiary
57 Sir Francis Drake Blvd.
26 Ross, CA 94957
27
28
-23-
1 Emilia Cox Great-grandchild, Beneficiary
57 Sir Francis Drake Blvd.
2 Ross, CA 94957
3
Vivian Cox Great-grandchild, Beneficiary
4 57 Sir Francis Drake Blvd.
Ross, CA 94957
5
6 Nicoletta Ruhl Grandchild, Beneficiary
10401 Wilshire Blvd., #406
7 Los Angeles, CA 90024
8 Nicolas Ruhl Grandchild, Beneficiary
9 1528 W. Lincoln Road
Stockton, CA 95207
10
William Ruhl Great-grandchild, Beneficiary
11 1528 W. Lincoln Road
13 Phillip Ruhl Grandchild, Beneficiary
10787 Wilshire Blvd., #804
14 Los Angeles, CA 90024
15
Alexandra Ruhl Grandchild, Beneficiary
16 4148 Wabash Avenue
San Diego, CA 92104
17
18 Michael Spanos Son, Beneficiary
7259 N. Pershing Avenue
20 Michael Spanos II Grandchild, Beneficiary
21 21030 Pacific City Circle, #3123
Huntington Beach, CA 92648
22
Christopher Spanos Grandchild, Beneficiary
23 27334 Bonterra Loop, Apt. 213
24 Wesley Chapel, FL 33544
25 Andreas Spanos Grandchild, Beneficiary
14335 Sherman Blvd.
26 Marina, CA 93933
27
28
-24-
1 Thomas Spanos Grandchild, Beneficiary
3675 T Street, Unit 334
2 Sacramento, CA 95816
3
Ana Spanos Grandchild, Beneficiary
4 21020 Pacific City Circle, #2114
Huntington Beach, CA 92648
5
6 The Spanos Foundation Remote Contingent Beneficiary.
Alex and Faye Spanos Family Foundation Non-profit charitable organization
7 10100 Trinity Parkway, 5th Floor
Stockton, CA 95219
8
9
A. Virtual Representation by Each Grandchild or Minor and Unborn Issue
10
52. Each grandchild of Settlors virtually represents the interests of the minor
11
children and unborn issue of that grandchild. The interests of each great-grandchild or
12
more remote issue arise with respect to the GST Exempt portion of each of the Siblings’
13
Trusts because they may receive distributions from the Independent Trustee in certain
14
circumstances. (Ex. 1 [Trust at § 6.9(E)(2)(b)].) In addition, each Sibling holds a limited
15
power of appointment with respect to the GST Exempt portion of each of the Siblings’
16
Trusts, which they may exercise in favor of their issue. (Id. at § 6.9(E)(5).)
17
53. With respect to the GST Non-exempt portion of each of the Siblings’ Trusts,
18
the Siblings have a general power of appointment exercisable on death among the issue of
19
that Sibling and creditors of the estate of that Sibling to appoint the principal and accrued,
20
but unpaid income, of the GST Non-exempt portion of each of the Siblings’ Trusts. (Ex. 1
21
[Trust at § 6.9(E)(5)(b)].) To the extent a Sibling does not exercise his or her general
22
power of appointment, the Siblings Trust shall be distributed, by right of representation,
23
“to the then living issue of that deceased child, by right of representation, and held,
24
administered, and distributed as provided in Paragraph F of this Section 6.9...” (Id. at §
25
6.9(E)(5)(c)].) Accordingly, the great-grandchildren and more remote issue are only
26
contingent remainder beneficiaries of the Siblings’ GST Non-exempt Trusts, because their
27
28
-25-
1 interests are dependent on how and to what extent the Siblings exercise his or her general
2 power of appointment, as well as other unknowns.
3 54. The following are the names of the parents (i.e., the grandchildren of
4 Settlors) who are the parents of the minor great-grandchildren beneficiaries. As indicated,
5 each grandchild listed below should be determined by this Court to virtually represent his
6 or her minor children and unborn issue:
7
Name of Parent (Grandchild of Settlors) Name of Minor Great-Grandchild(ren)
8 of Minor Great Grandchildren Whom the Grandchild Virtually
9 Represents Together with Their Unborn
Issue
10
Alexander G. Spanos Dean Spanos II
11 Leonidas Spanos
12 Theodore David Spanos
Unborn Issue
13
John Spanos Jack Spanos
14 Unborn Issue
15
Dimitrios S. Economou Taki Economou
16 Aristotelis Economou “Telis”
Unborn issue
17
18 Alexandros S. Economou Vasilios Economou “Vasili”
Markos Economou
19 Stylianos Economou “Stelios”
Unborn issue
20
21 Aram Berberian Unborn issue
22 Adriana Ruhl Cox Benjamin Cox

Emilia Cox
23 Vivian Cox
24 Unborn issue
25 Nicoletta Ruhl Unborn issue

26 Nicholas Ruhl William Ruhl
Unborn issue
27
28
-26-
1 Phillip Ruhl Unborn issue
2 Michael Spanos II Unborn issue
3
Christopher Spanos Unborn issue
4
Andreas Spanos Unborn issue
5
Thomas Spanos Unborn issue
6
7 Ana Spanos Unborn issue
8
9 55. Probate Code section 15804 states:
10 15804. Notice in case involving future interest of
beneficiary
11
12 (a) Subject to subdivisions (b) and (c), it is sufficient
compliance with a requirement in this division that notice be
13 given to a beneficiary, or to a person interested in the trust, if
notice is given as follows:
14
15 (1) Where an interest has been limited on any future
contingency to persons who will compose a certain class upon
16 the happening of a certain event without further limitation,
notice shall be given to the persons in being who would
17
constitute the class if the event had happened immediately
18 before the commencement of the proceeding or if there is no
proceeding, if the event had happened immediately before
19 notice is given,
20
(2) Where an interest has been limited to a living
21 person and the same interest, or a share therein, has been
further limited upon the happening of a future event to the
22 surviving spouse or to persons who are or may be the
23 distributees, heirs, issue, or other kindred of the living person,
notice shall be given to the living person,
24
(3) Where an interest has been limited upon the
25 happening of any future event to a person, or a class of persons,
26 or both, and the interest, or a share of the interest, has been
further limited upon the happening of an additional future
27 event to another person, or a class of persons, or both, notice
shall be given to the person or persons in being who would take
28 the interest upon the happening of the first of these events.
-27-
1 (b) If a conflict of interest involving the subject matter of
the trust proceeding exists between a person to whom notice is
2 required to be given and a person to whom notice is not
3 otherwise required to be given under subdivision (a), notice
shall also be given to persons not otherwise entitled to notice
4 under subdivision (a) with respect to whom the conflict of
5 interest exists,
6 (c) Nothing in this section affects any of the following:
7 (1) Requirements for notice to a person who has

requested special notice, a person who has filed notice of
8 appearance, or a particular person or entity required by statute
9 to be given notice.
10 (2) Availability of a guardian ad litem pursuant to

Section 1003.
11
(d) As used in this section, “notice” includes other papers.
12
13 56. The interests of each grandchild of Settlors and their minor and unborn
14 issue are aligned with respect to the relief requested in this Petition. Accordingly,
15 providing notice to each of the grandchildren on their own behalf and on behalf of
16 their minor and unborn issue provides virtual representation and satisfies the notice
17 requirements applicable to each such minor great-grandchild and more remote issue.
18
VI. PRAYER
19
WHEREFORE, Petitioner prays for an Order as follows:
20
1. That the Court grant this Petition and find notice proper;
21
2. That the Court instruct Co-Trustees Dea Spanos Berberian and Dean A.
22
Spanos jointly to engage a qualified investment banker on commercially reasonable terms
23
to make all reasonable efforts to market for sale the Trust’s 100% interest in Chargers
24
Enterprises, or Chargers Enterprises’ 36% interest in Chargers Football, as may be
25
appropriate;
26
3. That the Court instruct Co-Trustees Dea Spanos Berberian and Dean A.
27
Spanos to consider and evaluate, in good faith, any and all offers to purchase the Trust’s
28
-28-
1 36% ownership interest in the Chargers presented to them, including by the qualified
2 investment banker, and take steps necessary to negotiate offers, and enter into a purchase
3 and sale agreement, as may be appropriate;
4 4. That the Court instruct Co-Trustees Dea Spanos Berberian and Dean A.
5 Spanos to sell the Trust’s 100% interest in Chargers Enterprises, or Chargers Enterprises’
6 36% interest in Chargers Football, as may be appropriate, to a qualified purchaser and on
7 terms endorsed by the Trust’s investment banker to be engaged in accordance with these
8 instructions, subject to any right of first refusal restrictions contained in the ROFR
9 Agreement, as amended, between Chargers Football and the Settlors’ children, and subject
10 to and conditioned upon NFL approval in accordance with the NFL Constitution;
11 5. That the Court instruct Dea Spanos Berberian and Dean A. Spanos to
12 exercise their Come Along Rights pursuant to the Operating Agreement of Chargers
13 Football, as it may be appropriate should any other member of Chargers Football elect to
14 sell his/her/its membership interest(s) such that more than fifty percent (50%) of the
15 outstanding membership interests of Chargers Football agree to sell their interests;
16 6. That the Court instruct Dean A. Spanos to take all necessary actions,
17 including voting to approve the sale of the Trust’s membership interests, delivering proper
18 notices, consenting to the sale of the Trust’s 36% ownership interest in the Chargers to the
19 transferee on the terms in the offer accepted by the Co-Trustees, and fulfilling all
20 obligations under the applicable agreements (including making all reasonable and good
21 faith efforts to obtain the consent of the NFL), to authorize and facilitate the sale the
22 Trust’s 36% ownership interest in the Chargers in good faith;
23 7. That the Court instruct Co-Trustee Dean A. Spanos that he is estopped from
24 denying his consent, as Manager of Chargers Football, to a sale of the Trust’s Interest in
25 the Chargers pursuant to the Court’s Order hereunder;
26 8. That the Court instruct Co-Trustee Dean A. Spanos that he shall take all
27 actions necessary and appropriate to carry out this Court’s instructions to effectuate the
28
-29-
1 marketing and sale of the Trust’s Interest in the Chargers notwithstanding any other right,
2 duty or obligation he may have in connection with the Chargers;
3 9. That the Court instruct Dean A. Spanos to provide the information
4 reasonably necessary to facilitate any offers from potential buyers that the qualified
5 investment banker deems legitimate;
6 10. That the Court instruct Dea Spanos Berberian and Dean A. Spanos to take all
7 actions consistent with this Order notwithstanding any appeal, pursuant to Probate Code
8 section 1310, subdivision (b), the court finding that such order is necessary to prevent loss
9 or injury to the Trust; and
10 11. For other and further relief that the Court deems just and proper.
11
12 Dated: March 31, 2021
13 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP
14
15 By
16 ADAM F. STREISAND
17 Attorneys for Dea Spanos Berberian, Co-Trustee
18 of the Alex and Faye Spanos Family Trust, dated
January 27, 1998, as amended and restated on
19 June 28, 2007
20
21
22
23
24
25
26
27
28
-30-
EXHIBIT 1
AMENDED AND RESTATED ALEX AND FAYE SPANOS FAMILY TRUST
This AMENDED AND RESTATED DECLARATION OF TRUST is executed this ...._____

-2, ,1,"> --,
·-·
day of L1:...'h.,;:, ,. , 2007 by A.G. SPANOS (also known as ALEX SPANOS, ALEX G.
,,,I'?
i/
SPANOS~ or ALEXANDER G. SPANOS, and also referred to herein as 11 Husband11 ), and FAYE
SPANOS (also referred to herein as 11Wife11), residents of San Joaquin County, State of
California, hereinafter referred to as the 11 SettlorsU, and FAYE SPANOS, DEAN A. SPANOS,
and DEA SPANOS BERBERIAN, hereinafter referred to as the 11Trustees11 • This Amended
and Restated Declaration of Trust amends and restates in its entirety the ALEX AND FAYE
SPANOS FAMILY TRUST executed by Husband and Wife, as Settlers, and A.G. Spanos, as
Trustee, on January 27, 1998, which was amended by Settlers on December 8, 2003 by
the First Amendment, on December 4, 2006 by the Second Amendment, and on January
19, 2007, by the Third Amendment. Settlers hereby amend and restate said ALEX AND
FAYE SPANOS FAMILY TRUST in full, as set forth herein, pursuant to the powers reserved
to them pursuant to Article TENTH of said Trust.
As used herein, the terms "Trustee" and "Trustees" shall refer to whoever is serving
as trustee, whether it is in the plural or singular, unless the context indicates otherwise.
1. TRUST NAME
This trust shall be known as the 11 ALEX AND FAYE SPANOS FAMILY TRUST11 1 the
"AMENDED AND RESTATED ALEX AND FAYE SPANOS FAMILY TRUST", the "ALEX AND
FAYE SPANOS FAMILY TRUST, as amended and restated", or such other appropriate
designation.
Exhibit 1, Page 32
AMENDED AND RESTATED ALEX AND FAYE SPANOS FAMILY TRUST
Table of Contents
1. TRUST NAME ................................................ 1
2. SETTLORS' FAMILY ............................................ 2
3. . TRUST ASSETS ............................................... 2
4. POWER TO ALTER, AMEND OR REVOKE ............................. 4
5. DISTRIBUTION DURING JOINT LIFE OF SETTLORS ..................... 5

5.1. Payments of Net Income .................................... 5
5.2. Payments of Principal ...................................... 5
5.3. Spouses' Duties Regarding Community Property Received ............ 6
5.4. Payments to Incapacitated Spouse ........ _....................... 6
6. DISTRIBUTION UPON DEATH OF SETILORS .......................... 7

6.1 Deceased Settlor's Expenses ................................. 7
6.2 Tangible Personal Property .................................. 8
6.3. Division Into Shares Upon Death of Deceased Settlor ............... 8
A. Composition of Trust A (Survivor's Trust) ................... 9 )
B. Composition of Trust B (Marital Trust) ..................... 9
C. Rules Applicable to Trust B ............................ 10
D. Composition of Trust C (Exemption Trust) .................. 12
6.4 Payments to Surviving Settlor From Trust A (Survivor's Trust} ......... 12
A. Payments of Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
B. Payments of Principal ................................ 13
C. Trustee's Power to Pay Principal ........................ 13
6.5 Distribution of Trust A on Death of Surviving Settlor ................ 13
6.6 Payment to Surviving Settler From The Marital Trust ............... 15
A. Payments of Net Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
B. Trustee's Power to Pay Principal ........................ 15
6;7 Distribution of the Marital Trust on Death of Surviving Settlor ......... 16
6.8 Payments to Surviving Settlor From Trust C (Exemption Trust) ........ 17
A. Payments of Income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
B. Payments of Principal ................................ 18
6.9 Distribution of Trust Con Death of Surviving Settler ................ 18
A. Limited Power of Appointment ......................... 18
B. Personal Residential Property .......................... 19
C. Pre-Residuary Pecuniary Gifts .......................... 21
D. Division Into Shares for Children and Issue ................. 23
E. Separate Share Trusts for Children .............. ·......... 23
F. Separate Share Trusts.for Grandchildren or More Remote Issue ... 31 )
. i.
Exhibit 1, Page 33
6.10 Contingent Disposition .................................... 36
6.11 Meaning of Education ..................................... 37
6.12 Exchange of Property by Surviving Settler ....................... 37
6.13 Primacy of Beneficiary Interests .............................. 38
7. POWERS OF TRUSTEE ........................................ 40

7 .1 Hold and Operate ........................................ 40
7 .2 To Deal with and Protect Trust Property ........................ 40
7.3 To Trade, Invest and Reinvest ............................... 41
7 .4 Securities ............................................. 41
7.5 Power to Employ Agents and Advisors ......................... 42
7.6 Division into Shares ...................................... 42
7. 7 Payments to a Beneficiary Under Age Twenty-Five {25) Years ......... 43
7 .8 No Segregation: Separate Accounts ........................... 44
7.9 Accounting ............................................ 44
7.10 To Determine Principal and Income ........................... 45
7 .11 Notice to Trustee of Births, Etc ............. ; ................. 46
7 .12 Use of Insu ranee and Retirement Benefits . . . . . . . . . . . . . . . . . . . . . . . 4o
7.13 Deferral of Division or Distribution of Trust Assets ................. 46
7 .14 Tax Matters and Decisions ................................. 47
7.15 Termination Where Share is Small ............................ 51
7 .16 Power to Lend to Settlor's Probate Estate ....................... 51
7 .17 Power to Purchase Property from Settlor's Probate Estate ............ 51
7 .18 Release of Powers ....................................... 51
7 .19 Power to Withhold Payment if Conflicting Claims Arise .............. 51
7 .20 Savings and Bank Accounts ................................ 52
7.21 Power to Engage in Partnership Business ....................... 52
7 .22 Compensation for Trustee Services ............................ 53
7 .23 S Corporation Stock ....................... ~ .............. 54
7 .24 Non-Diversification and Alteration of the Standard of Care Respecting Spanos
Business Interests ....................................... 57
7 .25 Special Investment Provisions ............................... 64
7 .26 Power To Borrow and Guarantee ............................. 64
7 .27 Compliance with Business Agreements and Amendments ............ 65
7 .28 Limitation Unitrust or Annuity Trust Conversion ................... 65
8. SPENDTHRIFT PROVISIONS ..................................... 67
9. TERMINATION .............................................. 67.
10. DESIGNATION OF TRUSTEES AND OFFICE OF TRUSTEE ................ 69

10.1 Designation of Trustees Other Than for Trusts for Children or Their Issue . 69
10.2 Designation of Trustees of Trusts for Children or Their Issue .......... 73
't-:/ .jj.
Exhibit 1, Page 34
10.3 Independent Trustee ...................................... 83
10.4 Co-Trustees ............................................ 85
10.5 No Bond Required, Except as Expressly Designated ................ 85
10.6 Lack of Trustee; Change in Situs ............................. 85
10.7 Resignation Procedure .................................... 86
10.8 Successor Corporation .................................... 86
10.9 Powers of Successor Trustees and Acts of Prior Trustees ............ 86
10.10 Majority Voting ......................................... 87
11. SIMULTANEOUS DEATH ....................................... 88
12. RESIDENCE ................................................ 88
13. ANTI-CONTEST ............................................ .- . 89
14. ESTATE AND DEATH TRANSFER TAXES ............................ 90
15. SITUS OF TRUST ............................................. 91
16. DEFINITION OF TERMS ........................................ 91
17. SETTLOR1S RETENTION OF RIGHTS IN POLICY ....................... 92

C)
18. UNENFORCEABLE PROVISIONS DISREGARDED ...................... 93
19. CONFLICTS REGARDING PERSONAL EFFECTS PROVISIONS .............. 93
20. NINETY -DAY SURVIVORSHIP REQUIREMENT ........................ 93
21. MEDIATION AND ARBITRATION .................................. 94

21.1 Mediation ............................................ 94
21.2 Binding Arbitration ....................................... 96
. iii.
)
Exhibit 1, Page 35
2. SETTLORS' FAMILY
Settlers declare that they are married and have four (4) living children, all of whom
are adults, and whose names are DEAN A. SPANOS ("DEAN"), MICHAEL A. SPANOS
("MICHAEL"), DEA SPANOS BERBERIAN ("DEA"), and ALEXANDRA SPANOS RUHL
("ALEXANDRA"). Neither Settler has any other children, living or deceased. Neither Settler
has any genetic material on deposit with anyone or anywhere.
3. TRUST ASSETS
The Settlers declare that all assets that have previously been assigned, delivered,
transferred or conveyed to the Trustee continue to be held as part of the trust estate. The
term "trust estate" shall include all property that has been or which may hereafter be
assigned, delivered, transferred or conveyed to the Trustee. The Trustees agree to hold,
/ '
administer, and distribute the trust estate, including such other property as may later
. become subject to this Trust, under the terms and conditions as hereinafter set forth
without change of its community or separate property character.
Any person shall have the right at any time to add to this Trust, whether before or
after the death of the Settlers, by transferring to the Trustee, property either by gift,
assignment, bequest or devise, and, if so added, such additional property, upon its receipt
and acceptance by the Trustee, shall become a part of the trust estate.
It is the Settlers' intention that all community property transferred to this trust and
the proceeds thereof (hereinafter referred to as 11community estate 11 ) shall retain its character
as community property during the joint lifetimes of the Settlers, subject only to the terms
and conditions of this instrument. Similarly, it is the Settlers' intention that all separate
Exhibit 1, Page 36
property of either spouse and the proceeds thereof (hereinafter referred to as 11separate
estate") shall retain its character during the joint lifetimes of the Settlers, subject also to all
the terms and conditions of this instrument. All property subject to this trust instrument is
referred to as 11the trust estate11 and shall be held, administered and distributed as provided
herein.
Any power reserved to Settlers to alter, amend, modify, or revoke this trust, in whole
or in part, is held by the Settlers during their joint lifetimes in their capacity as managers of
the community property as to the community estate, subject to all restrictions imposed by
law on their management of the community property. In no event shall the powers granted
to the Trustee under this instrument during the joint lifetimes of Settlors be more extensive
than those powers possessed by Husband and Wife under the provisions of California
Family Code Sections 1100 and 1102. If the trust is revoked, this community property C_)
shall be returned to Settlers as their community property and not as the separate property
of either or both Settlers. This limitation shall terminate on the death of either Settler.
Settlers may transfer other property to the Trustee, to be held pursuant to this
instrument, and when transferring property to the Trustee, Settlers shall indicate the status
of that property, whether community, separate of either of them, or otherwise. Settlers
declare that any property held in joint tenancy title as between Settlers is community
property and shall not pass by right of survivorship. This declaration is effective even if title
has not been transferred to this trust. Settlors further declare that all real and personal
property that would otherwise be subject to administration under a probate proceeding
/
3
Exhibit 1, Page 37
upon the death of a Settler is a part of the trust estate regardless of whether or not record
title has, in fact, been transferred to the Trustee.
4. POWER TO ALTER. AMEND OR REVOKE
During the lifetime of both Settlers, the community property in the trust estate may
be revoked in whole or in part by either Settler. The power of revocation shall be exercised
by written notice delivered to the other Settler and to the Trustee. In the event of such
revocation, the community estate or the revoked portion shall revert to both Settlers as their
community property. During the lifetime of the Settler who placed any of his or her
separate property into the trust estate, that Settler may revoke as to his or her separate
property, in whole or in part. A Settlor may not revoke as to the separate estate of the
other Settlor. In the event of a revocation by a Settler as to his or her separate estate, such
property shall r~vert to that Settler. This trust may not be amended or altered during the
lifetime of both Settlors except by the written agreement of both of them. An exercise of
the power of amendment substantially affecting the duties, rights, and liabilities of the
Trustee shall be effective only if agreed to by the Trustee in writing. From and after the
death of the first spouse to die, none of the trusts established under this instrument may be
amended, altered, or revoked by any person, except that the Surviving Settlor may alter,
amend, or revoke the Survivor's Trust in whole or in part. The holder of a Power of
Attorney may amend or revoke this trust only in accordance with the terms and conditions
of the Power of Attorney and provided further the power to amend or revoke trusts is
specifically granted in the Power of Attorney.
Exhibit 1, Page 38
5. DISTRIBUTION DURING JOINT LIFE OF SETTLORS
()
5.1. Payments of Net Income
During the joint lifetimes of the Settlors, the Trustees shall pay to Settlers, as
co-managers of the community estate owned by Settlors, or shall apply for their benefit, the
net income of the trust estate, in quarter-annual or more frequent installments. With the
consent of both Settlors, the net income may be retained and accumulated in the trust for
subsequent distribution to the Settlers, or for their benefit, whenever desired by the
Settlors. During the joint lifetimes of the Settlers, the Trustee shall also apply to either
Settlor, or shall apply for his or her benefit, the net income of that Settlor•s separate estate
in quarter-annual or more frequent installments. With the consent of the applicable Settlor,
the net income of that Settler's separate estate may be retained and accumulated.in the
trust for subsequent distribution to that Settlor, or for his or her benefit, whenever desired ()
by that Sett Ior.
5.2. Payments of Principal
If the Trustee considers net income from the community estate to be insufficient, the
Trustee shall pay to the Settlers, or apply for the benefit of the Settlers, as much of the
principal of the community estate as is necessary in the Trustee's discretion for the Settlers•
proper health, pleasure, tax planning, support and maintenance. At the written request of
the Settlor who transferred a separate estate to the trust, the Trustee shall pay to him or her
so much of the principal of the separate estate established by him or her as he or she shall
request. Distributions of principal to or on behalf of Settlors shall be made in a liberal
manner and the rights of remainder beneficiaries shall be of secondary importance.
)
5
Exhibit 1, Page 39
5.3. Spouses' Duties Regarding Community Property Received
The spouse receiving payments of community property income and principal under
this instrument shall have the same duty to use such income and principal for the benefit
of Settlers as he or she has with respect to any other community property.
5.4. Payments to Incapacitated Spouse
If at any time, either in the Trustee•s discretion or as certified in writing. by two
licensed physicians, either spouse has become physically or mentally incapacitated,
whether or not a court of competent jurisdiction has declared him or her mentally ill,
incompetent, or in need of a conservator, the Trustee shall pay to the other spouse or apply
for the benefit of either Settler first from the community estate, and then equally from the
separate estates of both Settlors the amounts of net income and principal necessary in the
Trustee•s discretion for the proper health, support, and maintenance of both Settlers in
accordance with their accustomed manner of living at the date of this instrument, until the
incapacitated Settlor, either in the Trustee's discretion or as certified by two licensed
physicians, is again able to manage his or her own affairs, or until the earlier death of either
Settlor. The non-incapacitated spouse may also withdraw from time to time accumulated
trust income and principal of community property. Income and principal from community
property so paid or withdrawn shall be held and administered as community property by
the non-incapacitated spouse. Any income in excess of the amounts applied for the benefit
of the Settlers shall be accumulated and added to principal of the community estate or the
separate estate, as the case may be.
(Document continued on next page.)
Exhibit 1, Page 40
6. DISTRIBUTION UPON DEATH OF SETTLORS
Upon the death of the first Settler to die ("Deceased Settlor11 ), the Trustee shall hold,
administer and distribute the trust estate as follows:
6.1 Deceased Settler's Expenses
On the Deceased Settler's death, the Trustee shall pay out of the trust estate, the
Deceased Settler's debts outstanding at the time of his or her death; the federal or state
estate and inheritance taxes including interest and penalties attributable to the trust estate
arising because of the Deceased Settler's death; the last illness and funeral expenses of the
Deceased Settler; attorney's fees; and other costs incurred in administering the Deceased
Settler's interest in the trust estate. Any payments for estate, inheritance or other death
taxes shall be charged as directed by this trust agreement. Payments for last-illness,
(' ___ )
funeral and other administrative expenses and costs not taken as deductions on the Federal ,/
Estate Tax Return for the estate of the Deceased Settler shall be charged to the Exemption
Trust, and if the Exemption Trust is insufficient, to the Marital Trust (charged first to the
non-exempt Marital Trust until exhausted), provided, however, that administrative costs
and expenses allocable to the SuNiving Settler's share of the community property
administered in the Deceased Settler's estate shall be charged to the other assets in the
SuNivor's Trust. Payment of any of the Deceased Settler's debts shall be made
proportionately from the property of the trust estate as such property shall be liable for the
debts so that the community estate of the Deceased Settler and separate estate of the
Deceased Settler each bear its own proportionate share of the debts of the Deceased
Settler.
\ )
7
Exhibit 1, Page 41
6.2 Tangible Personal Property
Upon the death of the Deceased Settlor, the Trustee shall distribute all household
belongings, jewelry, furnishings, artwork, collections, personal effects, and other
non-business tangible personal property of the Deceased Settlor to the Survivor's Trust
(Trust A), for the benefit of the Surviving Settlor, as shall be established pursuant to Section
6.3 below, except for any such items that the Deceased Settlor has directed to be disposed
of in another manner on his or her death in a signed writing written and maintained by the
Deceased Settlor during his or her lifetime, to the extent that such writing is not revoked
before his or her death. If such an unrevoked signed writing exists, the items of tangible
personal property included in that list shall be disposed of as set forth therein. If the signed
writing contains any item that does not exist on the death of the Deceased Settler (or is not
( owned by the Deceased Settlor or the trust estate on the Deceased Settlor's death), the gift
of that item shall fail and shall not be made. If a recipient on the list to whom distribution
· · is to be made on the death of the Deceased Settler is not living at the death of the
Deceased Settler, the items to be distributed to that recipient on the death of the Deceased
Settler shall be distributed in accordance with any alternate disposition for that gift set forth
in the list, but if the list does not contain an alternate disposition, then it shall be added to
the Survivor's Trust (Trust A), as shall be established pursuant to Section 6.3 below. Gifts
of tangible personal property under this Section 6.2 shall not be reduced by or charged with
estate tax or GST tax.
6.3. Division Into Shares Upon Death of Deceased Settlor
The Trustee shall distribute the gifts as set forth in Section 6.2. The Trustee shall
'-c=:I
1
then divide the balance of the trust estate (including not only property held hereunder on
Exhibit 1, Page 42
the date of death but also such other property as may be added hereto by the Deceased
Settler's Will or from any other source) into three (3) trusts, designated as Trust A, Trust B
and Trust C, and also referred to as the Survivor's Trust (Trust A), the Marital Trust (Trust
B) and the Exemption Trust (Trust C).
A. Composition of Trust A (Survivor's Trust)
Trust A (Survivor's Trust) shall consist of the Surviving Settler's separate
property assets administered under this trust and the community property interest and
quasi-community property interest, if any, of the Surviving Settler in the trust assets, and
shall be held and administered pursuant to Sections 6.4 and 6.5.
B. Composition of Trust B (Marital Trust}
Trust B (Marital Trust) shall consist of the smallest fractional share of the
residual trust estate that, if taken as a federal estate tax marital deduction, will entirely (
eliminate (or reduce to the maximum extent possible) any federal estate tax on the
Deceased Settler's death, after taking into account all factors relevant to this estate tax
objective, including but not limited to:
1. All deductions and exclusions claimed and allowed in
determining the estate tax payable by reason of the Deceased Settler's death.
2. The net value of all other property (whether or not it is given
under this instrument and whether it passes at the time of the Deceased Settler's death or
has passed before the Deceased Settler's death to or in trust for the Surviving Settler) that
is included in the Deceased Settler's gross estate and qualifies for the federal estate tax
marital deduction. If the Surviving Settler disclaims any property that would otherwise
\
qualify for the federal estate tax marital deduction, this disclaimer shall be disregarded. j
Exhibit 1, Page 43
3. All credits and applicable credit amounts allowed for federal
estate tax purposes other than any credit allowable under Internal Revenue Code section
2011, unless and to the extent that death tax would be payable to the state or states
regardless of the federal credit, as long as no credit is taken into account that results in
disallowance of the marital deduction.
The term "residual trust estate" means the trust estate remaining after
payment of all pecuniary gifts, expenses of administration, debts, and death taxes that are
properly chargeable against the residue of the trust estate.
C. Rules Applicable to Trust B (Marital Trust)
In establishing the fraction under Paragraph B of this Section 6.3, values as
finally determined for federal estate tax purposes shall be used, and the following shall be
/ \
excluded from the numerator and denominator of this fraction and allocated only to the
Exemption Trust:
1. Any assets that are not eligible for the federal estate tax marital
deduction; and
2. Any assets for which a credit for foreign death taxes is allowed
under the federal estate tax law applicable to the Deceased
Settler's estate, unless there is insufficient other property to
fully fund the Marital Trust.
The Trustee shall select property to satisfy such a fractional share of the trust
estate in cash or in kind, or partly in each, with assets aUocated in kind, valued at their net .
fair market values on the date or dates of allocation to the MaritalTrust.
10
Exhibit 1, Page 44
The Marital Trust shall be established as two separate shares. One of those
two shares shall be a trust called the GST Exempt Marital Trust, which shall include the
balance of the Deceased Settler's GST exemption under Internal Revenue Code Section
2631(a), as amended, not applied to the Exemption Trust nor otherwise allocated by the
Executor. The other of those two shares is to be called the Non-Exempt Marital Trust,
which shall consist of non-exempt GST property.
The terms "Trust B", "Marital Trust" and "Marital Trusts" are synonymous,
and shall refer to both the GST Exempt Marital Trust and the Non-Exempt Marital Trust.
The Marital Trust shall be held, distributed and administered in accordance with Sections
6.6 and 6.7 of this instrument. The GST Exempt Marital Trust shall have a zero inclusion
ratio for GST purposes.
All state death taxes as a result of the death of the Deceased Settler
attributable in whole or in part to the Marital Trust shall be paid from the Exemption Trust
(regardless of any other provision either in this instrument or by applicable law allocating·
administration expenses to the contrary). All unclaimed administration expenses of the
Deceased Settler's trust estate shall be charged against trust accounting income and not
against principal of the trust estate of the Deceased Settler provided that said allocation
does not disqualify or reduce the estate tax marital deduction. The term "unclaimed
administration expenses" means administration expenses described in Internal Revenue
Code Sections 2053(a) and 2053(b), that are eligible for deduction on the federal estate
tax return, but that are not deducted on that return because they are claimed as income tax
deductions.
)
11
Exhibit 1, Page 45
It is intended that the distribution to the Marital Trusts qualify for the marital
deduction allowable under the Internal Revenue Code, as amended, and this instrument
shall be construed accordingly. The Deceased Settler explicitly empowers the person
responsible for filing the federal estate tax return to determine whether to make the election
by IRC Section 2056(b)(7), as amended, as to the Marital Trust in light of the
circumstances existing at the time the election may be made. Any power including powers
specifically granted by this instrument to allocate receipts and disbursements between
principal and income may not be exercised so as to deny the Surviving Settler income to
which the Surviving Settler would otherwise be required to receive under applicable rules
pertaining to the estate tax marital deduction.
D. Composition of Trust C (Exemption Trust)
Trust C (Exemption Trust) shall consist of the balance of the trust estate of
the Deceased Settler, to be held, administered and distributed in accordance with Sections
6.8 and 6.9.
6.4 Payments to Surviving Settler From Trust A (Survivor's Trust)
During the lifetime of the Surviving Settler, the Trustee shall hold, administer and
distribute Trust A as follows:
A. · Payments of Net Income
The Trustee shall pay to or apply for the benefit of the Surviving Settler the
net income of Trust A quarter-annually or at more frequent intervals. With the consent of
the Surviving Settler, the net income may be retained and accumulated in the trust for
subsequent distribution to the Surviving Settler, or for his or her benefit, whenever desired
by the Surviving Settlor.
12
Exhibit 1, Page 46
B. Payments of Principal
In addition, ths Trustee shall pay to the Surviving Settlor as much of the
,principal of Trust A as the Surviving Settlor may request by written instrument delivered to
the Trustee.
C. Trustee's Power to Pay Principal
In addition, the Trustee shall pay to or apply for the benefit of the Surviving
Settler from time to time as much of the principal of Trust A as the Trustee deems
necessary or desirable for the benefit of the Surviving Settler.
6.5 Distribution of Trust A on Death of Surviving Settlor
On the Surviving Settlor's death, the Trustee shall pay out of the trust estate the
Surviving Settler's debts outstanding at the time of his or her death; the federal and state
estate and inheritance taxes, including interest and penalties attributable to the trust estate
arising because of the Surviving Settlor's death (to be charged as provided in this
instrument); the last illness and funeral expenses of the Surviving Settler; attorney's fees;
·and other costs incurred in administering the Surviving Settlor's interest in this trust. The
Survivor's Trust shall not bear estate tax applicable to IRC Section 2044 property.
On the death of the Surviving Settlor, the Trustee shall distribute the balance then
remaining, if any, of Trust A (including both principal and any accrued or undistributed
income) to such one or more persons and entities, including the Surviving Settlor's estate,
and on such terms and conditions, either outright or in trust, as the Surviving Settlor shall
appoint by a Will or acknowledged instrument (executed before or after the death of the
Deceased Settler) specifically referring to and exercising this general power of appointment.
)
13
Exhibit 1, Page 47
Estate taxes applicable to the GST Exempt Marital Trust shall be charged against the Non
Exempt Marital Trust until exhausted. Settlers expressly waive IRC Section 2207A to the
extent it would otherwise allocate estate tax to Section 2044 property.
The Deceased Settler requests, but does not require, that the Surviving Settler
provide direct payments for the heath and medical care assistance of DANNY SPANOS, a
brother of Husband. This request does not establish any obligation and no obligation exists
for the providing of such care or assistance. The decision to provide funds or not is a non-
fiduciary, unfettered choice.
Upon the death of the Surviving Settlor, all household belongings, jewelry,
furnishings, artwork, collections, personal effects, and other non-business tangible personal
property of the Surviving Settler not effectively appointed by the Surviving Settler shall be
( cistributed outright and free of trust, in equal shares by value, to the children of Settlors
who are then living, except for any such items that the Surviving Settlor has directed to be
disposed of in another manner on his or her death in a signed writing written and
naintained by the Surviving Settlor during his or her lifetime, to the extent that such writing
is not revoked before his or her death. If such an unrevoked signed writing exists, the items
of tangible personal property included in that list shall be disposed of as set forth therein.
1..: the signed writing contains any item that does not exist on the death of the Surviving
Settler (or is not owned by the Surviving Settlor or the trust estate on the Surviving Settler's
ceath), the gift of that item shall fail and shall not be made. If a recipient on the list to
whom distribution is to be made on the death of the Surviving Settler is not living at the
death of the Surviving Settlor, the items to be distributed to that recipient on the death of
14
Exhibit 1, Page 48
the Surviving Settlor shall be distributed in accordance with any alternate disposition for
that gift set forth in the list, but if the list does not contain an alternate disposition, then
the gift shall be distributed in equal shares outright and free of trust to the children of
Settlors who are then living. Gifts of tangible personal property under this paragraph of
Section 6.5 shall not be reduced by or bear estate or GST taxes.
The balance of Trust A not effectively appointed by the Surviving Settler in the
foregoing manner shall be added to Trust C.
6.6 Payment to Surviving Settler From The Marital Trust
distribute the Marital Trust as follows:
A Payments of Net Income
The Trustee shall pay to or apply for the benefit of the Surviving Settler the ()
entire net income of the Marital Trust quarter-annually or at more frequent intervals.
8. Trustee's Power to Pay Principal
Settlor from time to time as much of the principal of the Marital Trust as the Trustee deems
necessary for the proper health, education, support or maintenance of the Surviving Settlor.
In making any payments of principal from the Marital Trust to or for the. benefit of the
Surviving Settler, the Trustee shall take into consideration, to the extent the Trustee deems
advisable, any income or other resources of the Surviving Settler outside of these trusts,
known to the Trustee, and reasonably available for that purpose. Distributions of principal
15
Exhibit 1, Page 49
shall be taken first from the Non-Exempt Marital Trust until exhausted, and then from the
GST Exempt Marital Trust.
6. 7 Distribution of the Marital Trust on Death of Surviving Settler
Any accrued but unpaid income from the Marital Trust on the death of the Surviving
Settlor shall be added to Trust A, to follow the disposition of Trust A as provided in Section
6.5.
On the death of the Surviving Settlor, the balance then remaining, if any, of the
principal of the Marital Trust shall be distributed to such persons consisting of the issue of
Settlers and/or any charity and/or qualified interest as provided in Internal Revenue Code
'
Section 2055, as amended, to which charitable deduction is allowed for federal estate tax
purposes, including but not limited to the Alex and Faye Spanos Family Foundation and/or
a charitable trust (lead or remainder) for the benefit of any such charity and the issue of
Settlers, as the Surviving Settler may appoint by a Will or acknowledged instrument
(executed before or after the death of the Deceased Settler) specifically exercising this
limited power of appointment. With respect to such limited power of appointment,
distribution shall be on such terms and conditions (either outright or in trust) as the
Surviving Settlor may appoint as aforesaid. To the extent said power of appointment is not
effectively exercised, the principal balance of the Marital Trust shall be distributed as stated
in Section 6. 9; but the Trustee in that event shall first (regardless of whether or not the
power of appointment is exercised) pay out of the principal of Trust B, the last illness and
funeral expenses and other obligations incurred for the Surviving Settler's support in the
event that Trust A is insufficient to satisfy said liabilities, and any estate or inheritance
16
Exhibit 1, Page 50
taxes attributable to Trust B by reason of the Surviving Settlor•s death or the making of the
QTIP election on the death of the Deceased Settler. The foregoing taxes, expenses and
obligations shall be charged first against the Non-Exempt Marital Trust until exhausted, and
thereafter to the Exempt Marital Trust without right of reimbursement or recourse by the
Non-Exempt Trust under Internal Revenue Code Section 2207 A, as amended. or otherwise;
provided, however, that no such taxes or expenses shall be charged against any trust,
value, or share with respect to which the charitable deduction is allowed for federal estate
tax purposes.
6.8 Payments to Surviving Settlor From Trust C (Exemption Trust)
distribute Trust C as follows:
A. Payments of Income
The Trustee shall pay to or apply for the benefit of the Surviving Settlor such
sums from the net income of Trust C as the Trustee determines appropriate for the health,
education, support and maintenance of the Surviving Settlor, after taking into consideration
such other income and resources as the Trustee determines appropriate; provided,
however, that with respect to any S Corporation shares that are allocated to Trust C, the
Trustee shall pay to or apply for the benefit of the Surviving Settlor, annually or at more
frequent intervals, the entire net income respect to said S Corporation shares that are
allocated to Trust C. Undistributed net income shall be added to the principal of Trust C.
(Document continued on next page)
17
Exhibit 1, Page 51
8. Payments of Principal
Settlor from time to time as much of the principal of Trust C as the Trustee deems
necessary for the proper health, education, support or maintenance of the Surviving Settlor.
In making any payments of principal from Trust C to or for the benefit of the Surviving
Settlor, the Trustee shall take into consideration, to the extent the Trustee deems advisable,
any income or other resources of the Surviving Settlor outside of these trusts, known to the
Trustee, and reasonably available for that purpose. Payments of principal shall not be
made to or for the benefit of the Surviving Settlor under this Paragraph 8, for the purposes
stated, until the principal of the Survivor's Trust (Trust A) and the principal of the Marital
Trust {Trust 8), to the extent feasible, and other property under control of the Surviving
Settlor, have been exhausted.
6. 9 Distribution of Trust C on Death of Surviving Settlor
On the death of the Surviving Settlor, the balance of the Exemption Trust (Trust C)
shall be distributed as follows:
A. Limited Power of Appointment
On the death of the Surviving Settlor, the balance then remaining, if any, of
Trust C shall be distributed to such persons consisting of the issue of Settlors and/or any
charity and/or qualified interest as provided in Internal Revenue Code Section 2055, as
amended, to which charitable deduction is allowed for federal estate tax purposes,
including but not limited to the Alex and Faye Spanos Family Foundation, and/or a
charitable trust (lead or remainder) for the benefit of any such charity and the issue of
18
Exhibit 1, Page 52
Settlors, as the Surviving Settlor may appoint by a Will or acknowledged instrument
(executed before or after the death of the Deceased Settler) specifically exercising this
limited power of appointment. With respect to such limited power of appointment,
distribution shall be on such terms and conditions (either outright or in trust) as the
Surviving Settlor may appoint as aforesaid. To the extent said power of appointment is not
effectively exercised, the balance of Trust C shall be distributed as hereinafter set forth in
this Section 6.9.
8. Personal Residential Property
On the death of the Surviving Settlor, to the extent such property has not
been effectively appointed under the provisions of Trust A, Trust 8, or Trust C, the Trustee
shall distribute the Settlors' personal residential property (as defined herein), as follows:
1. STELLA GRAHAM ("STELLA"), who is a sister of Husband, C)

shall have the right to reside at the residence at 1548 West Lincoln Rd., Stockton, CA, rent
free, except as provided herein, for the balance of her life. This right shall end upon the
earlier of STELLA's death or cessation of occupancy as her actual, principal residence. The
payment of all real estate taxes, property insurance, and major expenditures (such as a new
roof or other item of a capital nature) with respect to said property are to be charged
equally to the residuary trusts. All other expenses attributable to said property, including
but not limited gardening, utilities, repairs and ordinary maintenance, and pool service shall
be paid by STELLA as a condition of this gift. This gift under this subparagraph 1 shall not
be charged with estate taxes or other death taxes. If STELLA is not living at the death of
the Surviving Settler, this gift shall lapse and not be made. On the death of STELLA or
)
19
Exhibit 1, Page 53
when her right to live in the residence or her occupancy of said property as her principal
residence otherwise ends under this subparagraph 1, this property shall be held,
administered, and distributed in accordance with subparagraph 3 of this Paragraph B.
2. SOPHIA CHIACHIANIS ("SOPHIA"), who is a god-sister of
Husband, shall have the right to reside at the residence at 2263 Lido Circle, Stockton, CA
95207, rent free, except as provided herein, for the balance of her life. This right shall end
upon the earlier of SOPHIA's death or cessation of occupancy as her actual, principal
residence. The payment of all real estate taxes, property insurance, and major expenditures
(such as a new roof or other item of a capital nature) with respect to said property are to be
charged equally to the residuary trusts. All other expenses attributable to said property,
including but not limited gardening, utilities, repairs and ordinary maintenance, and pool
service shall be paid by SOPHIA as a condition of this gift. This gift under this
subparagraph 2 shall not be charged with estate taxes or other death taxes. If SOPHIA is
not living at the death of the Surviving Settlor, this gift shall lapse and not be made. On
the death of SOPHIA or when her right to live in the residence otherwise ends under this
subparagraph 2, this property shall be held, administered, and distributed in accordance
with subparagraph 3' of this Paragraph B
3. All other personal residential real property of the Settlers
(which premises currently consist of the following: 1528 West Lincoln Road and 1533
West Lincoln Road, Stockton, CA) shall be distributed equally and outright to each child of
Settlors. If a child of Settlers does not survive the Surviving Settlor, his or her share shall
be allocated, in trust, to the issue of that child then living, by representation, under the
20
Exhibit 1, Page 54
trust otherwise provided. Reference to personal residential property is not limited to the (1
properties in the particular list, but refers to properties used by Settlers and not rented or
acquired for general investment or resale. This gift shall bear its share of estate taxes and
other death taxes.
C. Pre-Residuary Pecuniary Gifts
On the death of the SuNiving Settler, to the extent such property has not
been effectively appointed under the provisions of Trust A, Trust B, or Trust C, the Trustee
shall distribute the following pecuniary gifts without reduction for any estate or other death
taxes or expenses:
1. The sum of One Hundred Thousand Dollars ($100,000) to
GEORGE SPANOS, a brother of Husband.
2. The sum of One Hundred Thousand Dollars ($100,000) to ( )
STELLA GRAHAM, a sister of Husband.
CORINA FAKLIS, a sister-in-law of Wife.
FRAN TU LU MARIS, a cousin of Wife.
MADELINE MADSEN, a sister of Husband, which sum shall be payable in two installments
of Three Hundred Thirty Three Thousand Three Hundred Thirty Three Dollars ($33,333.00)
and a third installment of Three Hundred Thirty Three Thousand Three Hundred Thirty-Four
Dollars ($33,334.00), commencing on the one-year anniversary of the death of the
)
21
Exhibit 1, Page 55
Surviving Settler and continuing each of the next two anniversaries thereafter. It is
provided, however that in the event MADELINE MADSEN dies before the respective
payment anniversary date that no further payments shall be made. There shall be no
statutory interest payable on this gift, or any part thereof.
LEO SPANOS, a brother of Husband, which sum shall be payable in two installments of
Three Hundred Thirty Three Thousand Three Hundred Thirty Three Dollars ($33,333.00)
and a third installment of Three Hundred Thirty Three Thousand Three Hundred Thirty-Four
Dollars ($33,334.00), commencing on the one-year anniversary of the death of the
Surviving Settler and continuing each of the next two anniversaries thereafter. It is
provided, however that in the event LEO SPANOS dies before the respective payment
; anniversary date that no further payments shall be made. There shall be no statutory
interest payable on this gift, or any part thereof.
In the event that any of the above-named individuals does not survive the
Surviving Settler, the gift to that person shall lapse and fail.
The Surviving Settler requests, but does not require, that the residue of the
trust estate and/or the children of Settlers then living, provide direct payments for the heath
and medical care assistance of DANNY SPANOS, a brother of Husband, in the event that
DANNY survives the death of the Surviving Settler. This request does not establish any
obligation and no obligation exists for the providing of such care or assistance. The·
decision of the children, and each of them, to provide funds or not is a non-fiduciary,
unfettered choice.
22
Exhibit 1, Page 56
D. Division Into Shares for Children and Issue (l
On the death of the SuNiving Settler, the Trustee shall divide the remaining
unappointed balance of Trust A, the remaining unappointed principal balance of Trust B,
and the remaining unappointed balance of Trust C as then constituted lnto equal shares as
specified in the next sentence. The Trustee shall allocate one (1) equal share to each child
of Settler then living and one (1) equal share to a group consisting of the living issue of
each deceased child of Settler, by right of representation. In the event that any of Settlers'
children predecease the SuNiving Settler without issue then living, such deceased child's
share shall be divided fully among the suNiving children, or suNiving issue of a deceased
child, by right of representation.
Each share for a then-living child of the Settlers shall be held, administered,
and distributed as set forth in Paragraph E of this Section 6.9. Each share for a child of ()
Settlers who is then deceased but who has issue then living shall be divided fully among
the suNiving issue of the deceased child, by right of representation as set forth above in
this Paragraph D of this Section 6.9, and shall be distributed as set forth in Paragraph F of
this Section 6.9.
E. Separate Share Trusts for Children
Each share for a child of the Settlers shall be held, administered and
distributed as a separate trust as follows::
1. Division of Each Trust Into Two Parts
Each child's trust shall be divided into two parts, one part being the
Nonexempt Trust and the other part being the GST Exempt Trust. The GST Exempt Trust
23
Exhibit 1, Page 57
(
shall be funded with assets to the extent that child's share includes assets to which the
GST exemption has been or is taken as to assets in that child's trust. The GST Exempt
Trust shall consist of the following: (a) assets equal in value to the amount of any GST
exemption of the Surviving Settlor that has been allocated to this child's GST Trust by the
Trustee from Trust A; (b) any share of the Trust C that has an inclusion ratio of zero as the
result of an allocation of the Deceased Settlor's GST exemption to that trust; (c) any share
of the GST Exempt Marital Trust that has an inclusion ratio of zero as the result of an
allocation of the Deceased Settler's GST exemption to that trust; and (d) any share of any
trust that has an inclusion ratio of zero. The Nonexempt Trust shall include all other assets
in the child's trust (i.e., the non-exempt assets) and shall have an inclusion ratio of one. It
is Settlers' intention that the GST Exempt Trust retain a zero inclusion ratio for generation-
skipping transfe( tax purposes so that it contains only GST exempt property. Each child's
Trust (i.e., the Nonexempt Trust and the GST Exempt Trust) shall be distributed as
hereinafter provided.
2. Distribution of Net Income from GST Exempt Trust
(a) Subject to part (b) of this subparagraph 2, the
Independent Trustee designated in Section 10.3 shall pay to or apply for the benefit of the
child from time to time during the child's lifetime as much of the net income of that child's
GST Exempt Trust as the Independent Trustee determines necessary to the proper health,
education, maintenance or support of the child. In making payments of net income to or
for the benefit of the child, the Independent Trustee shall take into consideration, to the
extent the Independent Trustee determines advisable, any income or other resources of the
24
Exhibit 1, Page 58
child outside of the GST Exempt Trust, that are known to the Independent Trustee and are
reasonably available for that purpose. Unless otherwise distributed in accordance with part
(b) of this subparagraph 2 or the provisions of this part (a), undistributed income shall be
accumulated and added to the principal of the child's GST Exempt Trust. Notwithstanding
the foregoing, however, in the event that the GST Exempt Trust of a child includes an
interest in a so-called Subchapter S Corporation or other entity that requires that all net
income be distributable, without discretion, to a beneficiary as a condition for such election
or tax benefit, then all net income with respect to said asset shall be paid to or applied for
the benefit of the child, annually or at more frequent intervals, without discretion or power
of the Independent Trustee to otherwise distribute or accumulate said income. The
determination as to whether or not a S election or other income tax election shall be made
shall be that of the Trustee, in the sole discretion of the Trustee. )

(b) Except as provided in this part (b), the Independent
Trustee designated in Section 10.3 shall pay to or apply for the benefit of any one or more
of the group consisting of the child and the child's then-living issue (such child and then-
living issue of that child being collectively referred to in this part (b) of subparagraph 2 as
the "beneficiaries") from time to time during the child's lifetime as much, if any, of the net
income of the GST Exempt Trust of that child's trust as the Independent Trustee deems
necessary for the proper health, education, support or maintenance of any one or more of
the beneficiaries. In making any payments of net income from the GST Exempt Trust to or
for the benefit of a beneficiary, the Independent Trustee shall take into consideration, to the
extent the Independent Trustee deems advisable, any income or other resources of the
( )
25
Exhibit 1, Page 59
beneficiary outside of these trusts, known to the Independent Trustee, and reasonably
available for that purpose. Subject to the standard for payment of net income set forth in
the preceding sentences, the Independent Trustee may pay or apply more net income of the
GST Exempt Trust to or for the benefit of any of those beneficiaries than the other(s) and
may exclude any beneficiary from payment of net income of the GST Exempt Trust under
this part (b) of this subparagraph 2, and a beneficiary shall have no right of reimbursement
for any such unequal payments or lack of payments of net income, nor shall any such
payments be deducted from a remainder beneficiary's eventual share of the trust estate of
the child's trust. Distributions under this part (b) of this subparagraph 2 to or for the
benefit of issue of the child may not be made to discharge a support obligation of the child.
Any net income of the GST Exempt Trust of a child that is not distributed to the then-living
issue of the child in accordance with this part (b) of this subparagraph 2 shall be
accumulated in the GST Trust and added to the principal thereof. Notwithstanding the
foregoing in this part (b) of this subparagraph 2, in the event of the repeal of the federal
estate tax or the increase of the GST exemption in excess of Five Million Dollars ($5
million) in effect at the time of death of the Surviving Settlor, the power of the Independent
Trustee with respect to the discretionary distribution of income under this part (b) of
subparagraph 2 shall be limited to the lesser of: (i) the full GST Exempt Trust if the GST
exemption allocated to a child's trust is under $5 million; or (ii) that percentage of the net
income of the GST Exempt Trust equal to what $5 million reflects to the initial funding
value of the GST Exempt Trust. (Therefore, by way of example and not by way of
limitation, if the initial funding value to a child's GST Exempt Trust is $10 million, then the
26
Exhibit 1, Page 60
· Independent Trustee's discretion in the distribution of income would apply to only 50
percent of the net income of that GST Exempt Trust.) In addition, in the event that the GST
Exempt Trust of a child includes an interest in a so-called Subchapter S Corporation or
other entity that requires that all net income be distributable, without discretion, to a
beneficiary as a condition for such election or tax benefit, then all net income with respect
to said asset shall be paid to or applied for the benefit of the child, annually or at more
frequent intervals, without discretion or power of the Independent Trustee to otherwise
distribute or accumulate said income. The determination as to whether or not a Selection
or other income tax election shall be made shall be that of the Trustee, in the sole
discretion of the Trustee.
3. Distribution of Greater of Net Income or Unitrust Amount from
Nonexempt Trust ()
The Trustee shall pay to or apply for the benefit of the child annually
or at more frequent intervals during the child's lifetime the greater of: (a) the entire net
income of the "investment assets" (as defined herein) of the Nonexempt Trust; or (b) a
unitrust amount from gains that would otherwise be allocated to principal of four percent
(4%) of the net fair market value of the investment assets of the Nonexempt Trust, as
valued on the first business day of each calendar year (or the date of the Surviving Settlor's
death for that calendar year, and prorated for the year of Surviving Settlor's death or any
other short year). The term "investment assets" means the corpus of the Nonexempt Trust
other than any Spanos Business Interests (as defined in section 7 .24 of this instrument)
and/or any part thereof, residential real property and/or tangible personal property that is
27
Exhibit 1, Page 61
allocated to the Nonexempt Trust (unless such residential real property is rental property)
and that is part of the trust estate. If any residential real property that is not rental property
is sold after the Surviving Settlor's death, then the term investment assets shall not include
the corpus of any other residential non-rental assets acquired under the Nonexempt Trust
with the proceeds of such sale, but any proceeds of such sale not invested in residential
assets (or invested in residential rental property) shall be included in the term investment
assets. The value of any such residential real property (other than rental property) shall be
excluded in the determination of net income or the unitrust amount. Payments of any
unitrust amounts shall be made first from income of the Nonexempt Trust and next from
receipts from net gains on principal of the Nonexempt Trust. For example, in the event that
the Nonexempt Trust has a fair market value of $11 million, including non-rental
( residential real property and/or tangible personal property of $1million, the investment
assets would equal $10 million. In the event that the trust has net income of $300,000
under trust accounting principals and there were no receipts attributable to net principal
gains, then only $300,000 of net income would be distributable and no unitrust payment
would apply. In the event, however, that there were net principal gains of $200,000 (for
example principal gains of $250,000 and principal losses of $50,000}, then the unitrust
payment of $400,000 would be made, of which $300,000 would be from net income and
$100,000 would be from net principal gains. Net principal gains shall be determined net
of gains, losses, and all charges allocated to principal. In the event that net income is less
than the unitrust amount and net principal gains are insufficient to pay the difference, the
amount of said difference shall be payable to the child from the Nonexempt Trust in such
28
Exhibit 1, Page 62
next occurring future year(s) in which there is sufficient excess from either net income or ()
net principal gain receipts to make up the shortfall from a prior year. This deficit make up
shall not be made after the death of the child.
4. Payments of Principal
In addition to any payments made under subparagraphs 2 and 3, the
Trustee shall pay to or apply for the benefit of the child from time to time during the child's
lifetime as much of the principal of that child's trust as the Trustee determines necessary to
the proper health, education, maintenance or support of the child. In making payments of
principal from the child's trust to or for the benefit of the child, the Trustee shall take into
consideration, to the extent the Trustee determines advisable, any income or other
resources of the child outside of the trust, that are known to the Trustee and are reasonably
,-)
available for that purpose. To the extent feasible, distributions of principal shall be charged C_.
first to the Nonexempt Trust, until exhausted, and then to the GST Exempt Trust.
5. Disposition at Death of Child
(a) At the death of the child, the balance of the child's GST
Exempt Trust, including principal and accrued interest, shall be distributed to the following ·
as that child may appoint: (i) such persons (outright or in trust and on such terms and
conditions) consisting of the issue of that child of Settlers, and/or (ii) any charity and/or
qualified interest as provided in Internal Revenue Code Section 2055, as amended, to
which charitable deduction is allowed for federal estate tax purposes, including but not
limited to the Alex and Faye Spanos Family Foundation and/or a charitable trust (lead or
remainder) for the benefit of any such charity and any one or more of the issue of that
\
j
29
Exhibit 1, Page 63
child. The child may exercise this power of appointment by a Will or written acknowledged
instrument (executed before or after the death of the Surviving Settlor) specifically
exercising this limited power of appointment.
(b) At the death of the child, the balance of the child's
Nonexempt Trust, including principal and accrued interest, shall be distributed to the
following as that child may appoint: (i) such persons (outright or in trust and on such terms
and conditions) consisting of the issue of that child of Settlers, (ii) the creditors of the
estate of that child, and/or (iii) any charity and/or qualified interest as provided in Internal
Revenue Code Section 2055, as amended, to which charitable deduction is allowed for
federal estate tax purposes, including but not limited to the Alex and Faye Spanos Family
Foundation and/or a charitable trust (lead or remainder) for the benefit of any such charity
( and any one or more of the issue of that child. The child may exercise this power of
appointment by a Will or written acknowledged instrument (executed before or after the
death of the Surviving Settler) specifically exercising this general power of appointment.
(c) To the extent any power of appointment under this
subparagraph 5 is not effectively exercised, or if that any child of Settlers is not living at the
time of the death of the Surviving Settler, then all of that deceased child's trust shall be
allocated to the then living issue of that deceased child, by right of representation, and
held, administered, and distributed as provided in Paragraph F of this Section 6.9, or in the
event such deceased child of Settler has no issue then living, then the balance of such
deceased child's trust shall be allocated equally among the surviving children of Settlers,
and held, administered, and distributed as provided in this Paragraph E of this Section 6.9,
30
Exhibit 1, Page 64
or allocated to a group consisting of the living issue of a deceased child of Settlors, by right (1
of representation, and held, administered, and distributed as provided in Paragraph F of
this Section 6.9. If any part of the balance of a trust would otherwise be distributed to a
person for whose benefit a trust is then being administered under the terms of this trust
agreement, then said share shall be added to the share already held by the Trustee, except
that any partially distributed trust shall augment proportionately the distributed and
undistributed portions of the trust. .Distribution to the living issue of Settlors' deceased
children shall be made, by right of representation, as set forth in Section 6.9(F) of this
instrument should such deceased child of Settlers either predecease the Surviving Settlor
or, upon such deceased child's death. If any of Settlors' children and their issue die before
complete distribution of that child's trust, then the undistributed balance of that deceased
child's trust shall be distributed to the then living issue of Settlers, by right of ()
representation, as herein provided.
F. Separate Share Trusts for Grandchildren or More Remote Issue
Each share for the benefit of a living child of a deceased child of Settlors
(grandchild) or more remote issue of Settlors (each such grandchild or more remote issue
being referred to herein as the "beneficiary") shall be held, administered and distributed as
a separate share or trust for the beneficiary, as herein provided.
1. Division of Each Trust Into Two Parts
Each trust for a beneficiary shall be divided into two parts, one part
being the GST Exempt Trust and the other part being the Nonexempt Trust. The GST
Exempt Trust shall consist of any share of any trust for the beneficiary that has an inclusion
(
31
Exhibit 1, Page 65
ratio of zero. The Nonexempt Trust shall include all other assets in the beneficiary's trust
(i.e., the non-exempt assets). It is Settlers' intention that the GST Exempt Trust retain a
zero inclusion ratio for generation-skipping transfe·r tax purposes so that it contains only
GST exempt property. The beneficiary's trust (both the GST Exempt Trust and Nonexempt
Trust) shall be distributed as hereinafter provided.
2. Discretionary Net Income and Principal
In the event the beneficiary has not attained the age of thirty (30)
years at the time of the death of the Surviving Settler (or at such other applicable time at
which the trust for the beneficiary is created or property is added to an existing trust for the
beneficiary, referred to herein as "then"), then until the beneficiary has attained the age of
thirty (30) years, the Trustee shall pay to or apply for the benefit of the beneficiary such
( sums from the net income and principal of that beneficiary's trust as the Trustee
determines proper for the beneficiary's health, education, maintenance or support. In
making such distributions, the Trustee shall take into consideration all other income and
resources of the beneficiary that are known to the Trustee and are reasonably available for
that purpose. Accumulated but unpaid income shall be added to principal.
3. Mandatory Net Income; Discretionary Principal
Upon the beneficiary attaining the age of thirty (30) years, or if the
beneficiary has then attained the age of thirty (30) years, the Trustee shall pay to or apply
for the benefit of the beneficiary all net income of the beneficiary's trust, annually or at
more frequent intervals. In addition, the Trustee shall pay to or apply for the benefit of the
beneficiary from time to time as much of the principal of that beneficiary's trust as the
32
Exhibit 1, Page 66
,F··\
( .
Trustee determines necessary to the proper health, education, maintenance or support of ,
the beneficiary. In making payments of principal from the beneficiary's trust to or for the
benefit of the beneficiary, the Trustee shall take into consideration, to the extent the
Trustee determines advisable, any income or other resources of the beneficiary outside of
the trust, that are known to the Trustee and are reasonably available for that purpose.
4. Order of Payment of Discretionary Payment of Principal
If the beneficiary is a non-skip person under GST law (taking into
account any predeceased parent rule), distributions of principal under this Paragraph D
shall be first made from the Nonexempt Trust, and GST Exempt Trust principal shall not be
distributed until the Nonexempt Trust principal is exhausted. Conversely, if the beneficiary
is a skip person under GST law (taking into account any predeceased parent rule),
distributions of principal shall be first made from the GST Exempt Trust, and Nonexempt
Trust principal shall not be distributed until GST Exempt Trust principal is exhausted.
5. GST Exempt Trust for Life of Beneficiary
The principal of each beneficiary's GST Exempt Trust (to the extent
that the Trustee, in the Trustee's discretion, does not distribute such principal pursuant to
subparagraphs 2 and 3) shall be held in the GST Exempt Trust during the beneficiary's
lifetime.
6. Distributions of Nonexempt Trust in Stages
The principal of each beneficiary's Nonexempt Trust shall be
distributed outright based on age of the beneficiary as follows:
(a) Upon the beneficiary attaining the age of thirty (30)
)
33
Exhibit 1, Page 67
years, the Trustee shall distribute outright to that beneficiary one-third (1/3) of the balance
· of that beneficiary's Nonexempt Trust.
(b) Upon the beneficiary attaining the age of thirty-five (35)
years, the Trustee shall distribute outright to that beneficiary one-half (lh) of the balance of
that beneficiary's Nonexempt Trust.
(c) Upon the beneficiary attaining the age of forty {40)
years, the Trustee shall distribute outright to the beneficiary the entire remaining balance of
that beneficiary's Nonexempt Trust, including all principal and accrued but unpaid income.
(d) In the event that the beneficiary has then attained the
age of thirty (30) years but not the age of thirty-five (35) years, the Trustee shall distribute
outright to the beneficiary one-third (1/3) of the principal balance of that beneficiary's
Nonexempt Trust. In the event that the beneficiary has then attained the age of thirty-five
(35) years but not the age of forty {40) years, the Trustee shall distribute outright to the
beneficiary two-thirds (2/3) of the principal balance of that beneficiary's Nonexempt Trust.
In the event that the beneficiary has then attained the age of forty (40) years, the Trustee
shall distribute outright to the beneficiary the entire balance of that beneficiary's
Nonexempt Trust.
7. Disposition at Death of Beneficiary
(a) At the death of the beneficiary, the balance of the
beneficiary's GST Exempt Trust, including principal and accrued interest, shall be
distributed to such persons (outright or in trust and on such terms and conditions)
consisting of the issue of that beneficiary as that beneficiary may appoint by a Will or
34
Exhibit 1, Page 68
written acknowledged instrument (executed before or after the death of the Surviving
( )
Settlor) specifically exercising this limited power of appointment.
(b) In the event that the beneficiary dies before complete
distribution of that beneficiary's Nonexempt Trust, the balance of the beneficiary's
Nonexempt Trust, including principal and accrued interest, shall be distributed to such
persons (outright or in trust and on such terms and conditions) consisting of the issue of
that beneficiary and the creditors of the estate of that beneficiary as that beneficiary may
appoint by a Will or written acknowledged instrument (executed before or after the death of
the Surviving Settler) specifically exercising this general power of appointment.
(c} To the extent any power of appointment under this
subparagraph 7 is not effectively exercised, or if there are no issue of Settlers living at the
time of the death of the Surviving Settler or other applicable time the trust is to be created
for the beneficiary or property added to a trust for the beneficiary, then all of that deceased
beneficiary's trust shall be distributed to the then living issue of that deceased beneficiary,
by right of representation, either outright or in trust depending upon the age and generation
of such issue as provided in this Paragraph F, or in the event such deceased beneficiary
has no issue then living, the balance of such deceased beneficiary's trust shall be
distributed, by right of representation, to the living issue of the next immediate ancestor of
that beneficiary who is an issue of Settlers and which ancestor has issue then living, and
distributed as provided herein, and in the absence thereof, to Settlers' issue, by right of
representation, and distributed as provided herein, and in the absence thereof, to such
beneficiaries and under the terms and conditions provided in Section 6.10. If any part of
)
35
Exhibit 1, Page 69
the balance of a trust would otherwise be distributed to a person for whose benefit a trust is
then being administered under the terms of this trust agreement, then said share shall be
added to the share already held by the Trustee.
(d) Upon a vote of a majority of Settlers' children living at
the time of the vote, the potential appointees in favor of whom a beneficiary (i.e.,
grandchild or more remote issue of Settlers) may exercise a power of appointment under
this subparagraph 7 may be expanded to include not only the issue of that beneficiary, but
also some or all of the other issue of Settlors (other than that beneficiary). Said vote to
expand, if made, shall be confirmed by a written memorandum executed by at least a
majority of Settlers' children then living. To the extent that the scope of the permitted
appointees is expanded by said vote, the exercise of any such power of appointment,
including the accrued interest thereon, shall be to such persons (outright or in trust and on
such terms and conditions) consisting of the issue of Settlers to the extent approved by said
vote, but excluding the beneficiary holding said power of appointment, the estate of said
beneficiary, the creditors of said beneficiary, and the creditors of the estate of said
beneficiary (except to the extent said power of appointment allows a general power of
appointment under part (b) of this paragraph 7), as that beneficiary may appoint by a Will
or written acknowledged instrument (executed before or after the death of the Surviving
Settler) specifically exercising the respective power of appointment.
6.10 Contingent Disposition
If at the time of the death of the Surviving Settler, or at any later time before full
distribution of the trust estate (referred to as 11then 11 in this section), no other provision for
36
Exhibit 1, Page 70
distribution is made, the trust estate or the portion of it then remaining shall be distributed
(1
to the ALEX AND FAYE SPANOS FAMILY FOUNDATION, a California Corporation, with the
further stipulation that said funds be_ used and applied in the manner di_rected by any by-
laws or other written instrument executed prior the death of the Surviving Settlor, and in
the absence of said direction, then in a manner consistent with contribution history of said
foundation and its purposes as evidenced prior to the event giving rise to the
implementation of this section 6.10. All gifts made by said foundation shall be made in
the name of the foundation.
6.11 Meaning of Education
Whenever provision is made in this Section 6 for payment for the 11education 11 of a
beneficiary, the term 11education 11 shall be construed to include pre-school, elementary,
preparatory, vocational, college and post-graduate study, including instruction in music, art, ( J
and other subjects conducted either before or after the regular school day so long as·
pursued to advantage by the beneficiary at the institution of the beneficiary's choice, and in
determining payments to be made for such pre-school, elementary, preparatory, vocational,
college or post-graduate education, the Trustee shall take into consideration the
beneficiary's related living expenses to the extent that they are reasonable.
6.12 Exchange of Property by Surviving Settler
The Surviving Settler may exchange properties between the Survivor's Trust and
Exemption Trust and/or Marital Trust if agreeable to the Trustee, on reasonable terms and
at fair market value. Before making any such exchange, the Surviving Settlor and the
Trustee are encouraged, but not required, to consider any tax consequences of the
exchange. ( )
37
Exhibit 1, Page 71
( 6.13 Primacy of Beneficiary Interests
Settlors are the primary beneficiaries of the trust estate while either or both of them
are living and this trust shall be so interpreted. Accordingly, their interests shall be
considered first, and the interests of remainder beneficiaries shall be of lesser significance.
Upon the death of both of the Settlors, the children of the Settlors become the primary
beneficiaries; and, as to each of their trusts, that child shall be the primary beneficiary.
Accordingly, their interests of that child shall be considered first; and, the interests of
remainder beneficiaries shall be of lesser significance. In view of the fact that each child
has a power of appointment as each respective trust of that child, that child may further
designate the beneficiary or beneficiaries who shall be of primary importance.
Settlors further recognize that certain children are more active in the family
( ) businesses than are other children, that certain children have greater decision making
/
authority with respect the operation of particular family business interests than do other
children, and that the interests of children may differ. Settlors recognize that these
differences may continue with respect to future generations since some of the issue may
participate in Spanos Business and others may not. Also, participation in a closely-held
business offers certain benefits of employment, including but not limited to compensation,
travel, enhanced prestige, perks, income tax benefits, use of company transportation,
bonuses, insurance and a variety of other benefits that are not, and/or may not later be
available to other family members. While Settlors hope and encourage that their children
and subsequent issue function in a cooperative spirit with constructive communication,
Settlors also recognize that conflicts exist or may exist, including the selection of the
38
Exhibit 1, Page 72
Trustee and with respect to investment, management and other business-related decisions
that the Trustee may make.
Any individual who has a financial interest in any Spanos Business Interest may
enter into any transaction, directly or indirectly, between or among that individual in his or
her capacity as a Trustee of a trust hereunder, and in other capacities, including, but not
limited to, as an individual, as an officer, partner, director, manager, member or fiduciary of
another entity, and as a beneficiary of a trust hereunder, and the prohibitions of Probate
Code Section 16004, as amended, shall not apply. For the purposes hereof, the term
11
transaction" shall involve a Spanos Business Interest and shall include, but shall not be
limited to, sales or exchanges, loans, redemptions, partial or whole liquidations, and
ordinary course of business. Any sale or exchange between any individual in his or her
capacity as a Trustee of a trust hereunder and that same individual in any other capacity,
including as a beneficiary of the same trust, shall be at fair market value. Any loan
between an individual in his or her capacity as Trustee hereunder and that same individual
in any other capacity, including as a beneficiary of the same trust, shall be at reasonable
rates of interests and adequately secured.
)
39
Exhibit 1, Page 73
7. POWERS OF TRUSTEE
To carry out the purposes of the trusts herein created and subject to any limitations
stated elsewhere in this instrument, Trustee is vested with the following powers with
respect to the trust estate and any part of it, in addition to those now or hereafter conferred
by law:
7 .1 Hold and Operate
To continue to hold any property, including shares of stock of the Trustee under this
agreement, and to operate at the risk of the trust estate and not at the risk of Trustee, any
property or business received or acquired under this trust, so long as the Trustee shall
deem advisable, the profits and losses therefrom to inure or be chargeable to the trust
estate as a whole and not to Trustee. However, the Trustee may not unreasonably retain
under productive property in the Marital Trust (Trust B) over the objection of the Surviving
Settler and the Trustee shall convert such property to productive property within a
reasonable time upon request by the Surviving Settler.
7 .2 To Deal with and Protect Trust Property
To manage, control, partition, divide, subdivide, improve, repair, to sell, convey or
exchange trust property at the fair market value of such property; to grant options and to
sell upon deferred payments; to lease for any purpose upon terms within or extending
beyond the duration of the trust created hereunder, including exploration for and removal of
gas, oil and other minerals; to enter into community oil leases; to create restrictions,
easements and other servitudes; to compromise, arbitrate or otherwise adjust claims in
favor of or against any trust created herein; to institute, compromise and defend actions
and proceedings; to carry such insurance as Trustee may deem advisable.
40
Exhibit 1, Page 74
7 .3 To Trade. Invest and Reinvest
To trade on margin, invest and reinvest the principal and income, and to purchase
or acquire therewith every kind of property, real and personal, and every kind of investment,
specifically including, but not limited to, corporate obligations· of every kind, and stocks,
preferred or common, shares of investment trusts, investment companies and mutual
funds, mortgage participations and the purchase, sale, straddle or other transaction relating
to commodity contracts or options, which persons of prudence, discretion and intelligence
acquire for their own account, all in a manner conforming with existing law; subject always
to the Trustee's fiduciary duties, to hold trust assets in its own name or in the name of its
nominee, and to invest in any common or commingled trust fund or funds now or hereafter
established by Trustee, and operated by and under the control of Trustee solely for the
investment of trust funds, all in conformity with the express provisions of the instruments ( J
establishing such common trust fund or funds and all amendments thereof.
7 .4 Securities
To have respecting securities all the rights, powers, and privileges of an owner,
including, but not by way of ·limitation, the power to pay assessments and other sums
deemed by Trustee necessary for the protection of the trust, to participate in voting trusts
(including voting trusts extending beyond the term of the trust), pooling agreements,
foreclosures, reorganizations, consolidations, mergers and liquidations, and in connection
therewith, to deposit securities with and transfer title to any protective or other committee
under such terms as Trustee may deem advisable; to exercise or sell stock subscription or
conversion rights; to accept and retain as an investment any securities or other property
)
41
Exhibit 1, Page 75
received through the exercise of any of the foregoing powers, subject to any limitations
elsewhere in this instrument relative to investments by Trustee; to cause securities or other
property of the trust to be held or registered in Trustee's individual or joint names, or in the
name of a nominee, or in such other form as Trustee deems best without disclosing the
trust relationship.
7 .5 Power to Employ Agents and Advisors
The Trustee is authorized to employ attorneys, accountants, auditors, psychologists,
family dynamics consultants, investment managers, specialists and such other agents as
the Trustee shall deem necessary or desirable to advise or assist the Trustee in the
performance of his or her administrative duties; to act without independent investigation
upon their recommendations; and instead of acting personally, to employ one or more
agents to perform any act of administration, whether or not discretionary. The Trustee shall
have the authority to appoint an investment manager or managers to manage all or any part
of the assets of the trust, and to delegate to said investment manager the discretionary
power to acquire and dispose of assets of the trust. The Trustee may charge the
compensation of such attorneys, accountants, auditors, psychologists, family dynamics
consultants, investment managers, specialists and other agents against the trust, including
any other related expenses. The foregoing engagements and payments may be made at the
expense of the trust estate even though the Trustee is licensed, trained or otherwise
qualified to render such services.
7 .6 Division into Shares
In any case in which the Trustee is required, pursuant to the provisions of the trust,
to divide any trust property into parts or shares for the purpose of distribution, or otherwise,
42
Exhibit 1, Page 76
( \
the Trustee is authorized, in the Trustee's absolute discretion, to mak~ the division and \. ..
distribution in kind, including undivided interests in any property, or partly in kind and
partly in money, pro rata or non-pro rata, and for this purpose to make such sales of the
trust property as the Trustee may deem necessary on such terms and conditions as the
Trustee shall see fit.
7.7 Payments to a Beneficiary Under Age Twenty-Five (25) Years
In the event that any distribution hereunder is to be made to a beneficiary who is
then under twenty-five (25) years of age, or whose mental or physical health is then such
that in the sole opinion of the Trustee the interests of such beneficiary may be served by
providing distribution on behalf of such beneficiary through other channels, in whole or in
part, rather than directly to such beneficiary, the Trustee may make such distribution in any
one or more of the following ways (irrespective of the existence of a legal representative of
such beneficiary): (I) to the legal representative of such beneficiary; (ii) to a relative of such
beneficiary to be expended or used for the health, maintenance and support of such
beneficiary; (iii) by the Trustee expending or using the same for the health, maintenance
and support of such beneficiary; or (iv) to the Custodian under a Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act, (including termination at age 25) under the laws of
the State of residence of the beneficiary. A receipt for any such payment from any such
recipient shall be a complete discharge of the Trustee, and the Trustee shall not be required
to see to the application of any money so paid.
(
\.. . .
)
43
Exhibit 1, Page 77
7 .8 No Segregation: Separate Accounts
There need be no physical segregation or division of the various trusts except as
segregation or division may be required by the termination of any of the trusts, but the
Trustee shall keep separate accounts for the different undivided interests.
7.9 Accounting
No accounting shall be required of the Trustee in the absence of demand by either
Settler during the lifetime of the Settlers and so long as either of them is serving as a
Trustee. Upon neither Settler serving as a Trustee, the Trustee shall render annual
accountings in the format and content provided in the California Probate Code Sections
1060-1063, as amended, without the necessity of court confirmation or approval (unless
petition for confirmation is requested by a Trustee or beneficiary). In the event that request
for confirmation or approval of the accounting is not made by a Trustee or beneficiary then
in lieu of the three-year limitations period provided for in Probate Code Section 16063, as
amended, within which to object to an accounting, the accounting rendered by the Trustee
shall be final, conclusive and binding on all persons and beneficiaries receiving the
accounting (and all future beneficiaries claiming through such person) unless written
objection is made to the Trustee or an objection to the accounting is filed with the Court
within one hundred eighty (180) days of the receipt of the accounting by the beneficiary.
The accounting rendered by the Trustee shall contain a statement that claims against the
Trustee for breach of trust may not be made after the expiration of 180 days from the date
the beneficiary receives the account disclosing facts giving rise to the claim. The
accounting shall also contain a statement that the recipient of the account may petition to
44
Exhibit 1, Page 78
court pursuant to Section 17200 of the Probate Code to obtain a court review of the
account and of the acts of the Trustee.
Notwithstanding the foregoing, in the event that a charitable trust, including but not
limited to a charitable remainder trust of any type, a charitable lead trust of any type, or
other charitable entity is a beneficiary, the foregoing accounting requirements, in the sole
discretion of the Trustee, shall be satisfied upon the delivery of a copy of the federal income
tax return with respect to the trust or gift made to that trust without the requirement for
further accounting. The Trustee and not the charitable trust, or its trustee, shall have the
election as to the method of accounting that shall be used. Notwithstanding the foregoing
provisions of this paragraph, the Trustee shall provide to the charitable trust, foundation, or
other charitable entity an accounting in accordance with the prior paragraph upon request
of said charitable trust or entity; provided however, that the charitable trust or entity shall ( )
be charged for the cost of the preparation of said accounting, unless said accounting
reflects the need to adjust the rights, sum, or benefit provided to said charitable trust or
entity, in addition to that which has been otherwise reported to that charitable trust or
entity by the Trustee in any other manner.
7.10 To Determine Principal and Income
Except as provided herein, the lrustee shall determine what shall constitute
principal of the trust, gross income therefrom, and net income distributable under the terms
of this instrument, applying the provisions of the Uniform Principal and Income Act of the
State of California as they may from time to time exist. Expense of administration not taken
as income tax deduction on the death of the Deceased Settler shall be charged to trust
)
45
Exhibit 1, Page 79
accounting income, provided said authority or exercise of power does not decrease or
disqualify the marital deduction.
7 .11 Notice to Trustee of Births. Etc.
Until the Trustee shall receive written notice of any birth, marriage, death or other
event upon which the right to payments from this trust may depend, the Trustee shall incur
no liability to persons whose interests may have been affected by that event for
disbursements made in good faith.
7.12 Use of Insurance and Retirement Benefits
Notwithstanding anything in this instrument to the contrary, the Trustee shall not
pay any death taxes, including interest or penalties, last illness and funeral expenses,
attorneys• fees, administration expenses, debts, or other obligations of the Deceased Settler
or the Deceased Settlor1s probate estate from funds received from qualified retirement plans
that are excludable from the Deceased Settlors gross estate for federal estate tax purposes
under Section 2039 of the Internal Revenue Code or any successor statute or from
proceeds of insurance policies on the Deceased Settlor1s life which are not otherwise
includible in the Deceased Settlor's gross estate.
7 .13 Deferral of Division or Distribution of Trust Assets
Whenever the Trustee is directed to make a distribution of trust assets or a division
of trust assets into separate trusts or shares on a Settler's death, the Trustee may, in the
Trustee 1s discretion, defer such distribution or division until six (6) months after the Settlers
death. When the Trustee defers distribution or division of the trust assets, the deferred
division or distribution shall be made as if it had taken place at the time prescribed in this
instrument in the absence of this Section 7 .13, and all rights given to the beneficiaries of
46
Exhibit 1, Page 80
such trust assets under other provisions of this instrument shall be deemed to have accrued ()
and vested as of such prescribed time.
7 .14 Tax Matters and Decisions
A. The Trustee shall have absolute discretion, but shall not be required to
make adjustments·in the rights of any beneficiaries, or among the principal and income
accounts, to compensate for the consequences of any tax decision or election, or of any
investment or administrative decision, that the Trustee believes has had the effect, directly
or indirectly, of preferring one beneficiary or group of beneficiaries over others. In
determining the federal estate and income tax liabilities of the estate of a Settler or of the
trust created by this instrument, the Trustee shall have discretion to select the valuation
date, to determine whether any or all of the allowable administration expenses in any estate
shall be used as federal estate tax deductions or as federal income tax deductions, and to
make or not to make any elections, available to the trust or the estate of a Settler. The
trust estate shall not be responsible for the payment of estate tax, generation skipping tax,
inheritance tax, income tax or other death taxes pertaining to assets or interests that are not
a part of the trust estate.
B. In connection with any trust arising after the death of the Surviving
Settler to which there exists a discretion as to the distribution of income, Settlers authorize,
but do not require the Trustee to consider the income tax situation of the trust and
beneficiaries. Settlers recognize that this authorization creates a standard to which the
action or inaction of the Trustee or the exercise or nonexercise of discretion can create
disagreement. Said authority as well as other tax elections and decisions of the Trustee,
47
Exhibit 1, Page 81
shall be made or not made without recourse from any beneficiary. The Trustee may also
· take into consideration after the death of the Surviving Settler the relative income tax
marginal rates which apply to the trust as well as to the respective beneficiary as part of
the consideration as to whether or not income will be distributed or accumulated. The
exercise of said authority shall be without recourse against the Trustee.
C. The Trustee is authorized to divide and partition trusts in order to
segregate any trust as between exempt and non-exempt property. Reference in this
instrument to "exempt" property includes all types of property and interests that are exempt
from transfer tax whether under estate, generation skipping transfer tax or other type of
succession or inheritance tax. The term "non-exempt" refers to property that is not exempt
from GST tax. The Trustee may also divide and partition trusts if such action would be
beneficial to the administration of the trust or for the benefit of the beneficiaries as a result
of tax reasons or as may be determined appropriate by the Trustee, in the Trustee's
judgment.
D. The Trustee shall be authorized to make GST exemption applications,
elections and allocations applicable to the trust estate. The Trustee shall be an "Executor"
as that term is used under GST law for that purpose. The Trustee is authorized, but not
required to make the QTIP election under IRC Section 2056(b)(7). The GST Exemption
shall be allocated equally to each child's trust unless the Trustee in the reasonable
discretion of the Trustee determines that the GST Exemption should not be allocated
equally. For example, if one or more children do not want issue or become close to the age
of forty-five without issue and believe the prospects of issue are remote, then little or no
48
Exhibit 1, Page 82
GST exemption need be allocated to that child's share so that more exemption can be
allocated to the share of children with issue.
E. Upon termination, partial termination or other later subdivision or
distribution of any of the separate trusts (including subtrusts) created by this trust
instrument, or when separate trusts are combined, the nonexempt (inclusion ratio of one) or
exempt (zero inclusion ratio) generation-skipping character of property shall be preserved.
Accordingly, when property is to be added to or combined with the property of another trust
or other trusts or when additional trusts are to be established from one or more sources,
nonexempt property or trusts shall not be added to or combined with exempt property or
trusts, even if this requires the establishment of additional separate trusts with the same
terms and provisions. If, for example, the terms of what would otherwise be one trust
direct that, on termination (or on failure to exercise a power of appointment), trust property C)
is to be added to another trust, the exempt property of a separate trust that had been
derived from the terminating trust shall be added only to an exempt trust derived from the
recipient trust; nonexempt property shall be similarly added only to a nonexempt recipient
trust; and if no appropriate recipient trust exists for either exempt or nonexempt property,
then a new trust of that character shall be established with the same terms and provisions
as those of the trust that would otherwise receive that property under the original trust
terms.
F. In this trust instrument, and in the generation skipping context
generally, the term "exempt" or "Exempt" refers to property or a trust (or share) that has a
generation-skipping inclusion ratio of zero (that is, an applicable fraction for GST purposes
l.
49
Exhibit 1, Page 83
/,.,---".
of one). When reference is made to an "exempt trust" or to the "exempt portion" of certain
property or of a trust, this is a reference to or a special titling for property or a trust that has
or is to be established having an inclusion ratio of zero. The term "non-exempt portion" or
the adjective "nonexempt" or "non-exempt" indicates property or a trust that has a GST
inclusion ratio of one (that is, an applicable fraction of zero). The term "generation-
skipping or "GST" in this trust refers to the federal generation-skipping transfer tax under
Chapter 13, as amended, of the Internal Revenue Code of 1986, as amended. References
to a "trust" or to "trusts" refer also to a separate share or shares of a trust if appropriate to
the context and to the Settlers' apparent objectives and if the shares will be entitled to be
treated as separate trusts for GST purposes. The term "subtrust" shall be synonymous with
'trust" and shall be established as a separate trust. The "establishment" or to "establish"
) as trust shall mean to hold, administer and distribute that trust or share as a separate trust.
G. In this Section 7 .14, and in the GST context generally, the term
"executor" refers to the person or persons authorized by the IRC provisions and Treasury
regulations to make the transferor election for qualified terminable interest property under
IRC Section 2652(a)(3) and to allocate the exemption under IRC Section 263l(a) and shall
include the Trustee. No person acting as executor, however, shall be authorized to make
any GST election if power to do so would result in his or her having a general power of
appointment (for federal estate and gift tax purposes) over property with respect to which
he or she would not otherwise have such a general power; should this prohibition leave no
executor to make the elections or allocations, the office of executor for this limited purpose
shall be filled in the manner that other vacancies in the office of executor of the Settler's
Will would be filled.
50
Exhibit 1, Page 84
7 .15 Termination Where Share is Small
If the trust held for a beneficiary who is over twenty-five (25) years of age has a total
value at the end of a calendar year of less than $1,000,000.00, the Trustee, in the
Trustee's sole discretion, may distribute the entire trust estate of that beneficiary's trust
outright and may terminate the trust of that beneficiary. In the event that the beneficiary is
the sole Trustee, this power may only be exercised with court approval.
7 .16 Power to Lend to Settler's Probate Estate
To lend money to any person, including the probate estate of either Settler, provided
any such loan shall be adequately secured at a reasonable rate of interest.
7 .17 Power to Purchase Property from Settler's Probate Estate
To purchase property at its fair market value, as determined by the Trustee in the
Trustee's discretion, from the probate estate of either Settler. C

7 .18 Release of Powers
Each Trustee shall have the power to release or to restrict the scope of any power
that the Trustee may hold in connection with the trust created under this instrument,
whether this power is expressly granted in this instrument or implied by law. The Trustee
shall exercise this power in a written instrument specifying the powers to be released or
restricted and the nature of any restriction. Any released power shall pass to and be
exercised by a Trustee in the order of succession provided in this instrument as though the
Trustee who exercised the release or restriction were not then serving as Trustee.
7.19 Power to Withhold Payment if Conflicting Claims Arise
To withhold from distribution, in the Trustee's discretion, at the time for distribution
of any property in any trust without the payment of interest, all or any part of the property, /
51
Exhibit 1, Page 85
if the Trustee determines, in the Trustee1s discretion, that the property may be subject to
conflicting claims, to tax deficiencies or to liabilities, contingent or otherwise.
7 .20 Savings and Bank Accounts
The Trustee may establish one or more checking or savings accounts, demand
deposits, money market accounts, certificates of deposit or other monetary funds or
accounts as the Trustee determines. At the direction on a signature card signed by all
Trustees then serving at a time when two or more Co-Trustees are serving, the signature of
two (2) Co-Trustees shall be sufficient .to endorse checks or make withdrawals, sign checks
or make deposits at a time when two or more Co-Trustees are serving. In addition, with the
approval, in writing, of all then living children of Settlers, plus the consent of Wife if Wife is
then serving as a Co-Trustee, the signature of one (1) Trustee shall be sufficient to endorse
( checks or make withdrawals, sign checks or make deposits. This authorization for fewer
than all Trustees (whether the authorization applies to two Co-Trustees or any other
number fewer than all Co-Trustees, may be revoked by any Trustee or any child of Settlers
then living even if that child is not a Co-Trustee.
7.21 Power to Engage in Partnership Business
A. The Trustee may, in the Trustee's discretion:
(1) Enter into any general or limited partnership agreement;
(2) Become or remain a partner under the agreement;
(3) Transfer to the partnership any real or personal assets of the

trust estate, in exchange for an interest in the partnership;
(4) Carry out all the terms and conditions of any partnership
agreement; and
52
Exhibit 1, Page 86
(5) When possible, convert any general partnership interest to a (J
limited partnership interest.
B. The Trustee shall have .these powers even if the Trustee is also a
partner of the partnership for the Trustee's own account or another fiduciary account.
C. Notwithstanding the foregoing, the Trustee shall, if possible, convert
any general partnership interest that the trust may hold at the time of or by reason of the
Settler's death to a limited partnership interest.
7 .22 Compensation for Trustee Services
The Trustee shall be entitled to reasonable compensation subject to the following:
(1) Neither Settler nor any child of Settlers shall receive compensation
from the trust estate for services rendered as a Trustee, Co-Trustee or
Independent Trustee or Independent Co-Trustee.
(2) Any Trustee or Independent Trustee who is employed by any Spanos

Business shall not receive any compensation from the trust estate for ( ·.!,
services as a Trustee, Co-Trustee or Independent Trustee or "··

Independent Co-Trustee during the time of such employment, but may
receive compensation for services rendered after the cessation of
employment as herein provided.
(3) Currently, Settlers believe that compensation of Twenty-Five Thousand

Dollars ($25,000) per year would be sufficient for payment to a Co-
Trustee when not precluded from receiving compensation as above
provided. While Settlers recognize the value of a dollar may change
. and that the nature of duties and other circumstances may change
with respect to Trustee workload, Settlers' approach toward Trustee
compensation is to be conservative. Appropriate adjustment in the
compensation payable to a Trustee may be made with respect to a
trust for the benefit of a child, or issue of a child, with the written
approval of a majority of the current income beneficiaries of that trust,
but in no event shall it be greater than would be reasonable under the
ciraumstances. Settlers do not encourage the engagement of a bank,
trust company or other corporate fiduciary as a Trustee or Co-Trustee.
In the event, however, that a bank, trust company or other corporate
fiduciary becomes a Trustee or Co-Trustee, the current income
beneficiaries of that trust may agree upon the amount of
(
\
53
Exhibit 1, Page 87
compensation that would be reasonably payable to that bank, trust
company or other corporate fiduciary at the expense of that trust
estate, for services rendered as a Trustee or Co-Trustee.
The Trustee and the Independent Trustee, regardless of the identity of that Trustee
or Independent Trustee, shall be reimbursed, as an expense of the trust estate, for out-of-
pocket and other direct expenses and costs incurred for services rendered on behalf of the
trust estate.
T.23 S Corporation Stock
A. In the event that the assets of the trust estate include stock in a
so-called 11S Corporation" or 11Subchapter S Corporation" under I.R.C. Section 1361, as
amended, the Trustee shall have the power if permitted by law to join with the income
beneficiary of any trust holding such stock as to whether or not to elect that the trust be
( ) treated as an owner under I.R.C. Section 678, as amended, and such stock shall be
allocated to trust(s) which include only one income beneficiary. The authority of this
· paragraph is included for convenience and not to change the income tax law under which
the beneficiary is treated as the owner for purposes of Section 678(a) of the Code. The
Trustee is further granted such powers and authority, as the law may permit to make such
elections and take such acts as may be necessary or appropriate to retain S Corporation
status, unless there is a decision to terminate S Corporation status, with respect to such
stock and/or the corporation with regard thereto. Said election, the inclusion of S
Corporation Stock in the trust estate, and the other discretions in the exercise of authority
conferred by this Section 7 .23 are done without recourse against the Trustee or the trust
estate with respect thereto and the action or actions of the Trustee. The Trustee shall have
54
Exhibit 1, Page 88
the further authority to adjust division or allocation of assets as between trusts to avoid a
disproportionate allocation or division of trust assets at the time of the division or
allocation, to distribute S Corporation Stock to the Settlor•s probate estate and to take other
actions as may be necessary or appropriate to preserve S Corporation status, unless a
decision has been made to terminate S Corporation status. Accordingly, during such time
as the trust owns shares in a "small business corporation," as defined in I.R.C. Section
1361(d), as amended from time to time, the Trustee shall take all action as may be
necessary in order to ensure continued qualification of this Trust as a qualified Subchapter
S trust. Specifically:
(1) During the life of the current income beneficiary of any trust
created herein, there shall be only one (1) income beneficiary
of such trust;
(2) Any principal distributed during the life of the current income ( ")
beneficiary of any such trust may be distributed only to such
beneficiary;
(3) The income interest of the current income beneficiary in such

trust shall terminate on the earlier of such beneficiarys death
or the termination of the trust;
(4) Upon the termination of any such trust during the lifetime of
the current income beneficiary, the trust shall distribute all of
its assets to such beneficiary; and
(5) All of the income of such trust (within the meaning of I.R.C.
Section 643(b)) shall be distributed only to an individual who
is a citizen or a resident of the United States.
B. In the event, however, that the income beneficiary is an adult and
does not want the Selection made or continued, the Trustee shall follow the beneficiary's
decision to the extent permitted by law and to the extent the Trustee is able to do so. In
)
55
Exhibit 1, Page 89
the event a trust estate includes S Corporation stock but there would exist more than one
income beneficiary, then the Special Trustee as defined herein shall have the authority to
divide and re-divide the S Corporation Stock into shares (each share established as a
separate trust) on a per stirpal basis among the then-living beneficiaries (including any-
afterborn beneficiaries who would be part of that otherwise 11 pot trust"). The Trustee shall
then establish each of the trusts as separate qualified Subchapter S trusts. The Special
Trustee for the above purposes shall be either the then current Trustee if the Trustee is not
an income beneficiary, or if the office of Special Trustee cannot be so filled then it shall be
filled by the successor Trustee or Co-Trustee as herein designated and who accepts office of
Trustee and who shall be the Special Trustee for the foregoing purposes. In no event,
however, shall a person to whom the authority granted in this Part B would constitute a
( general power of appointment serve as the Special Trustee.
C. The Trustee is also authorized to make the election under I.R.C.
Section 1362 to qualify any corporation as an S corporation. The Trustee is also authorized
to take any steps necessary to terminate such S corporation election if the Trustee, after
consultation with the other shareholders of such corporation, if any, the income
beneficiaries of the trust (or their guardians or conservators in the case of any minor or
incompetent beneficiary), and any tax advisor selected by the Trustee, determines that
termination of such election is in the best interests of the trust. Notwithstanding the
foregoing, the Trustee shall comply with any binding shareholder agreement regarding the
making or termination of an S-Corporation election.
56
Exhibit 1, Page 90
7 .24 Non-Diversification and Alteration of the Standard of Care Respecting Spanos
Business Interests
A. The Trustee is not compelled to sell assets or make acquisitions as
may be otherwise required by the rule directing fiduciaries to diversify holdings provided
that the decision as to the retention or disposition of assets is not made wilfully, in bad
faith, and, in addition, in a manner that is contrary to the provisions of this trust.
8. As guiding instruction and statement of intent, Settlers emphasize that
during their lifetimes Settlers' investment philosophy has been one of assuming greater
risks in order to maximize financial rewards, and Settlers specifically authorize the Trustee
to continue this investment policy and to retain assets or investments of the kind currently
held in this trust estate, and others that may be hereafter acquired, despite the fact that
concentrating in higher-risk investments may violate the usual and customary rules (
requiring Trustees to diversify investments, as well as the rules requiring the Trustees to
emphasize the security of principal and/or production of income. In addition, Settlers
value family participation in business and believe that family business provides
opportunities and benefits that are not measured in simply financial terms. Money is not
the only currency or measure of value, or of that which should be valued. Furthermore, the
ownership of a professional football team provides benefits of potential appreciation in
value, standing in the community, presence, enjoyment, and other benefits that Settlers do
not want to see threatened or guided by the standards of the Probate Law and duties
imposed on a trustee with respect to business or investment decisions of any kind in
connection with Spanos Business Interests. As a result, Settlers have provided enhanced.
discretion to the Trustee in dealing with Spanos Business Interests and waiver of the
( )
'- ./
57
Exhibit 1, Page 91
Prudent Investor Act with respect to said interests. Moreover, Settlors have gone even
further in their granting greater prerogatives to the Trustee with respect to the San Diego
Chargers components (as defined below in this section 7 .24) by waiving the standard of
Probate Code Section 16040, as amended, with respect to the Chargers component of the
Spanos Family Business and applying a more management-friendly and business-friendly
reference to guideline under the Corporations Code as below provided.
C. In order to implement Settlors' intentions, each of the following
actions, instructions, waivers and/or authorizations are made with respect to Spanos
Business Interests (as defined herein) other than those related to the San Diego Chargers
components (as defined below in this section 7 .24):
(1) Settlors exempt the Trustee from any and all such rules and
. l direct that Trustee shall have no liability for any loss resulting
(
'-, )
from retention, investment, and reinvestment in or with respect
to the Spanos Business Interests existing or established from
time to time before or after the death of Settlers, unless said
action arises from willful misconduct as a Trustee or gross
negligence as a Trustee. Trustee conduct is willful or grossly
negligent if it is in bad faith, and, in addition, in a manner that
is contrary to the provisions of this trust.
(2) TO THE FULLEST EXTENT PERMITTED BY LAW, SETTLORS
DIRECT THAT THE PRUDENT INVESTOR ACT UNDER
PROBATE CODE SECTION 16045 ET SEQ., AND
SUBDIVISION (A) OF PROBATE CODE SECTION 16002 AND
58
Exhibit 1, Page 92
PROBATE CODE SECTION 16003 INSOFAR AS SAID
SECTIONS PERTAIN TO THE PRUDENT INVESTOR ACT, AS
AMENDED, OR ANY SUCCESSOR SECTIONS, IS WAIVED
WITH RESPECT TO SPANOS BUSINESS INTERESTS, AND
EACH PART THEREOF; AND NOTHING IN THIS SECTION
SHALL BE CONSTRUED TO NARROW SAID WAIVER.
(3) Settlers authorize the Trustee to continue to own and/or
hereafter acquire, a substantial, controlling or other interest in
a closely-held business or businesses in which family members
of the Settlers actively participate in a material manner in a
career or other professional manner.
D. In order to implement Settlers' intentions, each of the below-stated

(_)
actions, instructions, waivers and/or authorizations are made with respect to San Diego
Chargers components of the Spanos Business Interests. The term 11components" with
respect to the San Diego Chargers (which term is further defined in paragraph F of this
section 7 .24) refers to all divisions, subsidiaries, associations, assets, rights, title, interests,
and property of whatever kind of nature (real or personal) that is directly or indirectly
involved with the San Diego Chargers. The following provisions apply with respect to the
San Diego Chargers:
(1) TO THE FULLEST EXTENT PERMITTED BY LAW, SETTLORS DIRECT
THAT THE PRUDENT INVESTOR ACT UNDER PROBATE CODE
SECTION 16045 ET SEQ., AND SUBDIVISION (A) OF PROBATE
CODE SECTION 16002 AND PROBATE CODE SECTION 16003
59
Exhibit 1, Page 93
INSOFAR AS SAID SECTIONS PERTAIN TO THE PRUDENT
INVESTOR ACT, AS AMENDED, OR ANY SUCCESSOR SECTIONS IS
WAIVED WITH RESPECT TO THE SAN DIEGO CHARGERS
COMPONENT OF THE SPANOS BUSINESS INTERESTS, AND EACH
PART THEREOF; AND NOTHING IN THIS SECTION SHALL BE
CONSTRUED TO NARROW SAID WAIVER.
(2) smLORS ABSOLVE THE TRUSTEE OF ALL FIDUCIARY DUTIES
IMPOSED BY CALIFORNIA PROBATE LAW WITH RESPECT TO
DECISIONS MADE IN CONNECTION WITH THE OWNERSHIP,
RETENTION, DIVERSIFICATION, MANAGEMENT, VOTING, AND
STANDARD OF CARE, SKILL AND CAUTION UNDER CALIFORNIA
( \
PROBATE CODE SECTION 16040, AS AMENDED, WITH RESPECT
I
TO THE SAN DIEGO CHARGERS COMPONENT OF THE SPANOS
BUSINESS INTERESTS, AND EACH PART THEREOF. THIS WAIVER
SHALL ALSO INCLUDE, WITHOUT LIMITATION, THE PROVISIONS
OF SUBDIVISION (A) TO PROBATE CODE SECTION 16002, AS
AMENDED, AND PROBATE CODE SECTION 16003, AS AMENDED.
SETTLORS HEREBY STATE THEIR INTENTION THAT THE
TRUSTEES' DUTIES WITH RESPECT TO THE SAN DIEGO
CHARGERS COMPONENT OF THE SPANOS BUSINESS INTERESTS,
AND EACH PART THEREOF, SHALL BE GOVERNED BY CALIFORNIA
CORPORATIONS CODE REQUIREMENTS, IN THE SAME MANNER
60
Exhibit 1, Page 94
AS THOUGH THE INTEREST IN THE SAN DIEGO CHARGERS WERE 1-'1'
\,
OWNED BY A NON-TRUSTEE.
(3) In view of the complete waiver under California Probate Law
provided in part (2) of this paragraph D and the waiver in part (1) of
this paragraph D, Settlers do not believe that it is necessary to include
an exemption from liability in the absence of willful misconduct as a
Trustee or gross negligence as a Trustee since the San Diego Chargers
components are to be held and managed as though not held by a
trustee. In the event, however, that the waivers and absolution of
liability provided in parts (1) and/or (2) of this paragraph Dare in
violation of California law, then the waivers shall be construed to the
fullest extent possible in favor of the Trustee.

C
E. As used in this trust instrument, the term Spanos Business Interests"
11
includes, but is not limited to, the Chargers Football Co., LLC; Chargers Associates, LLC;
Spanos Berberian Wine, LLC; Spanos Berberian Investments, LLC; A.G. Spanos
Construction, Inc.; Spanos Holding Company, LLC; A.G. Spanos Development, Inc.; AGS
Ventures, Inc.; Trinity Capital Development, LLC; various real property that is held as co-
tenants by or through other entities or trusts in association with other Spanos Business
Interests, all rental residential property, whether multi-tenant or not; all closely-held and/or
tenancy in common interests hereinafter acquired of a similar nature to any or all of the
foregoing; athletic and sports marketing; real estate development; construction; acquisition,
improvement and/or management of real property (whether residential, agricultural,
61
Exhibit 1, Page 95
commercial, recreational or otherwise); the ownership and/or retention of publicly traded
securities, cash, liquid assets or other investments (whether diversified or not) that directly
or indirectly support a Spanos Business Interest; and, such other closely-held business
interests in which the children or issue of Settlers significantly participate in an active,
professional or career in character. The terms 11Spanos Business Interests" shall also
include all subsidiaries, associations, affiliations, merged entities, transferees, subsidiary,
parent, franchises, and hereinafter established enterprises, entities, businesses,
corporations, partnerships, limited liability companies, business trusts, associations, co-
ownership, and all other forms of ownership with respect to each of the foregoing, whether
now existing or hereafter established, before or after the death of either Settler.
F. Reference to a San Diego Chargers 11component" shall mean any
Spanos Business Interest, in any form, to the extent that such interest relates, in whole or
\.
in part, to the ownership, operation, facilities, stadium, government benefits, entitlements,
property, leasing, management, development, marketing, media; image, franchise,
National Football League benefits, rights and/or duties, and its business interests in the
most expansive sense of the word of the San Diego Chargers. Reference to the San Diego
Chargers shall include but not be limited to Chargers Football Co., LLC; and Chargers
Associates, LLC. and all subsidiaries, associations, affiliations, merged entities, transferees,
partnerships, limited liability companies, corporations, franchises, divisions, assignees,
successor and related entities that exist or may hereafter exist. Reference to the 11San Diego
Chargers" shall not be limited to a professional football team located or doing business in
San Diego, California, but shall include any professional football team, regardless of
62
Exhibit 1, Page 96
location and/or professional league affiliation, that is a Spanos Business Interest. It shall (. ~\,_.·
also include with respect to the San Diego Chargers all future and/or other merged entities,
assignees, subsidiaries, affiliations, partnerships, transferees, limited liability companies,
corporations, franchises, divisions, assignees and or all other successors of any kind that
exist or may hereafter exist.
G. The following additional waivers shall apply with respect to the
performance of Trustee duties with respect to the San Diego Chargers, and each component
thereof, that may otherwise apply as a result of reference to the California Corporations
Code and/or any duties thereunder, and shall apply with respect to the performance of
duties by any Trustee of any trust established under this instrument:
(1) A Trustee is not obligated to commit a specific portion of his or
her time to the business of the trust estate as a result of serving as a Trustee, except to the (
extent reasonable to discharge the duties of a Trustee;
(2) A Trustee is free to engage in other business activities in which
the trust estate has no interest;
(3) A Trustee is free to engage in business activities that compete
with the trust estate (although disclosure of the nature and extent of those activities shall
be given to the income beneficiary of said trust and to each of the children of Settlers then
living) in the event that said interests compete with any Spanos Business Interest and/or
the San Diego Chargers components ; and
(4) A Trustee need not offer business opportunities to the trust
estate and may take advantage of those opportunities for_ his or her own account, and
63
Exhibit 1, Page 97
neither the trust estate, nor any part thereof, nor any beneficiary thereto has a right to any
income derived by the Trustee from such activities. Furthermore, a Trustee is not required
·to notify any beneficiary, other Trustee, or any other interested party with respect to any
trust hereunder of events applicable to this item (4), except to the extent required by item
(3) of this paragraph with respect to a competing activity to that of any Spanos Business
Interest and/or the San Diego Chargers components.
7 .25 Special Investment Provisions
The Trustee is authorized to purchase interests in one or more businesses that are
co-owned with a beneficiary or to lend to a beneficiary to operate or expand a business
provided the investment and loans are on reasonable terms at fair value, and as to any loan
adequately secured and a reasonable interest. The Trustee is authorized to acquire
( residential property and permit an income beneficiary to reside in that property without the
payment of rent.
7 .26 Power To Borrow and Guarantee
The Trustee may, in the Trustee's discretion, borrow money and encumber trust
property by mortgage, deed of trust, pledge, or otherwise, for the debts of the trust, the
joint debts of the trust and a co-owner of the property in which the trust has an interest, or
a Settler's debts or to guarantee a Settlor's debts. In addition, the Trustee may guarantee
the debts of any entity, LLC, corporation or partnership in which the trust estate has an
interest if said guarantee is considered prudent by the Trustee or otherwise required under
the terms and conditions of any agreement to which the Trustee is a party.
64
Exhibit 1, Page 98
7.27 Compliance with Business Agreements and Amendments
The Trustee is authorized and instructed to comply with business agreements,
including but not limited to shareholder agreements, buy-sell agreements, bylaws, voting
trusts, partnership agreements, limited partnership agreements, LLC agreements and other
contracts pertaining to the ownership, management, transferability, voting rights and
participation in businesses in which the trust estate has an interest. In the event that said
agreements, or other requirements of law (such as licensing statutes) require that a licensee
be the Trustee or that one Trustee represent the trust estate in such business or matter, the
Trustee is authorized to select a Co-Trustee to represent the Trustee in such matter, when
choice of representative is possible, or to have one Co-Trustee who holds the required
license to represent that trust with respect to said business or matter. The Co-Trustee shall
be designated among the Trustees, if any of them can be authorized to serve as a Co-
Trustee in said matter. The Trustee may also approve or reject amendments to such
agreements, and/or consent to new business agreements, in the sole discretion of the
Trustee.
7 .28 Limitation Unitrust or Annuity Trust Conversion
A. No Trustee shall have the power to allocate any receipt to income that
would be treated normally as a principal receipt with respect to any trust or share with
respect to which the establishment, appointment, maintenance, operation, benefit or use of
a unitrust is expressly prohibited under this instrument.
B. No Trustee, in any event, may distribute an equity interest in any
Spanos Business Interest to any beneficiary to satisfy any payment or application of
65
Exhibit 1, Page 99
income, the exercise of any discretionary distribution of principal, and/or to satsify any
annuity or unitrust amount. An "equity interest" refers to the ownership of stock,
membership interest, assignee interest, partnership interest, profits interest, outright
ownership, fee interest, leasehold interest, lawful possessory interest, equitable ownership,
tenancy in common and/or all other forms of ownership of any other right, title and/or
interest in a Spanos Business Interest, in Whole or part.
C. Neither a Trustee's power to convert a trust into a unitrust or annuity
trust nor a power to make adjustment between principal and income or modify a trust,
regardless of what may otherwise be authorized in Probate Code Sec. 16335, et. seq, as
amended or any part thereof, may be exercised, or authorized, to permit the distribution of
any equity interest, in whole or part, in a Spanos Business Interest.
D. No trust shall be converted to a unitrust or annuity trust in the event
that said trust holds any interest in a Spanos Business Interest. The Trustee shall have no
duty to sell, in whole or part, the Spanos Business Interests or approve the sale, in whole or
part, of the underlying assets of such Spanos Business Interest in order to accommodate,
facilitate or permit the conversion of any trust, in whole or part, to an annuity trust or
unitrust.
E. Furthermore, no conversion of any trust to a unitrust or annuity trust
may be made, in whole or part, over the objections of any child of Settlers, regardless of
whether or not that child is a beneficiary and/or Trustee of said trust, it that trust has any
interest in a Spanos Business Interest or co-owns any property with that child or with a
trust for the benefit of that child.
66
Exhibit 1, Page 100

8. SPENDTHRIFT PROVISIONS
No beneficiary of this trust shall have any right, power, or authority to sell, assign,
pledge, mortgage, or in any other manner to encumber, alienate, or impair all or any part of
his or her interest in the trust or in the principal or income of the trust. The beneficial and
legal interest in, and the principal and income of, the trust and every part of it shall be free
from the interference or control of any creditor of any beneficiary of the trust and shall not
be subject to the claims of any such creditor nor liable to attachment, execution,
bankruptcy, or any other process of law. The income and principal of the trust shall be
paid over to the beneficiary in person, or, in the event of the minority or incompetency of
any beneficiary, to the guardian of the person of that beneficiary, or to or for the benefit of
that beneficiary, in such manner as in the Trustee's discretion seems most advisable, (i.e.
"sees fit") at the time and in the manner provided by the terms of the trust, and not upon (
any written or oral order nor upon any assignment or transfer by the beneficiary nor by
operation of law. The foregoing shall not alter the right of any beneficiary to make a
disclaimer of all or any part of any interest in property to which he or she may be entitled
under this instrument.
9. TERMINATION
Unless sooner terminated according to other provisions of this instrument or
according to the provisions of any trust created by the exercise of any power of appointment
conferred by this instrument, each trust created under this instrument and each trust
created by exercise of any power of appointment conferred by this instrument, shall
terminate twenty-one (21) years after the death of the last survivor of the beneficiaries of
67
Exhibit 1, Page 101

the trusts created under this instrument who are living at the earlier of the date on which
. the trust becomes irrevocable or the date of death of the Surviving Settlor. All principal and
undistributed income of a terminated trust shall be distributed to the then income
beneficiaries of that trust in the proportions in which they are, at the·time of termination,
entitled to receive the. income; provided, however, that if the rights to income are not then
fixed by the terms of that trust, distribution under this clause shall be made, by right of
representation, to the persons who are then entitled or authorized in the Trustee's discretion
to receive income payments, or, if the there are no such persons, on the principle of
representation to the persons who are then entitled or authorized to receive principal
payments in the discretion of the Trustee.
68
Exhibit 1, Page 102

10. DESIGNATION OF TRUSTEES AND OFFICE OF TRUSTEE
10.1 Designation of Trustees Other Than for Trusts for Children or Their Issue
This Section 10.1 shall govern the appointment of Trustees other than Trustees of
any trusts for the primary benefit of any of Settlers' children or their issue, which shall be
governed by Section 10.2. Section 10.3 designates the Independent Trustee for purposes
of Paragraph E.2. of Section 6.9.
Each Settler appoints, as to his or her separate estate during his or her lifetime, and
both Settlers appoint, as to the community estate and as to all trusts established
thereunder, the following three individuals to serve as Co-Trustees:
1. Wife;
2. Settlers' son DEAN A. SPANOS ("DEAN"); and
3. Settlers' daughter DEA SPANOS BERBERIAN ("DEA").

C)
If Wife, for any reason (including death), becomes unable or unwilling to act as a
Co-Trustee, the vacancy in the office of Co-Trustee caused by Wife's inability or
unwillingness to serve shall not be filled, and DEAN and DEA, or their successor Co-
Trustee(s), shall serve as Co-Trustees. If DEAN for any reason (including death), becomes
unable or unwilling to act as a Co-Trustee for any reason, then Settlers appoint their son,
MICHAEL A. SPANOS, to serve as a Co-Trustee along with the remaining one of DEA or
DEA's successor, and along with Wife, if Wife is still able and willing to serve as a Co-
Trustee. In the event that DEA for any reason (including death), becomes unable or
unwilling to act as a Co-Trustee for any reason, then Settlers appoint their daughter,
ALEXANDRA SPANOS RUHL, to serve as a Co-Trustee along with the remaining one of
()
.69
Exhibit 1, Page 103

DEAN or MICHAEL (if serving as DEAN's successor) , and along with Wife, if Wife is still
able and willing to serve as a Co-Trustee. If only one of Settlors' children is able and willing
to serve as a Trustee, Settlors appoint that remaining child of Settlors to serve as sole
Trustee (or to serve as Co-Trustee along with Wife, if Wife is still able and willing to serve
as a Co-Trustee). In no event shall Wife serve as the sole Trustee.
4. In the event that a further vacancy arises in the office of Trustee at a
time when Wife is unable or unwilling to serve as the other Co-Trustee, the Settlors appoint
JEREMIAH MURPHY to serve as a Co-Trustee along with the persons set forth in subpart 6
of this Section 10.1.
5. If Wife is still able and willing to serve as a Co-Trustee and there is
any subsequent vacancy in the office of the other Co-Trustee, Settlers authorize Wife alone
to appoint one or more other Co-Trustees to serve concurrently with Wife. Wife may also
change that designation by written instrument from time to time. In the event that Wife
does not appoint another Co-Trustee to serve concurrently with her, JEREMIAH MURPHY is
appointed to serve as a Co-Trustee concurrently with Wife. The Trustee or Co-Trustee
appointed by Wife can continue to serve as a Trustee or Co-Trustee after the incapacity or
death of Wife.
6. In the event that none of the persons named above (or designated by
Wife pursuant to subpart 5) except for JEREMIAH MURPHY is willing and able to serve as
a Co-Trustee; and/or in the event that JEREMIAH MURPHY is unable or unwilling to serve
as a Co-Trustee, Settlors appoint (I) DIMITRI ECONOMOU, a son of DEA; (ii) ALEXANDER
G. SPANOS, a son of DEAN; (iii) ADRIANA RUHL, a daughter of ALEXANDRA; and, (iv) the
70
Exhibit 1, Page 104

eldest child of MICHAEL who has attained at least the age of twenty-five (25) years and (-,!
who is willing and able to serve. The following order of successor in Trustee shall apply,
which order has been established so that each family line of a child of Settlers may be able
to have a child (i.e., a grandchild of Settlers) serve as a Co-Trustee, if a different
designation of Co-Trustee is not made as above provided:
(A) In the event that DIMITRI ECONOMOU for any reason fails to
qualify or ceases to act as a Co-Trustee, Settlers appoint ALEXANDROS ECONOMOU to
serve as a Co-Trustee. In the event that neither of the above-named sons of DEA is able
and willing to serve as a Co-Trustee, Settlers appoint ARAM BERBERIAN, a spn of DEA, as
a Co-Trustee, provided that he has attained the age of twenty-five (25) years, and if not,
then upon attaining said age.
(B) In the event that ALEXANDER G. SPANOS for any reason fails ( ')
to qualify or ceases to act as a Co-Trustee, Settlers appoint JOHN SPANOS to serve as a
Co-Trustee.
(C) In the event that ADRIANA RUHL shall for any reason fail to
qualify or cease to act as a Co-Trustee, Settlers appoint NICOLETTA RUHL to serve as a
Co-Trustee. In the event that neither of the above-named children of ALEXANDRA is
willing and able to serve as a Co-Trustee, then the next eldest child then living of
ALEXANDRA, and continuing thereafter in succession by age, is appointed to serve as a Co-
Trustee.
(D) In the event that the eldest child of MICHAEL shall for any
reason fail to qualify or cease to act as a Co-Trustee, then the next eldest child, and
continuing thereafter in succession by age, is appointed to serve as a Co-Trustee.
71
Exhibit 1, Page 105

7. In the event that none of the children of a given child of Settlers or
given children of Settlers, is/are willing and able to serve, then the other(s) of them from
the above order of successor are appointed to serve as Co-Trustees, provided that there are
at least one of them at all times serving along as a Co-Trustee with JEREMIAH MURPHY, if
he is still serving, or at least two (2) of them then serving as Co-Trustees in the event that
JEREMIAH MURPHY is unable or unwilling to serve as a .Co-Trustee. Neither JEREMIAH
MURPHY nor any other person shall serve as a sole Trustee as a result of an appointment
under parts 6 or 7 of this section 10.1. If JEREMIAH MURPHY, for any reason (including
death}, becomes unable or ·unwilling to act as a Co-Trustee, the vacancy in the office of Co-
Trustee caused by his inability or unwillingness to serve shall not be filled unless there is
only one other Co-Trustee then serving. In the event that a further vacancy arises in the
office of Co-Trustee, upon either none of the above named or only one of the above named
in subpart 6 of this subpart 7 being willing and able to serve as a Co-Trustee, then there
shail then be appointed a total of four Co-Trustees (five Co-Trustees if JEREMIAH MURPHY
is still serving). This appointment shall be made as provided in subpart 8 of this
paragraph.
8. In the event that only one of the persons named in subparts 6 or 7
(including JEREMIAH MURPHY) is willing and able to serve as a Trustee, then that one
person is to continue to serve as a Co-Trustee. The other Trustees shall then be designated
by vote of the living issue in the oldest generation of issue then living of each child of
Settlors. For example, if a child of Settlers has a child then living (i.e., one grandchild of
Settlers) and nine (9) grandchildren (great-grandchildren of Settlers) then living, only that
one grandchild of Settlers shall vote for that line of succession of the particular child of
72
Exhibit 1, Page 106

Settlers. If that line of succession of that particular child had no grandchildren of Settlers (-!
then living, then the successor Trustee for that child's line would be elected by a majority of
the then living great-grandchildren of Settlers under that line. The person elected may be a
lineal descendant of Settlers, a bank, trust company or other corporate fiduciary as
determined by the respective vote and may not be a non-family member except in the event
of an "Extraordinary Vote." The party entitled to vote may also change that designation by
written instrument from time to time under a similar procedure. A guardian or guardian ad
!item may vote on behalf of a minor entitled to vote, but may not take part in an
Extraordinary Vote. An Extraordinary Vote is one in which (i) there is an insufficient
availability of lineal descendants of Settlers willing and able fill the above vacancy; (ii) the
appointment of a bank is considered ill-advised by at least 60% of the then living issue, by
number, of Settlers; and, (iii) the person selected to serve as a Co-Trustee is independent ( - ')
... -./
within the meaning of IRC Section 674(c), as amended.
10.2 Designation of Trustees of Trusts for Children or Their Issue
The following is the order of appointment of the trusts established for each of the
children of Settlers, or issue of a deceased child of Settlers:
A. DEAN SPANOS Trust: DEAN is appointed as the sole Trustee. In
the event that DEAN, for any reason fails to qualify or ceases to act as Trustee, the
successor Trustee shall be such individual, individuals, bank, trust company or other
corporate fiduciary as DEAN may designate in writing. DEAN may also change that
designation by written instrument from time to time. In the event that DEAN has not
effectively appointed a successor Trustee, or in the event that a further vacancy arises in
the office of Trustee, then DEA and MICHAEL are appointed as the Co-Trustees. In the
73
Exhibit 1, Page 107

event that either of them for any reason fails to qualify or ceases to act as Trustee, then
ALEXANDRA is appointed as a Co-Trustee. In the event that only one of the above named
is able to serve as a Trustee, then that child is appointed as the sole Trustee. In the event
that no appointment by DEAN is then effective, and none of the above-named is able and
willing to serve as Trustee, then the following order of successor Trustee shall apply:
1. JEREMIAH MURPHY; ALEXANDER G. SPANOS, a child of
DEAN; and JOHN SPANOS, a child of DEAN, are appointed to serve as Co-Trustees. If any
one of them is unwilling or unable to serve as a Trustee, the others are appointed as the
Co-Trustees.
2. In the event that only one of the above-named is able and
willing to serve as a Trustee, Settlers appoint the remaining one as to serve as sole Trustee.
3. In the event that a further vacancy arises in the office of
Trustee, the Trustee or Co-Trustees shall be designated by vote of the living issue in the
oldest generation of DEAN then living. For example, if DEAN has a child then living (i.e.,
one grandchild of Settlers) and nine (9) grandchildren (great-grandchildren of Settlers) then
living, only that one grandchild of Settlers shall vote for that line of succession of DEAN. If
DEAN's line of succession had no grandchildren of Settlers then living, then the successor
Trustee for DEAN's line would be elected by a majority of the then living great-
grandchildren of Settlers under that line. The person elected must be an issue of Settlers or
a bank, trust company or other corporate fiduciary.as determined by the respective vote.
The party entitled to vote may also change that designation by written instrument from time
to time. A guardian or guardian ad litem may vote on behalf of a minor entitled to vote,
provided however, that the guardian may not serve as a Trustee. In the absence of said vote
~
74
Exhibit 1, Page 108

the vacancy in the office of Trustee of the DEAN SPANOS Trust shall be filled by Eldest
Succession of Sibling Line. As used in this section 10.2, the term "Eldest Succession of
Sibling Line" means that one Co-Trustee shall be drawn from each line of descent from
each sibling of that child's trust (i.e., DEAN as to the DEAN SPANOS Trust, DEA as to the
DEA BERBERIAN Trust, MICHAEL, as to the MICHAEL SPANOS TRUST, and ALEXANDRA,
as to the ALEXANDRA RUHL Trust) and the trust for the issue of that respective child. The
implementation of this order of succession shall following the priority and age requirements
in parts (A) through {D) of subpart 6 of section 10.1. However, upon a vote of a majority
then living of the current income beneficiaries of the respective trusts under the DEAN
SPANOS Trust, any Co-Trustee whose appointment arises under the Eldest Succession of
Sibling Line shall be able to make either of the following changes: (i) select a different issue
of Settlers to replace anyone otherwise appointed under the Eldest Succession of Sibling r ,)
\ ___ /
Line or {ii) select any bank, trust company or other corporate fiduciary to replace anyone
otherwise appointed under the Eldest Succession of Sibling Line.
8. DEA BERBERIAN Trust: DEA is appointed as the sole Trustee. In
the event that DEA, or any reason fails to qualify or ceases to act as Trustee, the successor
Trustee shall be such individual, individuals, or any bank, trust company or other corporate
fiduciary as DEA may designate in writing. DEA may also change that designation by
written instrument from time to time. In the event that DEA has not effectively appointed
of the successor Trustee, or in the event that a further vacancy arises in the office of
Trustee, then DEAN and ALEXANDRA are appointed as the Co-Trustees. In the event that
either of them for any reason fails to qualify or ceases to act as Trustee, then MICHAEL is
appointed as a Co-Trustee. In the event that only one of the above named is able to serve
)
75
Exhibit 1, Page 109

as a Trustee, then that child is appointed as the sole Trustee. In the event that no
appointment by DEA is then effective,
and none of the above-named is able and willing to serve as Trustee, then the following
order of successor Trustee shall apply:
1. JEREMIAH MURPHY; DIMITRI ECONOMOU, a child of DEA;
and ALEXANDROS ECONOMOU, a child of DEA, are appointed to serve as Co-Trustees. If
any one of them is unwilling or unable to serve as a Trustee, the others are appointed as
the Co-Trustees. In the event that any two of them for any reason fails to qualify or ceases
to act as a Co-Trustee, then ARAM BERBERIAN, a son of DEA, is appointed as a Co-
Trustee, provided that he has attained the age of twenty-five (25) years, and if not, then
upon attaining said age.
willing to serve as a Trustee, Settlers appoint the remaining one as the sole Trustee, except
that ARAM may not serve as a sole Trustee prior to the age of forty (40) years. In the event
that a further vacancy arises in the office of Co-Trustee prior to ARAM attaining the age of
forty (40) years, ARAM may appoint any issue of Settlers who has attained the age of forty
(40) years to serve as a Co-Trustee of said trust with ARAM.
oldest generation of DEA then living. For example, if DEA has a child then living (i.e., one
grandchild of Settlers) and nine (9) grandchildren (great-grandchildren of Settlers) then
living, only that one grandchild of Settlers shall vote for that line of succession of DEA. If
DEA's line of succession had no grandchildren of Settlers then living, then the successor
~-----::1
76
Exhibit 1, Page 110

Trustee for DEA's line would be elected by a majority of the then living great-grandchildren (")
of Settlors under that line. The person elected must be an issue of Settlers or a bank, trust
company or other corporate fiduciary, as determined by the respective vote. The party
entitled to vote may also change that designation by written instrument from time to time.
A guardian or guardian ad litem may vote on behalf of a minor entitled to vote, provided
however, that the guardian may not serve as a Trustee. In the absence of said vote the
vacancy in the office of Trustee of the DEA BERBERIAN Trust shall be filled by Eldest
Succession of Sibling Line as above defined. The implementation of this order of succession
shall following the priority and age requirements in parts (A) through (D) of subpart 6 of
section 10.1. However, upon a vote of a majority then living of the current income
beneficiaries of the respective trusts under the DEA BERBERIAN Trust, any Co-Trustee
whose appointment arises under the Eldest Succession of Sibling Line shall be able to (
\
make either of the following changes: (i) select a different issue of Settlors to replace
anyone otherwise appointed under the Eldest Succession of Sibling Line or (ii) select any
bank, trust company or other corporate fiduciary to replace anyone otherwise appointed
under the Eldest Succession of Sibling Line.
C. ALEXANDRA SPANOS RUHL Trust: ALEXANDRA is appointed as the
sole Trustee. In the event that ALEXANDRA, or any reason fails to qualify or ceases to act
· as Trustee, the successor Trustee shall be such individual, individuals, or any bank, trust
company or other corporate fiduciary as ALEXANDRA may designate in writing.
ALEXANDRA may also change that designation by written instrument from time to time. In
the event that ALEXANDRA has not effectively appointed of the successor Trustee, or in the
event that a further vacancy arises in the office of Trustee, then DEAN and DEA are
77
Exhibit 1, Page 111

appointed as the Co-Trustees. In the event that either of them for any reason fails to
qualify or ceases to act as Trustee, then MICHAEL is appointed as a Co-Trustee. In the
event that only one of the above named is able to serve as a Trustee, then that child is
appointed as the sole Trustee. In the event that no
appointment by ALEXANDRA is then effective, and none of the above-named is able and
willing to serve as Trustee, then the following order of successor Trustee shall apply:
1. JEREMIAH MURPHY; ADRIAN A RUHL, a child of
ALEXANDRA; and NICOLETIA RUHL, a child of ALEXANDRA are appointed to serve as Co-
Trustees. If any one of them is unwilling or unable to serve as a Trustee, the others are
appointed as the Co-Trustees together with the oldest child of ALEXANDRA then living who
has attained the age of twenty-five (25) years.
that no child may serve as a sole Trustee prior to the age of forty (40) years. In the event
that a further vacancy arises in the office of Co-Trustee prior to a child of ALEXANDRA
attaining the age of forty (40) years, the children of ALEXANDRA then living, as a group
may by majority vote, may appoint any issue of Settlers who has attained the age of forty
(40) years to serve as a Co-Trustee of said trust with the child of ALEXANDRA who has not
attained age forty (40) years. Upon the eldest child of ALEXANDRA attaining the age of
forty (40) years, that child may become the sole Trustee of ALEXANDRA RUHL Trust,
which appointment shall be in effect until another child of ALEXANDRA attains the age of
forty (40) years, at which time there shall be two Co-Trustees of this trust. The service of
two Co-Trustees shall continue so long as there are two children of ALEXANDRA then living
,------:-i
78
Exhibit 1, Page 112

and able and willing to serve as a Co-Trustee. In the event that all children of ALEXANDRA (-!
are deceased or unwilling or unable to serve as a Co-Trustee and there is one child who has
attained the age of forty (40) years, that child may serve as the sole Trustee.
oldest generation of ALEXANDRA then living. For example, if ALEXANDRA has a child then
. living (i.e., one grandchild of Settlors) and nine (9) grandchildren (great-grandchildren of
Settlors) then living, only that one grandchild of Settlors shall vote for that line of
succession of ALEXANDRA. If ALEXANDRA's line of succession had no grandchildren of
Settlors then living, then the successor Trustee for ALEXANDRA's line would be elected by
a majority of the then living great-grandchildren of Settlors under that line. The person
elected must be an issue of Settlors or a bank, trust company or other corporate fiduciary, (
as determined by the respective vote. The party entitled to vote may also change that
designation by written instrument from time to time. A guardian or guardian ad litem may
vote on behalf of a minor entitled to vote, provided however, that the guardian may not
serve as a Trustee. In the absence of said vote the vacancy in the office of Trustee of the
ALEXANDRA RUHL Trust shall be filled by Eldest Succession of Sibling Line as above
defined. The implementation of this order of succession shall following the priority and age
requirements in parts (A) through (D) of subpart 6 of section 10.1. The elder twin child of
ALEXANDRA shall have priority over the younger twin. However, upon a vote of a majority
then living of the current income beneficiaries of the respective trusts under the
ALEXANDRA RUHL Trust, any Co-Trustee whose appointment arises under the Eldest
Succession of Sibling Line shall be able to make either of the following changes: (i) select a
)
79
Exhibit 1, Page 113

1
/ , different issue of Settlers to replace anyone otherwise appointed under the Eldest
Succession of Sibling Line or (ii) select any bank, trust company or other corporate fiduciary
to replace anyone otherwise appointed under the Eldest Succession of Sibling Line.
D. MICHAEL SPANOS Trust: MICHAEL is appointed as the
sole Trustee. In the event that MICHAEL, or any reason fails to qualify or ceases to act as
Trustee, the successor Trustee shall be such individual, individuals, or any bank, trust
company or other corporate fiduciary as MICHAEL may designate in writing. MICHAEL
may also change that designation by written instrument from time to time. In the event
that MICHAEL has not effectively appointed of the successor Trustee, or in the event that a
further vacancy arises in the office of Trustee, then DEAN and DEA are appointed as the
Co-Trustees. In the event that either of them for any reason fails to qualify or ceases to act
as Trustee, then ALEXANDRA is appointed as a Co-Trustee. In the event that only one of
(
the above named is able to serve as a Trustee, then that person is appointed to serve as the
sole Trustee. In the event that none of the above named is willing and able to serve as a
Trustee, then Settlers appoint the following as the successor Trustees for any Trust for the
benefit of MICHAEL, or his issue, which appointment shall apply except as provided below:
1. JEREMIAH MURPHY and the one child of MICHAEL who has
attained the age of twenty-five (25} years who is willing and able to serve as a Co-Trustee,
and one other child of MICHAEL, who has attained the age of twenty-five (25) years who is
willing and able to serve, with the priority in service being given to the eldest child.
that no child may serve as a sole Trustee prior to the age of forty (40) years. In the event
80
Exhibit 1, Page 114

that a further vacancy arises in the office of Co-Trustee prior to a child of MICHAEL
attaining the age of forty (40) years, the children of MICHAEL then living, as a group may
by majority vote, may appoint any issue of Settlers who has attained the age of forty (40)
years to serve as a Co-Trustee of said trust with the child of MICHAEL who has not attained
age forty (40) years. Upon the eldest child of MICHAEL attaining the age of forty (40)
years, that child may become the sole Trustee of MICHAEL SPANOS Trust, which
appointment shall be in effect until another child of MICHAEL attains the age of forty (40)
years, at which time there shall be two Co-Trustees of this trust. The service of two Co-
Trustees shall continue so long as there are two children of MICHAEL then living and able
and willing to serve as a Co-Trustee .. In the event that all children of MICHAEL are
deceased or unwilling or unable to serve as a Co-Trustee and there is one child who has
attained the age of forty (40) years, that child may.serve as the sole Trustee. C)
3. In the event that none of the children of MICHAEL have
attained the age of twenty-five (25) years, Settlers appoint the following to serve as Co-
Trustees (with JEREMIAH MURPHY if he is then serving as a Co-Trustee, otherwise
without his service): (i) DIMITRI ECONOMOU (ii) ALEXANDER G. SPANOS, and
(iii) ADRIANA RUHL. In the event that DIMITRI ECONOMOU for any reason fails to qualify
or ceases to act as a Co-Trustee, Settlers appoint ALEXANDROS ECONOMOU to serve as a
Co-Trustee. In the event that ALEXANDER G. SPANOS for any reason fails to qualify or
ceases to act as Co-Trustee, Settlers appoint JOHN SPANOS to serve as a Co-Trustee. In
the event that ANDRIANA RUHL shall for any reason fail to qualify or cease to act as a Co-
Trustee, Settlers appoint NICOLETTA RUHL to serve as a Co-Trustee. If JEREMIAH
MURPHY, for any reason (including death), becomes unable or unwilling to act as a Co-
81
Exhibit 1, Page 115

Trustee, the vacancy in the office of Co-Trustee caused by his inability or unwillingness to
serve shall not be filled (unless there is only one other Co-Trustee then serving}. The order
set forth in this subpart 3 shall be superseded by the order set forth in subpart 2 in the
following respects: (i} upon any child of MICHAEL attaining the age of twenty-five (25)
years, that child shall serve as a Co-Trustee in place of the youngest person otherwise
designated to then serve under this subpart 3; and, (ii) upon any two children of MICHAEL
attaining the age of forty (40) years, subpart 3 is superseded by subpart 2.
oldest generation of MICHAEL then living. For example, if MICHAEL has a child then living
(i.e., one grandchild of Settlers) and nine (9) grandchildren (great-grandchildren of Settlers)
1 then living, only that one grandchild of Settlers shall vote for that line of succession of
\
MICHAEL. If MICHAEL's line of succession had no grandchildren of Settlers then.living,
then the successor Trustee for MICHAEL's line would be elected by a majority of the then
living great-grandchildren of Settlers under that line. The person elected must be an issue
of Settlers or a bank, trust company or other corporate fiduciary, as determined by the
respective vote. The party entitled to vote may also change that designation by written
instrument from time to time. A guardian or guardian ad litem may vote on behalf of a
minor entitled to vote, provided however, that the guardian may not serve as a Trustee. In
the absence of said vote the vacancy in the office of Trustee of the MICHAEL SPANOS Trust
shall be filled by Eldest Succession of Sibling Line as above defined. The implementation of
this order of succession shall following the priority and age requirements in parts (A)
through (D) of subpart 6 of section 10.1. However, upon a vote of a majority then living of
82
Exhibit 1, Page 116

the current income beneficiaries of the respective trusts under the MICHAEL SPANOS
Trust, any Co-Trustee whose appointment arises under the Eldest Succession of Sibling
Line shall be able to make either of the following changes: (i) select a different issue of
Settlers to replace anyone otherwise appointed under the Eldest Succession of Sibling Line
or (ii) select any bank, trust company or other corporate fiduciary to replace anyone
otherwise appointed under the Eldest Succession of Sibling Line.
E. In the event that a further vacancy arises in the office of Trustee for
any trust after application of the foregoing, the designation of said successor Trustee shall
be made by designation of the Independent Trustee designated or elected in section 10.3
10.3 Independent Trustee
A. Settlors appoint their son MICHAEL to serve as Independent Trustee of
the trusts for the primary benefit of each of DEAN, DEA, and ALEXANDRA, for the purposes C)
set forth in Paragraph E.2. of Section 6.9. Settlers appoint ALEXANDRA as Independent
Trustee of the trust for the primary benefit of MICHAEL, for the purposes set forth in
Paragraph E.2. of Section 6.9. If MICHAEL cannot serve as Independent Trustee of the
trusts for the primary benefit of each of DEAN, DEA, and ALEXANDRA, then tlie order of
appointment of Independent Trustee for those trusts shall be as follows: (I) DEA (but not as
to DEA's Trust), then (ii) DEAN (but not as to DEAN's Trust). If ALEXANDRA cannot serve
I
as Independent Trustee of the trust for the primary benefit of MICHAEL, then the order of
appointment of Independent Trustee for that trust shall be as follows: (i) DEA, then (ii)
DEAN . Notwithstanding anything in this provision or in this instrument to the contrary, in
no event may a child of Settlers serve as Independent Trustee of any trust for the primary
benefit of that child. An individual serving as Independent Trustee shall not make
83
Exhibit 1, Page 117

, distributions to or for the benefit of any beneficiary under Paragraph E.2. of Section 6.9 in
a manner that will discharge any legal obligation of the individual who is serving as
Independent Trustee.
8. To the extent that there is a vacancy in the office of Independent
Trustee that is not filled by the provisions above, the Independent Trustee shall be one
individual or entity who is an 11 lndependent Trustee" as that term is used in IRC Section
674(c). Such successor Independent Trustee shall.be appointed by a vote of a majority of
the then living children of Settlors, or by the vote of only that one child then living if there is
only one child living. Said designation may be amended in like manner. In the event that
a further vacancy arises in the office of Independent Trustee of the GST Trust for any child,
the successor Independent Trustee (as that term is used in IRC Section 67 4(c) shall be
( appointed by certified public accountant then engaged by the Trustee of that child's GST
\.
Exempt Trust. Settlers recognize that none of their children fall within the definition of
Independent Trustee under the foregoing statutory reference or the regulations thereunder.
C. No compensation shall be paid to any issue of Settlers serving as an
Independent Trustee. Reasonable compensation shall be payable to an Independent
Trustee who is not an issue of Settlors.
D. In addition, upon the death of all of Settler's children, a successor
Independent Trustee (as that term is used in IRC Section 674(c)) may be selected by
majority vote with one vote allocated to each of the four family lines (or such lesser number
as there are issue of Settlers then living) with the majority vote designated by vote of the
living issue in the oldest generation of Settler's children then living. For example, if
ALEXANDRA has a child then living (i.e., one grandchild of Settlers) and nine (9)
84
Exhibit 1, Page 118

grandchildren {great-grandchildren of Settlors) then living, only that one. grandchild of (!
Settlers shall vote for that line of succession of Independent Trustee. In the event that a
given line has no grandchildren of Settlers then living, then the vote for that line for the
selection of the Independent Trustee shall be made by a majority of the then living great-
grandchildren of Settlers under that line.
10.4 Co-Trustees
In the event a relationship of Co-Trustees ever exists, the terms 11Trustee11 and
11
Co-Trustee11 shall be synonymous.
10.5 No Bond Required, Except as Expressly Designated
No bond shall be required of a non-corporate Trustee named or designated in
accordance with the provisions of this Section 10, except to the extent, if any, that a
designation of a Trustee or successor Trustee by a child of Settlers made pursuant to

C)
Section 10.2 expressly imposes requirement of bond for a designated Trustee.
10.6 Lack of Trustee; Change in Situs
If the Trustee and the successor Trustees designated in the preceding paragraphs
shall all for any reason cease or become unable to act as the Trustee, a majority of the
beneficiaries, or the sole remaining beneficiary, as the case may be, or the legal
representative of such beneficiaries or beneficiary to whom the current net income of that
separate trust is at the time authorized or required to be paid or applied may designate a
bank, corporate fiduciary, or trust company to act as the successor Trustee. In the event
that it becomes more convenient that the situs of each and any trust be moved to another
location within the United States, such relocation of the trust administration may be made,
provided further, that unless a bank, trust company or other corporate fiduciary is then
85
Exhibit 1, Page 119

serving as a Trustee and said trustee is· precluded by the law of such other state to serve as
a Trustee, then the vacancy so created shall be filled as otherwise authorized in this
Section 10, and failing that then as authorized in the first sentence of this Section 10.6
10.7 Resignation Procedure
Any Trustee may at any time resign the office as Trustee hereunder by delivering
written notice of resignation to the beneficiaries of the trust to which the resignation
pertains and to each of the other then-serving Co-Trustees of said Trust. The right of
resignation and the procedure for resignation shall apply to any Co-Trustee.
10.8 Successor Corporation
Any corporation which shall, by merger, consolidation, purchase or otherwise,
succeed to substantially all the personal trust business of a Trustee shall, upon such
succession and without any appointment or other action by any person, be and become
successor Trustee hereunder.
10.9 Powers of Successor Trustees and Acts of Prior Trustees
Any successor Trustee shall have, from and after appointment or succession to office
hereunder and without any Assignment or other action by any person, all the title, interests,
rights and powers, including discretionary rights and powers, which are by the provisions of
this agreement granted to and vested in the Trustee named herein and such successor
Trustee shall not be liable for any acts or omissions of any predecessor Trustee. An
additional or successor Trustee shall not have a liability to require an accounting of or be
liable for any action taken by a predecessor trustee and the additional or successor Trustee
shall be liable only for such property as the additional or successor Trustee shall receive.
86
Exhibit 1, Page 120

10.10 Majority Voting
In the event that there are Co-Trustees of any trust, the actions or inactions
approved by a majority of the Co-Trustees then serving shall be binding on that trust estate
and all Trustees of said trust.
( \
. ,)
87
Exhibit 1, Page 121

/ , 11. SIMULTANEOUS DEATH
In the event it is difficult or impractical to determine the order of death as between
the Settlers, each Settler shall be deemed to be the Surviving Settler.
12. RESIDENCE
On the death of the first Settler to die, the Surviving Settler shall have the right to
continue to occupy all real property in the trust estate that the Surviving Settler and the
Deceased Settler were using for residential purposes (whether on a full or part-time basis,
including resort property); provided, however, that the Surviving Settlor, in his or her
discretion, may direct the Trustee to sell any such property and replace it with or rent or
lease another residence, regardless of value, selected by the Surviving Settler. The Trustee
shall pay a portion of any mortgage or trust deed payments and any property taxes,
insurance, assessments, maintenance and ordinary repairs on all such property, or any rent
(
or lease payments out of income of the trust(s) in proportion to the trust's interest in the
property. The portion of such payments and expenses paid by the Trustee shall be an
amount that is proportionate to the Trustee 1s interest in such property. The remaining
portion of such payments and expenses shall be paid by the Surviving Settler personally or,
pursuant to his or her instructions, may be paid from the Survivor's Trust. The Surviving
Settler shall have the right, within one year of the death of the Deceased Settler, to
purchase the residence or exchange other property. for such residence, so that the surviving
Settler may own said residence free bf trust. The sale or exchange price of said residence
or the Deceased Settlor s interest therein shall be the federal estate tax value or, in the
1
absence of a federal estate tax return, it shall be the fair market value as of the date of
death of the Deceased Settler. The election under this paragraph shall terminate upon the
88
Exhibit 1, Page 122

death of the Surviving Settler. The sale shall be on the term of no cash down and a loan (J
for the total price at the minimum rate of interest provided for under the Internal Revenue
Code, as amended, to avoid the imputation of interest. The term of the note shall be
interest only. The note, if not previously paid in full shall be due in full one year after the
death of the Surviving Settler. The note shall be secured by a deed of trust against the
Surviving Settlor•s interest in the property. It shall not be due-on-sale and there shall be no
prepayment penalty. The note shall be in standard form. The election under this
paragraph is personal to the Surviving Settler and may not be assigned or transferred.
13. ANTI-CONTEST
Settlers have purposely made no provisions herein for any other person, whether or
not claiming to be an heir of either Settler or of any beneficiary, and if any person should
claim to be an heir of either Settler or of any beneficiary and as such should assert a claim
to any trust estate, or any part thereof, or should any person, whether a beneficiary under
this instrument or not mentioned herein, contest this instrument or the Will of any Settler or
object to any of the provisions of this instrument and/or Will, then to such person or
persons Settlers hereby give and distribute from the Exemption Trust the sum of One Dollar
and No/100 Dollar ($1.00) and no more, in lieu of the provisions which Settlers have made
or which Settlers might have made herein for such person or persons.
The following acts, singularly or in combination with any person, directly or
indirectly, shall constitute a contest:
(1) Contests this instrument or either of the Wills of the Settlers in whole
or part, or opposes, objects to or seeks to invalidate any of the provisions of this instrument
or of the Wills of either of the settler or Settlers.

(")
89
Exhibit 1, Page 123

(2) Claims entitlement by way of any written or oral contract.
.(3) Without reasonable cause commences an action or proceeding to
challenge the characterization of property under this instrument.
(4} Without reasonable cause challenges the validity of any other
declarations of trust or trust agreement, contract or agreement, beneficiary designation, or
other document executed by the settler or Settlors constituting part of the Settlors'
integrated estate plan or executed by another for the benefit of either of the Settlors.
Partnership, LLC and other corporate operating agreements, by-laws and buy-sell
agreements are not considered a part of the integrated estate plan for purposes of this
section 13, although they are highly significant to Settlors and the trust estate.
14. ESTATE AND DEATH TRANSFER TAXES
( 14.1 Except as provided in this instrument, estate tax arising on the death of a
Settlor shall be charged as provided by law under California Probate Code Section 20100
et seq.; provided however that any estate taxes arising on the death of the surviving Settlor
with respect to the GST Exempt Marital Trust shall be changed against the Non-Exempt
Marital Trust without,reimbursement, chargeback or liability against the exempt property
notwithstanding, anything in I.R.C. Section 2207A, as amended, or otherwise to the
contrary. Any right of the Non-Exempt Marital Trust to be reimbursed by the GST Exempt
Marital Trust for estate tax arising under IRC Section 2044, is waived.
14.2 In the event a situation arises whereby the charge, collection or payment of
estate, inheritance, generation-skipping transfer tax, or death taxes is not otherwise
determined by this instrument, or if determined by this instrument, the applicable trust
90
Exhibit 1, Page 124

estate or estate is insufficient for the payment of the tax, su_ch taxes (or the portion thereof) (--!
shall be paid, charged and collected as provided by law.
15. SITUS OF TRUST
The trust is established by the Settlers and accepted by the Trustee under the
laws of the State of California and all questions shall be determined under the laws of such
State.
16. DEFINITION OF TERMS
16.1 As used in this trust, the masculine, feminine, or neuter gender, and the
singular or plural number, shall each be deemed to include the others whenever the context
so indicates.
16.2 As used in this trust, the term 11 issue11 shall refer to lineal descendants of all
degrees and shall include ONLY natural issue of a child of Settlers, unless a child of
C)
Settlors, or natural issue of Settlors, elects to expand the definition of issue with respect to
that natural child or natural issue of Settlers, which expansion may include any or all of the
following, but not be greater in scope than the following:
(1) A child adopted by a child of Settlors, or by the issue of a
child of Settlors, provided that the person adopted is under age sixteen (16) years at the
time of adoption and is not the child of the spouse of the Settlers' child or of the spouse of
the issue of a child of Settlors who is adopting the child.
(2) A natural child of a person who is permitted to be an issue by virtue
of the expansion of the definition above provided in this section 16.2.
91
Exhibit 1, Page 125

(3) An adopted child of an issue who is permitted to be deemed an issue
of Settlers or of a child of Settlers provided is under age sixteen (16) years at the time of
adoption and is not the child of the spouse of the Settlers' child or of the spouse of the
issue of a child of Settlers who is adopting the .child.
An expansion of the definition authorized by this section 16.2, if exercised, may only
be exercised by Will or written acknowledged instrument exercised by the child or issue
holding that power. Said expansion authorization is personal to the power holder and may
not be exercised by a power of attorney, conservator, or other representative of that child or
issue. Any authorized designation may be revoked and/or amended from time to time by
the particular child or issue.
In no event, however, shall the term "issue" include foster children, step-children,
/ \
persons raised as though a child or dependent, or others outside of the definition above
\. )
I
provided.
16.3 In the event that a child or issue in whose name a trust is named changes his
or her name, the name of that beneficiary's trust may be modified to correspond to said
name in the discretion of the Trustee of that trust.
16.4 Reference to the "Code" without further modification .or to "IRC" shall refer to
the Internal Revenue Code, as amended.
17. SETTLOR'S RETENTION OF RIGHTS IN POLICY
The owner of each policy of insurance made payable to any trust created in this
instrument reserves all rights, options and privileges conferred on the owner by the terms of
the policy, including, but not limited to, change of its beneficiary designation,
92
Exhibit 1, Page 126

I
hypothecation of the policy, and borrowing of funds from the insurer. Sickness, disability or ( "1
other benefits and all dividends. paid during the insured's lifetime may be paid by the
insurer to the owner. The Trustee shall not be responsible for the Settler's acts or
omissions relating to any insurance policy.
18. UNENFORCEABLE PROVISIONS DISREGARDED
If any provision of this trust is determined by any court of competent jurisdiction to
be invalid, illegal, or unenforceable to any extent, that provision shall, if possible, be
construed as though more narrowly drawn, if a narrower construction would avoid such
invalidity, illegality, or unenforceability or, if that is not possible, such provision shall, to the
extent of such invalidity, illegality, or unenforceability, be severed, and the remaining
provisions of this trust agreement shall remain in effect.
19. CONFLICTS REGARDING PERSONAL EFFECTS PROVISIONS

C)
In the event of a discrepancy between this trust instrument and the Will of a Settler
or other written instruction of a testamentary nature with respect to the disposition of
personal or household effects, the provisions of the Will or testamentary instrument shall
supersede this trust instrument.
20. NINETY -DAY SURVIVORSHIP REQUIREMENT
The right of any person to take any interest under this trust initially, successively or
alternatively is conditioned upon his or her survivorship for a period of ninety (90) days of a
person whose death under the terms of this Declaration determines such initial, successive
or alternative interest. If the person with the right to take under this Declaration does not
survive for said ninety (90) day period, the person whose death determines the initial,
93
Exhibit 1, Page 127

successive or alternate interest, then such person shall be deemed to have predeceased the
person whose death determines such initial, successive or alternative interest.
21. MEDIATION AND ARBITRATION
21.1 Mediation
A. Settlers love their children and issue. Settlers requests that their
children and issue support Settlers' estate plan and respect the selection of Trustees made
by the Settlers, and authorized by Settlers, pursuant to this trust instrument. In any event,
this estate plan is that of Settlers, and they desire and expect that their wishes will be
honored. In the event that a dispute arises between any person interested in the trust and
the Trustee which cannot be resolved informally, such dispute shall be submitted to
mediation rather than litigation. The provisions for mediation under this section 21. lshall
be given expansive application to include all disputes related to trust administration and
)
interpretation and are not limited to matters arising from family dynamics. Settlers
designate JAMS (Judicial Arbitration and Mediation Service) in Sacramento, California (or
such other office if unanimously agreed to by the parties), to conduct such mediation. The
Settlers direct that said submission to mediation be meaningful and that the relevant
parties participate in good faith in the mediation, and that said mediation shall be
concluded before the subject matter of the dispute is presented for arbitration under section
21.2, or in the event that arbitration of that dispute is prohibited by California Law, then
before the subject matter of the dispute is presented to the Superior Court of California, or
other court, for adjudication.
B. In the event that the dispute that was the subject of the impasse
through mediation is brought to arbitration (or if prohibited by California law to be
94
Exhibit 1, Page 128

arbitrated then before the court), in whole or part, for determination and/or adjudication, (~)
the.arbitrator (in the case of arbitration) or the Superior Court Judge (in the case of a matter
with respect to which arbitration is prohibited as a matter of California law) may, at the
request of any Trustee, request that the mediator or other source provide evidence either to
determine whether or not the disputing parties meaningfully participated in mediation in
good faith, or if mediation did not occur, to determine that the direct submission to the.
court was necessary, in fact, to protect the trust against injury that could not have been
avoided had the dispute been brought first to mediation. In the event that a finding by a
court is .made that an interested person did not participate in mediation in good faith or that
direct submission of the dispute to arbitration or the court was, in fact, not necessary to
avoid injury to the trust estate which would otherwise have arisen had the dispute first
been submitted to mediation, then the costs of litigation incurred by the trust estate with ()
respect to mediation and that litigation shall be charged against the trust estate or share of
that interested person, even if the dispute was raised in good faith. In addition, the
arbitrator may award sanctions (or the Court may award sanctions if arbitration of the
matter is prohibited as a matter of California law) and legal fees as provided in Probate
Code Section 17211, as amended, in appropriate circumstances as the a.rbitrator (or Court)
determines. In the event that the impasse is not resolved by mediation, the matter shall
then be submitted to mandatory arbitration as provided in section 21.2, unless such
arbitration is prohibited as a matter of California law. In the case of prohibition for
submittal to arbitration as a matter of California law, the Superior Court of the State of
California with jurisdiction over the trust shall retain the power to resolve said issue and
\.).
95
Exhibit 1, Page 129

fashion such remedy and make such determinations as said Court determines appropriate
to carry out and implement to this trust and the intent of the Settlers.
C. The provisions in this section 21 for mediation with direction for
arbitration in the event that mediation is unsuccessful have been established in order to
protect the privacy of the parties and affairs of the trust estate; and, potentially reduce the
expense of trust administration. In the event that the court process must ever be utilized,
Settlors request that protective orders be issued and that documents, exhibits, petitions,
pleadings, and discovery be sealed to preclude disclosure to the public to the fullest extent
permitted by law to avoid public disclosure.
21.2 Binding Arbitration
A. To the extent that any dispute cannot be settled by mediation
( pursuant to Section 21.1 of this instrument, such dispute shall be settled by submission of
such dispute to binding arbitration by JAMS (Judicial Arbitration and Mediation Service) in
Sacramento, California (or such other office if unanimously agreed to by the parties). Such
binding arbitration shall be conducted before a retired judge or other experienced, qualified
attorney who is an employee of JAMS (or an independent contractor regularly hired by
JAMS) qualified to arbitrate the dispute, and mutually agreeable to the parties involved in
the dispute. The binding arbitration shall be conducted in accordance with the rules of
JAMS with respect to binding arbitration, which shall be subject to any limitations or
restrictions imposed by California Code of Civil Procedure Section 1282 et seq., as
amended. The costs of the arbitration, including but not limited to the arbitrator's fee and
the costs for use of the facilities, shall be paid equally by each disputing side pending the
determination in arbitration in the dispute. Said arbitration expenses and costs for use of
96
Exhibit 1, Page 130

the facilities, in addition to all attorneys' fees and legal costs shall be awarded to the
prevailing party or the party most prevailing, unless the arbitrator, in his or her sole
discretion, determines that such award of arbitration fees, facilities fees, attorneys' fees and
legal costs in that manner would be inequitable, in which case the arbitrator may award
some lesser amount of attorney fees and legal costs for the benefit of the prevailing party or
the party most prevailing.
8. For purposes of this Section 21.2, reference to a dispute shall include
a dispute of an issue or any portion thereof that is not settled by mediation and any matter
to which reference to mediation is prohibited as a matter of law.
C. It is the intent of the Settlors that the arbitrator seal or otherwise deal
with documents, exhibits, petitions, pleadings, and discovery in a manner to preclude
disclosure to the public to the fullest extent permitted by law to avoid public disclosure,
and the usual procedural rules of JAMS may be altered by the arbitrator to the extent
necessary to achieve this purpose.
D. In no event shall the arbitrator have the power to amend, alter, or
modify the terms of this trust instrument nor grant any remedy that is either prohibited by
the terms of this instrument or not available in a court of law.
E. To the extent allowable under California law, it is the intent of each
Settler that if a beneficiary is a party to a dispute that cannot be settled by mediation
pursuant to section 21.1, and that beneficiary refuses to submit such dispute to binding
arbitration (pursuant to the terms of this Section 21.2) before submitting such dispute to
the court, then such refusal by said beneficiary to submit the dispute to binding arbitration
shall be considered to be a contest of this instrument and of the integrated estate plan of
97
Exhibit 1, Page 131

( " Settlers, as set forth in section 13 of this instrument. In the event that any beneficiary, or
other interested party, seeks a determination under Probate Code Section 21320, et. seq.,
of whether a particular motion, petition or other act by that beneficiary or interested person
is a contest, the petition, application or other seeking of said determination shall be
submitted to arbitration under this section 21.2 to the fullest extent permitted by law; and,
in the event that said petition, application and/or seeking of said determination must be
filed with the Probate Court, it shall, nevertheless to the fullest extent permitted by law, be
filed under seal as provided in paragraph C of this section 21.2.
F. It is the intention of the Settlers that this Section 21.2 be construed to
be enforceable under California Code of Civil Procedure Section 1281 et seq., as amended,
but if any part of this Section 21.2 is construed to be unenforceable, then to the extent
( ~ such enforceable and unenforceable parts are severable, this Section 21.2 shall continue to
apply to the enforceable part, and the unenforceable part may be submitted for Court
determination, subject to the relevant provisions of Section 21.1 and the other provisions of
this instrument.
IN WITNESS WHEREOF, the Settlers and Trustees have executed this Amended and
Restated Declaration of Trust as of the day and year first above written.
FAYElSPAN£>S
t:::::/
98
Exhibit 1, Page 132

State of California )
) ss.
County of San Joaquin )
On a,,...~ j' , 2007, before me, Nannette P. Hatch , Notary Public,

personally appe8red d. SPANOS and FAYE SPANOS, personally known to me.for proved te me~
, eA tA&-basis of satisfaetery evideRee~ to be the person(s) whose name(s)-is/are subscribed to the
within instrument and acknowledged to me that fl$he/they executed the same i~/their
authorized capacity(ies) and that by4Hs/her/their signature(s) on the instrument, the person(s) or
the entity upon behalf of which the person(s) acted, executed the instrument.
WITNESS my hand and official seal.

~e1tzf Notary Public
) ss.
County of...$!V)) '\'[ot9QO) N
On ~ 1 , 2007, before me, NannetteP. Hatch , Notary Public,
personally appeadOb.N A. SPANOS, personally known to me '8r r,10\led to me on the easis ef.-
.satiSfaetef'/ evideRCe) to be the person(~ whose name(i) is/are-subscribed to the within instrument
( \
and acknowledged to me that he/st:ie/they executed the same in his/Rer/Uteir authorized , I
capacitytiei,) and that by hisA1efftheif signature(!!ij. on the instrument, the personfsl or the entity "'··· /
upon behalf of which the person~ acted, executed the instrument.
) ss.
County of San Joaquin )
On ~ 4 , 2007, before me, NannettaP. Hatch , Notary Public,

personally appeedO~ SPANOS BERBERIAN, personally known to me-for proved to 11,e on-the-
-basis of satisfactory evideneet to be the person~whose name(~ is/ar+subscribed to the within
instrument and acknowledged to me that-Re/she/they-executed the same in-1:+is/her/#lefF..authorized
capacity~ and that by fl+S/her/,tt-,ei.r::..signature(<St on the instrument, the person~or the entity
upon behalf of which the personts_) acted, executed the instrument.
~:·e11d Notary Public
99
Exhibit 1, Page 133

EXHIBIT 2
Exhibit 2, Page 134
Exhibit 2, Page 135
Exhibit 2, Page 136
EXHIBIT 3
esmms
L O 5 ANGELES
November 8,2019
Dea Spanos Berberian
Michael Spanos
Alexis Spanos Ruhl
Re: Chargers Governance
Dear Dea，Michael and Alexis:
I write in my capacity as Managing Member of each of the Chargers entities,

including Chargers Football Company, LLC，Blue and Gold Tenant LLC, Chargers Football
HoldCo LLC，and any other entity formed in connection with the Chargers’ assets or business
opportunities (each，with respect to its own organizational documents and agreements，the
“Companv’l Without limiting any rights of the Spanos family Members (collectively, the
“Members”、* or obligations I，have under any of the Company’s organizational documents,
contracts or applicable law in carrying out my duties as Managing Member of each Company and
Control Owner as defined by the NFL，I agree to be bound by this letter, which can be enforced
against me，and abide by the following governance principles and procedures:
A. Aiimmil of Certain Acauisitkms and Capital Expenditures and

Commitments
In my capacity as Manager, I will not cause the Company to (i) acquire any
capital asset，make any capital expenditure, or incur any non-team personnel related commitment
in excess of $40,000,000, without the prior written approval of Dea, Michael and Alexis or (ii)
agree to another relocation of the team’s home stadium without the prior written approval of
each of Dea，Michael and Alexis. Any approval by Dea, Michael and Alexis called for in this
letter shall not be unreasonably withheld.
Exhibit 3, Page 137

Hoag Peifomtance Center • 3333 Susan St.f Costa Mesa, CA 92626 • chargers.com
B. Mandatory Reporting Requirements to Members
In my capacity as Manager，I agree to cause the Company to provide its Members

(a) quarterly unaudited financial statements from the Company within forty-five (45) days
following the end of such quarterly period, including a narrative discussing such quarterly
period, and (b) annual financial statements (as audited if applicable) within ninety (90) days
following the end of each fiscal year, including a narrative discussing such fiscal year.
I also agree to cause the Company to provide the Members with copies of the
following as they are received by the Company/Manager:
Any material reports or material correspondence sent to or by

any lender or governmental entity or the NFL;
ii. Any amendments to the documents or terms of the financing

referred to as the “Goldman Loan” or any documents relating
to any refinancing of the Goldman Loan;
m. Any press release related to the Company or its subsidiaries in

advance of its release; and
IV. Any updates regarding information previously provided to the

Members, as soon as the Company/Manager learns of any
material misinformation or material omissions related to
information previously provided to such Members.
The Members also shall have the right to inspect the following documents of the
Company:
i. All books, records and reports of the Company; and
ii. Any information/documents regarding any pending or

threatened actions or claims against the Company that would
reasonably be expected to result in a material liability to the
Company.
C. Meetings
Meetings of the Members will occur as often as reasonably necessary, but not less
than four times per year, at the end of each fiscal quarter. Customary written notice and an
agenda will be provided to the Members of any meetings at least seven (7) days prior to the date
of such meeting, which notice shall include all agenda items to be discussed including an item
-2-
Exhibit 3, Page 138
reserved for any Member who may wish to add an item to the agenda, along with all written
materials reasonably necessary for the Members to consider and discuss each item on the agenda.
Any Member may call a special meeting of the Members at any time on customary written notice
delivered no less than twenty (20) days prior to the requested meeting date. Each Member may
invite one family member from the third generation of the Spanos family to one meeting per
year, provided that such attendee shall execute the confidentiality agreement described in Section
G below. In that connection, this will confirm that Jerry Murphy has retired, and will not
participate in any such meetings or have any involvement in the management of the Company in
any manner whatsoever. Mr. Murphy may, however, continue to visit the Company’s offices
and attend Chargers’ games.
D. Capital Contributions
No Member will have an obligation to make capital contributions or provide

guarantees or other financial accommodations to or on behalf of the Company or any subsidiary
thereof, subject to the provisions of the LLC Agreement of each Company.
E. Equity Transfers
I confirm that that certain Right of First Refusal Agreement, dated June 1, 2002,
as amended on June 17, 2015, by and among the Members is still in full force and effect, and that
first refusal rights apply to the equity interests of each Company. Additionally, I agree that the
Members shall have preemptive rights to purchase any equity, including, without limitation, any
security convertible into equity of the Company that may be issued by the Company in such
amounts for such Member to maintain his or her pro rata share of the equity of such Company,
on the same terms and conditions as the Company offers such securities to any other person.
F. Liquidity： Sale of the Company
Although there can be no assurance that a sale will actually be consummated, no

later than thirty (30) days following the conclusion of our fifth (5th) season in the new SOFI
stadium, I agree, in my capacity as Manager and on behalf of the Company, to retain an
investment banking firm reasonably acceptable to Dea, Michael and Alexis to market the sale of
the Company, and I will cooperate in such marketing effort in order to maximize value for the
benefit of all Members. I shall commence the process to interview and identify qualified
investment banking firms to present to Dea, Michael and Alexis reasonably in advance of the
retention and arrange for meetings among the parties as part of the engagement process. In the
event that any Member wishes to sell his or her interest in the Company as a result of the above
referenced process or at any other time, I hereby provide my advance consent to such transaction
subject to the rules of the NFL regarding such sales and the first refusal rights referred to in E.
above.
-3-
Exhibit 3, Page 139
G. Confidentiality
Any information disclosed to you pursuant to this letter which involves

proprietary, confidential or non-public information belonging or related to Chargers’ entities will
be subject to your entering into a single customary non-disclosure agreement prior to such
disclosure.
Sincerely yours,
州너卜/
Dean A. Spanos
-4-
Exhibit 3, Page 140

EXHIBIT 4
Exhibit 4, Page 141
Exhibit 4, Page 142
Exhibit 4, Page 143
Exhibit 4, Page 144
Exhibit 4, Page 145
Exhibit 4, Page 146
Exhibit 4, Page 147
Exhibit 4, Page 148
Exhibit 4, Page 149
Exhibit 4, Page 150
Exhibit 4, Page 151
Exhibit 4, Page 152

Dea Spanos Berberian Petition

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Dea Spanos Berberian Petition

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1 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP

A Limited Liability Partnership

27 other owners (March 24, 2021), ESPN

2021) FOS Exclusive <https://frontofficesports.com/jeff-bezos-washington-football-

27 2018) Chargers News <https://www.chargers.com/news/spanos-family-statement-on-the-

5 Expenses (legal, accounting, etc. and subject to ($500,000)

22 The Trustee is not compelled to sell assets or make acquisitions

26 (Ex. 1 [Trust at § 7.24(A)].)

28 (Ex. 1 [Trust at § 7.24(F)].)

6 (Id. at 358-359.) (Emphasis added.)

8 SHALL BE GOVERNED BY CALIFORNIA

22 Adriana Ruhl Cox Benjamin Cox

25 Nicoletta Ruhl Unborn issue

6 (c) Nothing in this section affects any of the following:

7 (1) Requirements for notice to a person who has

10 (2) Availability of a guardian ad litem pursuant to

This AMENDED AND RESTATED DECLARATION OF TRUST is executed this ...._____

to them pursuant to Article TENTH of said Trust.

1. TRUST NAME ................................................ 1

2. SETTLORS' FAMILY ............................................ 2

3. . TRUST ASSETS ............................................... 2

4. POWER TO ALTER, AMEND OR REVOKE ............................. 4

5. DISTRIBUTION DURING JOINT LIFE OF SETTLORS ..................... 5

6. DISTRIBUTION UPON DEATH OF SETILORS .......................... 7

7. POWERS OF TRUSTEE ........................................ 40

8. SPENDTHRIFT PROVISIONS ..................................... 67

9. TERMINATION .............................................. 67.

10. DESIGNATION OF TRUSTEES AND OFFICE OF TRUSTEE ................ 69

11. SIMULTANEOUS DEATH ....................................... 88

12. RESIDENCE ................................................ 88

13. ANTI-CONTEST ............................................ .- . 89

14. ESTATE AND DEATH TRANSFER TAXES ............................ 90

15. SITUS OF TRUST ............................................. 91

16. DEFINITION OF TERMS ........................................ 91

17. SETTLOR1S RETENTION OF RIGHTS IN POLICY ....................... 92

19. CONFLICTS REGARDING PERSONAL EFFECTS PROVISIONS .............. 93

20. NINETY -DAY SURVIVORSHIP REQUIREMENT ........................ 93

21. MEDIATION AND ARBITRATION .................................. 94

("MICHAEL"), DEA SPANOS BERBERIAN ("DEA"), and ALEXANDRA SPANOS RUHL

has any genetic material on deposit with anyone or anywhere.

without change of its community or separate property character.

of that property, whether community, separate of either of them, or otherwise. Settlers

property that would otherwise be subject to administration under a probate proceeding

title has, in fact, been transferred to the Trustee.

4. POWER TO ALTER. AMEND OR REVOKE

specifically granted in the Power of Attorney.

5.2. Payments of Principal

request. Distributions of principal to or on behalf of Settlors shall be made in a liberal

manner and the rights of remainder beneficiaries shall be of secondary importance.

of Settlers as he or she has with respect to any other community property.

5.4. Payments to Incapacitated Spouse

If at any time, either in the Trustee•s discretion or as certified in writing. by two

licensed physicians, either spouse has become physically or mentally incapacitated,

incapacitated Settlor, either in the Trustee's discretion or as certified by two licensed

property so paid or withdrawn shall be held and administered as community property by

separate estate, as the case may be.

(Document continued on next page.)

administer and distribute the trust estate as follows:

6.1 Deceased Settler's Expenses

belongings, jewelry, furnishings, artwork, collections, personal effects, and other

estate tax or GST tax.

6.3. Division Into Shares Upon Death of Deceased Settlor

B) and the Exemption Trust (Trust C).