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HomeMy WebLinkAboutRES 042225-5.C - ETJ Disannexation, Kallus Revocable Living Trust, 44.66 acres, 3350 and 3418 FM 971RESOLUTION NO. CM ZZ 25 Jf. C- A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS ("GEORGETOWN") RELEASING APPROXIMATELY 44.66 ACRES OF LAND FROM THE CITY OF GEORGETOWN'S EXTRATERRITORIAL JURISDICTION ("ETJ"), SAID LAND IDENTIFIED BY THE WILLIAMSON COUNTY APPRAISAL DISTRICT AS PARCELS R332247, R039101 AND R039116 AND BEING LOCALLY KNOWN AS 3350 FM 971 AND 3418 FM 971, GEORGETOWN, WILLIAMSON COUNTY, TEXAS, RESULTING IN A REDUCTION OF GEORGETOWN'S ETJ; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on April 9, 2025, the City of Georgetown, Texas, received a petition requesting release from its ETJ of an approximately 44.66 acre tract of land in the Joseph Berry Survey (the "Petition"), a true and correct copy of such Petition being attached hereto as Exhibit A and incorporated herein by reference; and WHEREAS, pursuant to Subchapter D of Chapter 42 of Local Government Code, landowners or residents may submit a petition seeking release of an area of land from the City's ETJ; and WHEREAS, the City Secretary has reviewed the Petition and confirmed that it meets the requirements of Subchapter D of Chapter 42 of the Local Government Code and the petition requirements of Chapter 277 of the Election Code. NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS: SECTION 1. The City Council of the City of Georgetown, Texas ("City Council"), does hereby find that the forgoing recitals are true and correct and adopts the recitals by this reference for all purposes. SECTION 2. To the extent required by state law, the City Council does hereby adjust the boundaries and limits of the ETJ of the City of Georgetown, Texas, such that the ETJ of the City of Georgetown, Texas, shall be and is hereby adjusted to release and remove the Area subject to the Petition, as such Area is more particularly described and depicted in Exhibit B attached hereto and incorporated herein by reference, from the ETJ of the City of Georgetown, Texas. SECTION 3. The City Council is not consenting to this reduction of its ETJ except as required by state law. SECTION 4. This Resolution shall take effect immediately upon its passage. Resolution No. QH 7-Z7.S - 5. L Page I 1 Release of Petition Area — Kallus Revocable Living Trust PASSED AND APPROVED by the City Council of the City of getown, Texas, on the ZZna dayof � 1 , 202f CITY 9F GEORGETOWN, TEXAS C? ATTEST: By: Robyn Densm re, City Secretary APPROVED AS TO FORM: By: SkyAMass n,City Atto�mey Schroeder, Mayor Resolution No. oLi 2 2 Z J —.5 • c- Page 12 Release of Petition Area — Kallus Revocable Living Trust Exhibit A Petition Resolution No. Ck ? Release of Petition Area APR - 9 2025 Georgetown City Secretary's Office CITY SEC. Robyn Densmore Georgetown City Hall 808 Martin Luther King Jr. St. Georgetown, Texas 78626 Petition For Release Of Property From Extraterritorial Jurisdiction Theodore J. & Mary E. Kallus TRS of Revocable Living Trust Known as Ted and Mary Kallus We are 100% owners of the property at 3350 CR 971 Georgetown, Texas 78626 (the Property) pursuant to the deed recored at Document NO. 9449681 in the Official Public Records of Williamson County, Texas. Deed Of Trust dated January 10 1986 recorded in Volume 1305, page 232 Williamson County Texas Special Warranty Deed 2006015050 Filed and recorded 02/28/2006 Williamson County Texas We are the sole owners of the property known as 33511332247 Legal Description: AW0063 BERRY, JOSEPH SUR., ACRES 19.06, R039101 Legal Description: AW0063 BERRY, JOSEPH SUR., ACRES 22.692 AND R039116 Legal Description: AW0063 BERRY, JOSEPH SUR., ACRES 1.0 all as part of 1 Deed. The property listed 3350 FM 971 Georgetown, Texas 78626 is located within the Extraterritorial Jurisdiction of Georgetown, Texas We the sole property owners wish the property be released from the Extraterritorial Jurisdiction of Georgetown, Texas We hereby petition the City of Georgetown, Texas and request the following: That the City of Georgetown release the Property, as described above by metes and bounds in Exhibit A, map Exhibit B, and Exhibit C a copy of said THE THEODORE J. KALLUS and MARY E. KALLUS REVOCABLE LIVING TRUST AGREEMENT, from the Extraterritorial Jurisdiction of Georgetown, Texas We the sole property owners believe that this Petition complies with Texas Property Code Chapter 42, Subchapter D, and with Texas Election Code Chapter 277. PAGE 1 Petition For Release Of Property From Extraterritorial Jurisdiction Theodore J. & Mary E. Kallus TRS of Revocable Living Trust Known as Ted and Mary Kallus See attachments: Exhibit A Exhibit B Exhibit C TRUSTORS/TRUSTEES FOR: THE THEODORE J. KALLUS and MARY E. KALLUS REVOCABLE LIVING TRUST (D.O.B.) Residence of Williamson County in the State of Texas U Signed This Day TRUSTOR/TRUSTEES FOR: THE THEODORE J. KALLUS and MARY E. KALLUS REVOCABLE LIVING TRUST ( D.O.B. ) Residence of Williamson County in the State of Texas Signed This Day PAGE 2 EXHIBIT "A" LEGAL DESCRIPTION Or, AREA TO BE REMOVED FROM THE EXTRATERRITORIAL JURISDICTION [Please See Attached] 3.,_C:71'dh)c, Im""of•maiion. Deed ot* Trust daied Janua y 10. 198'. recordzu r ':'o[ttme 1305. Paco ?32, Official Records, Williamson County, Texas; and assigned by instrument dated October 18, 1991, recorded in Volume 2075, Page 434. Official Records, Williamson County, Texas; and subsequently assigned by instrument dated august 4, 1993, recorded in Volume 2363, Page 001, Official Records, 1Villiamson County, Texas; and assigned by instrument dated May 12. 1994, recorded in Volume 2561, Page 0776; Official Records, Williamson County, To-mis. Property BEING 44.660 acres of the Joseph Berry Survey, Abstract #63, in Williamson County, Texas, exclusive of the 1\1 K &. T Railroad R O W which crosses this tract, described below part of a tract of 145 acres described in a deed from Jack Rice to Lott 13. Rogers dated July 10, 1951, of record in Volume 372, Page 40, Deed Records, Williamson County, Texas. BEGINNING at a point .in the center of the San Gabriel River, at the Southwest corner ol::aid 145 acre tract and the Southeast corner of a tract conveyed by J. g.o 1mLi`:', 1 -1 j5, 111 ih•:i West line of the Joseph Berry Survey and approximately 1175 varas from the Southwest corner of same. THENCE North 19' West with the Wes( line of the Berry Survey and a fence along the West line of the 145 acm, tract, at 1079.8 feet cross the; South R O W line of the Ail K & T Railroad which runs North '771 35' Fit, 831,2 feet: to a point in the East line of this tract, at 1180.5 feet the Borth R O W of the Railroad, in all 1339 feet to an iron stalk beside a fence corner post at the NorthWest corner of the 145 acre tract. T , VOL 2 617 PAGE 0 4 9 8 THENCE North 810 50' Bast 409 feet and North 790 10, East, 429 feet with the South R ® W fence of the old Georgetown Weir County Road, to set an iron stake for the Northeast corner of this tract. THENCE South 19" East at 1115.8 feet pass an iron stake on the North R O W line of the Railroad at 1216.5 feet pass an iron stake on the South R O W line of the Railroad at about 2460 feet set an iron stake on the North bank of the San Gabriol River, in all 2563 feet to a point in the carter of the River, for the Southeast comer of this tract. THENCE South 610 10' West 37.5 feet and North 840 West, 870 feet with the center of the River, upstream, to the POINT OF L'Oer-R,�J J\'G. NOTE: Thero is excepted the 100 feet wide Railroad R ® W r(:;kaTe: to above, described as follows: BEG t�`�NIISIG at a port in the West line of the 44.660 acre tract, North 19° West, 1079.8 feet from the Southwest corner of sarne, in the South R O W line of the Railroad. THENCE .North 19" West, 100.7 feet. THENCE North 770 35' Fast, 831.2 feet with North R O W lime to the East line of the 44.66 acre tract. THENCE South 190 Lust, 100.7 feet to the South R O W line of the Railroad. THENCE South 770 35' West, 831.2 feet to the POINT Op l3LG1-1jtiMgG-) containing, 1.908 acres. 14125, 10:38AM Williamson Central Appraisal District Map 1 I + 1 ��.qn FM�G71 rZanrnntnvM Parcels: R332247 Parcel R332247 Identification Number Owner KALLUS THEODORE J & MARY ETRS OF REVOCABLE LIVING TRUST Site Address 3418 FM 471, GEORGETOWN, TX 78626 Deed Acres 42.752 Abstract AW0063 - Berry, Joseph Sur. -"' Entities CAD,GWI,RFM,SGT,F08 Book 1` Page Instrument 2006015050 Number Map Name 2.0236 �5. WCAD -U,—.:.lL Search Ic�am to Pecan Pa �`� �1 1 Esi hops:/lpubllcdatamcad.orgtparcelmap, 11 EXHIBIT "B" Williamson Central Appraisal District Tax Roll Detail [Please See Attached] R332247 KALLUS 3418 FM 971, 202 v (tiJA THEODORE J & GEORGETOWN, MARY E TRS OF TX 78626 REVOCABLE LIVING TRUST Page Pro,.e� y De-a4it v Property Status Active MARKET VALUE Property Type C1 Improvement Homesite Value N Legal Description AW0063 BERRY, JOSEPH SUR., ACRES 19.06 Improvement Non-Homesite Value N Neighborhood S901W - Mini -warehouse -east Georgetown Total Improvement Market Value N Account R-20-0063-0000.0005B Related Properties J 03910.1 R03911A Land Homesite Value N Map Number 2-0236 Land Non-Homesite Value N Effective Acres - Land Agricultural Market Value N Owner Narne KALLUS THEODORE J & MARY E TRS OF REVOCABLE LMNG TRUST Owner ID Exemptions Agriculture Use (AcNre) Percent 100% Ownership Mailing Address PO BOX 115 GRANGER, TX 76530-0115 Agent - Land Timber Market Value N Total Land Market Value N Total Market Value N ASSESSED VALUE Total Improvement Market Value N Land Homesite Value N Land Non-Homesite Value N Agricultural Use N Timber Use N Total Appraised Va!ue N Homestead Cap Loss A N Circuit Breaker Limit Cap Loss A Tom! Assessed Value N N/A values are not applicable toward to vah 13 Special Exemptions AG - Agrlcutture Use EXEMPTONS TAXING ENTITY EXEMPTIONS � lYAF E W,LJE TAX ROTE PER 100 A.,M O'J NT CAD -Williamson CAD N/A N/A WA fie M) el'� N/A N/A N/A * SiM�Y'[i,-airii( -r-O N/A NIA NIA Lf BE1y_Lyrli,r. CO N/A N)A N/A FWRD GL.GEu:'ge;QY+t N/A N/A N/A +eExpand?Collapse Improvement #t1 State Code Homesite Total Main Area (Exterior Measured) Market Value - F1 - Real, Commercial No 20,W sq. Ft N/A RECORD i r'PE )'EAR BUII T SCE. FT `JALJF ADD'L INFO 1 Main Area 1996 2,800 N/A v Detaiis 2 Main Area 1996 4,000 N/A a Details 3 Main Area 1937 2,700 NIA v retails 4 Main Area 1998 1,8DD N!A v De:aiis 5 Main Area 1998 1,000 N/A V Oetails 6 Main Area 1998 2,600 NYA V-Details 7 Main Area 1998 900 N/A u Details 8 Main Area 1999 660 N/A V Details 9 Base/Grave; 1995 32,000 N/A 0 Details Parking 10 Main Area 2008 1,200 N/A s Details 11 Main Area 3,000 NIA Details MARKET SEGME'Nf STATE CODE HC)MESITE AG USE 1Cv1 USF.. LA\D SIZE Vhl U E T'r P E 1 - Commercial Ft - Real, No N/A N/A N/A 1.000000 acres Commercial 2-Improved D1 -Qualified No N/A N/A N/A 18.060000 PastureI AG Use acres TOTALS 830,254 Sq. R I 19.06(10(1G acres 23 H� C'r'.L E:!,R 0,IPROVF,`,lFNT LA'tD %1ARl"'E1 AG Aci T1%-1 TI'• � /`FPknLED C ? CtP rSSESSE iv1PRKEi U5E f,-1ARKE7 USE IGtiS LQ55 2024 $960,935 $52,848 $1,013,793 $954,432 $2,619 SO $0 $1,016,402 so $0 $1,016,4 2023 $804,785 SS0,696 $85S,481 $915.574 $10,403 $0 $0 $86S,884 $0 $0 $865.8 2022 $657.330 $30,696 $708,026 $915,574 $6,845 50 $C $714,871 $D $0 $714,8 20ZI $614,500 $19,450 $633,950 $351,271 $5,472 $0 $C $639,422 50 SD $639,4 2020 $632,07S $21,977 $654,052 $396,916 $3,468 $D $0 $657,520 $0 $0 $6S7,5 GEED DATE 2/21/2006 101411994 4/1/1985 Sr:LER EjYH? I%SIR -- KALLUS, TED & MARY KALLUS THEODOREJ & 200601505D ELIZABETH MARY ETRS OF REVOCABLE LIVING TRUST DIXON, FRANK L KALLUS, TED & MARY ELIZABETH VETERANS LAND DIXON, FRANK L BOARD VETERANS LAND VETERANS LAND BOARD OF TEXAS BOARD L''J J`v1L,'?AGf 2617/2637/0477/0737 11591810 573/454/47.9/ 13-3D 33 1.uIlilclhlv PropeTIN V,il Lie ■. 600ft I a 23 R039101 Paige. Prope iy 9eta;ls KALLUS 3350 FIV 971, 202 v THEODORE J & GEORGETOWN, MARY E TRS OF TX 78626 REVOCABLE LIVING TRUST N/A �/ Property Status Active MARKETVALUE Property Type Land Improvement Homesite Value N Legal Description AWD063 BERRY, JOSEPH SUR., ACRES 22.692 Improvement Non-Homesite Value is Neighborhood G30SM50H • E GtoWn ISD Abstracts Total improvement Market Value N Account R-20-006.3-0000-0006 Related Properties &132W Land Homesite Value N Map Number 2-0236,2-0244 Land Non-Homesite Value N Effective Acres - Land Agricultural Market Value N Land Timber Market Value N Total Land MarketValue N Ovrner Name KALLUS THF,OOORE J & MARY E TRS OF REVOCABLE WNG TRUST Total Market Value N Owner ID ASSESSED VALUE Exemptions Agriculture Use (Actfve) Total Improvement Market Value 11 Percent 10096 Ownership Land Homesite Value N Mailing Address PO BOX 115GRANGER, TX76530-0115 Land Non-Homesite Value N Agent - Agricultural Use N Timber Use N Total Appraised Value N Homestead Cap Loss O N Circuit Breaker Limit Cap Loss Q TAXING, FNIITY CAD- Williamson CAD +[� E s• Ly'5 E5DAR L+� Gilt• 1.'SI:':ldJ?SA^ CQ L flE�`d(On5171Q F_Na1.1.tA L SGLGe�Egr Tota Assessed Value N Special Exemptions AG - Agriculture Use E XEi•A PTIOwS Exu 1A'T IS3�.': IAX:+ELE VALUE FAX RATE 1'flR 100 AF:IOUNT N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A N/A NIA -nn1��: .: __ _1'._ as1: .a:--$ri3772i :.,..,_ 4-el 1:C, 8 iC.9 N/A N/A N/A 12 r v Expand/Collapse Improvement #1 State Code Homesite Total Main Area (Exterior Measured) Market Value D2 - Farm Buildings Excluding No NIA Homestead RECORD TYPE YEAR BUILT SQ. FT VALUE ADD1 INFp 1 Barn 1986 N/A 4, Details LAND SEGJiEV'1" S1ATE CODE HO'AESITE MARKET�+AL'JE `i'� :ISE 71V� USE LANE S17_E TYPE 1 - Dry Crop II D3 - Dry Crop No N1A NIA N/A 22.692000 Or Farmland acres TOTALS 988A a1 SQ. ft / 22.692000 acres HS CBL AG AC TIM TIPA YEf,R IMPROVE-ME.NT LA'NI MARKET APPRAISED CAP CAP ASSESSE MAR1tE5 J5£ fihAR1(cT USE LOSS LOSS 2024 $22,932 $0 $22,932 $908,503 $11,945 $0 $0 $34,777 $0 $0 $34,7 2023 $22,932 $0 $22,932 $871,515 $13,071 $0 $0 $36,003 $0 $0 $36,0 2022 $22,932 $0 $22,932 $871,515 $8,600 $0 $0 $31,532 $0 $0 $31,5 2021 522,932 $0 $22,932 $334,367 $6,876 $0 $0 $29,808 $0 $0 $29,8 2020 $21,785 $0 $21,785 $377,BiS $4,357 $0 $0 $26,142 $0 $0 $26,1 DEED D A I E SELLER BUYER INSTR r VOLUIv1ElPf.GE 2/21/2006 KALLUS, TEE) & MARY KALLUS THEODORE) & 20060150SO ELIZABETH MARY E TRS OF REVOCABLE LIVING TRUST 10/4/1994 DIXON, FRANK L KALLUS, TED & MARY 2617/2637/0477/0737 ELIZABETH 4/1/1985 VETERANS LAND DIXON, FRANK L 1159/810 BOARD VETERANS LAND VETERANS LAND 573/454/429/13-30 BOARD OF TEXAS BOARD 22 IM(M 2 3 WCAD Property Owner Prop ettyAdd ress laxYea <02=1Marker Vatue R039116 KALLUS 3350 FM 971, 202 V N/A THEODORE J & GEORGETOWN, MARY E TRS OF TX 78626 REVOCABLE LIVING TRUST Page: , Property Details v 2025 GENERAL INFORMATION 2025 VALUE INFORMATION Property Status Active MARKETVALUE Property Type Residential Improvement Homesite Value N Legal Description AW0063 BERRY, JOSEPH SUR., ACRES 1.0 Improvement Non-Homeslte Value N Neighborhood G30SM50H - E Gtown ISD Abstracts Total Improvement Market Value N Account R-20-0063-OWH-0OD6 Land Homesite Value N Related Properties 8332247 Land Non-Homesite Value N Map Number 2-0236 Land Agricultural Market Value N Effective Acres - Land Timber Market Value N 2025 OWNER INFORMATION Total Land Market Value N Owner Name KALLUS THEODORE J & MARY E TRS OF REVOCABLE LIVING TRUST Total Market Value N Owner ID ASSESSED VALUE Exemptions Homestead ilActive), Tax Code 11.13(c) Exemption (Active) Total Improvement Market Value N Percent Ownership 10096 Land Homesite Value N Mailing Address PO BOX 115 GRANGER, TX76530-0115 Land Non-Homesite Value N Agent - Agricultural Use N Timber Use N Total Appraised Value N Homestead Cap Loss A N Circuit Breaker Limit Cap Loss A Total Assessed Value N 2025 ENTITIES & EXEMPTIONS TAXING ENTITY EXEMPTIONS EXEMPTIONS TAXABLE VALUE TAX RATE PER 100 AMOUNT CAD -Williamson CAD N/A N/A N/A r FQ• wmsn ESD #8 N/A NIA N/A CC y V�+ I• Wilhilmson CO HS, OA N/A N/A N/A (1 FR M• wmMM HS N/A N/A N/A FM/RD Lo 55-T- c,czrgetown HS, OA N/A N/A N/A ISD 1/2 2025 WPROVEMLNTS V Expand/collapse Improvement #1 State Code Homesite Total Main Area (Exterior Measured) Market Value E1 - Farm And Ranch Improvements- Yes 2,892 Sq. Ft WA residence RECORD TYPE YEAR BUILT SQ. FT VALUE ADDT INFO 1 Main Area 1975 2,892 N/A v Details 2 Open Porch - 300 N/A V Details 3 Detached Garage 748 N/A v Details 4 Deck 1994 852 N/A v Details 5 Site Improvement 1 N/A %0 Details 6 Canopy 2022 561 N/A r Details 7 Covered Patio 1986 322 N/A V Details 2025 LAND SE_,NIENTS LAND MARKET SEGMENT STATE CODE HOMESITE AG USE TIM USE LAND SIZE VALUE TYPE 1 - Residential E1 - Farm And Yes N/A N/A N/A 1.000000 acres Ranch Improvements - residence TOTALS 43,560 Sq. ft / 1.0DOGD0 acres VALUE HISTORY HIS CBL AG AG TIM TIM YEAR IMPROVEMENT LAND MARKET APPRAISED CAP CAP ASSESSE MARKET USE MARKET USE LOSS LOSS 2024 $340,068 $32,029 $372,097 $0 $0 $0 $0 $372,097 $6,593 $0 $365,5 2023 $301,551 $30,725 $332,276 $0 $0 $0 $0 $332,276 $0 $0 $332,2 2022 $411,440 $50,696 $462,136 $0 $0 $0 $0 $462,136 $152,463 $0 $309,6 2021 $278,828 $19,450 $298,278 $0 $0 $0 $0 $298,278 $16,757 $0 $281,5 2020 $233,893 $22,035 $255,928 $0 $0 $0 $0 $255,928 $0 $0 $255,9 :SALES HISTORY DEED DATE SELLER BUYER INSTR # VOLUME/PAGE 2/21/2006 KALLUS,TED & MARY KALLUS THEODORE I & 2006015050 ELIZABETH MARY ETRSOF REVOCABLE LIVING TRUST 10/4/1994 DIXON, FRANK L KALLUS, TED & MARY 2617/2637/047710737 ELIZABETH 4/1/1985 VETERANS LAND DIXON, FRANK L 1159/810 BOARD VETERANS LAND VETERANS LAND 573/454/429/13-30 BOARD OF TEXAS BOARD 2/2 u Expand/Collapse Improvement #1 State Code Homesite Total Main Area (Exterior Measured) Market Value E1 - Farm And Ranch Improvements • Yes 2,892 Sq. Fe N/A residence RECORD TYPE YEAR BUILT SQ, FT VALUE ADD'I- INFO 1 Main Area 1975 2,892 N/A v Details 2 Open Porch 300 N/A w; Details 3 Detached Garage 748 N/A v Derails 4 Deck 1994 852 N/A V Details 5 Site Improvement 1 N/A v Details 6 Canopy 2022 561 N/A v Details 7 Covered Patio 1986 322 NIA k, Details LAND SEGME.,.T STAIE CODE HOMESITE MARKET \G USE TI^A USE LAND SIZE VALUE TYPE 1 - Residential E1 - Farm And Yes N/A NIA N/A 1.000000 acres Ranch Improvements - residence TOTALS 43,560 Sq. ft / 1.001=1 acres H5 CBI_ AV AC Tlivl 71iV1 YEAR 1`.1PRO%eE,4E',T LAtiD MARKET APPRAISED CAP CAP ASSESSE MARKET USE MARKET USE LOSS LOSS 2024 $340,068 $32,029 $372,097 $0 $0 $0 $0 $372,097 $6,593 $0 $365,5 2023 $301,551 $30,725 $332,276 $0 $0 $0 $0 $332,276 $0 $0 $332,2 2022 $411,440 $50,696 $462,136 $0 $0 $0 $0 $462,136 $152,463 $0 $309,6 2021 $278,828 $19,450 $298,278 $0 $0 $0 $0 $298,278 $16,757 $0 $281,5 2020 $233,893 $22,035 $255,928 $0 $0 $0 $0 $255,928 $0 $0 $255,9 DEED DATE SELLER BUYER LCSTR -' VOL'Ui`JF PACE 2/21/2006 KALLUS, TED & MARY KALLUS THEODORE J & 2006015050 ELIZABETH MARY E TR5 OF REVOCABLE LIVING TRUST 10/4/1994 DIXON, FRANK L KALLUS, TED & MARY 2617/2637/0477/0737 EL IZAB ETH 4/1/1985 VETERANS LAND DIXON, FRANK L 1159/910 BOARD VETERANS LAND VETERANS LAND 573/454/429/13-30 BOARD OF TEXAS BOARD 2?2 R039116 KALLUS 3350 FM 971, N/A THEODORE J & GEORGETOWN, MARY E TRS OF TX 78626 REVOCABLE LIVING TRUST Page: p (,p Property Status Active Property Type Residential Legal Description AW0063 BERRY, JOSEPH SUR., ACRES 1.0 Neighborhood G305MSOH - E Gtown ISO Abstracts Account R 20-0063-ODUH-0006 Related Properties 13,03=1. R3,9224Z Map Number 2-0236 Effective Acres - Owner Name KALLUSTHEODORE J & MARY E TAS OF REVOCABLE LIVING TRUST Owner ID Exemptions Homestead (Active), Tax Code 11.13(c) Exemption (Active) Percent 100% Ownership Mailing Address PO BOX 115 GRANGER, TX 76530-0115 Agent - T.k I\G ENrI IN E<E>APTIONS CAD- Williamson CAD CL F39- 1t1 nIsr,�efi C? GWI- W,L;a rsorrQ HS, CA If-' RF14. Wmsn CO F&VIRD HS rn S T- G orgeM= HS, CIA M I MARKET VALUE Improvement Homesite Value N Improvement Non-Homesite Value N Total Improvement Market Value N Land Homesite Value N Land Non-Homesite Value A Land Agricultural Market Value h Land Timber Market Value N Total Land Market Value N Total Market Value N ASSESSED VALUE Total Improvement Market Value h Land Homesite Value N Land Non-Homesite Value N Agricultural Use N Timber Use N Total Appraised Value N Homestead Cap Loss A Circuit Breaker Limit Cap Loss A Total Assessed Value N EXEMPTIONS AMOUNT fa.7aBLE' AiJE 1 ?: RAiE PER 100 N/A N/A N/A N/A N/A N/A N/A N/A NIA N/A N/A N/A N/A N/A NIA 112 3!&25. 3:37 PM t Equitable PropenN Valuc 300ft r C . rI. ►:�I https:Lexperiencc.arcais.com experience 98d2cid2292+4fdabe86b6bd9eh3fcae-'pagel'\5arket-Sales;?pin=R039116 V3 P,cc31-dhig InfOrmation: Deed o Trust dated January 10, 1986. recorded in S''olu nic 1305. Past 232, Official Records, WilUamson County, Texas; and assigned by instrument dated October 18, 1991, recorded in Volume 2075, Page 434 Official Records, Williamson County; Texas; and subsequently assigned by instrument elated :August 4, 1993, recorded in Volume 2363, Page 001, Official Records, Williamson County. Texas; and assigned by instrument dated May 12, 1994. recorded in Volume 2561, Page 0776, Official Records, Williamson County, 'Tiaras. Property: BEING 44.660 acres of the Joseph Boxy Surrey, Abstract #63, in Williamson County, 'Texas, excllisive of lilt'. \1 K & T Railroad R 0 W which crosses this tract, described beloNv part of a tract of 145 acres described in a deed from lack Rice to Lott 13. Rogers dated July 1_0, 1951, of record in Volume 372, Page 40, Deed Records, Williamson County, Texas. BEGINN1t-.G at a point in the center ut' the San Gabriel River, at the Southwest corner of saicl 145 acre tract and the Southeast corner of a tract conveyed by J. L iiiliUrii, Ui :CCllia in VU1LLl17e rO, Pagt SlJ, ;ii ir[w West line of the Joseph Berry Survey and approximately 1175 varas from the Southm'est corner of sane. THENCE Nor117 19° West Nvith the West line of the Berry Sun,ey and a fence along tilt: \\'CSl line of the 145 acre tract, at 1079.8 feet cross the South R 0 W line of tilt: N4 K & T Railroad which runs North 771 35' Last, 831.2 feet to a point in the Last line of this tract, is 1180.5 feet the North R O W of the Railroad, in all 2339 feet to an iron stake beside a fence corner post at the NorthWest corner of the 145 acre tract. VOL. 2617PaE 0 4 8 THENCE North 810 50' East 409 feet and North 79010' East, 429 feet with the South R O W fence of the old Georgetown Weir County Road, to set an iron stake for the Northeast corner of this tract. THENCE South 19° East at 1115.8 feet pass an iron stake on the North R O W line of the Railroad at 1216.5 feet pass an iron, stake on the South R O W line of the Railroad at about 2460 feet set an iron stakee on the North bank of the San Gabriel River, in all 2563 feet to a point in the center of the River, for the Southeast corner of this tract. THENCE South 610 10' West 37.5 feet and North 840 West, 870 feet with the center of the River, upstream, to the POINT OF BEGINNING. NOTE: There is excepted the 100 feet wide Railroad R 0 W referred to above, described as follows- BEGDEQNG at a point in the West line of the 44.660 acre tract, North 190 West, 1079.8 feet from the Southwest corner of same, in the South R O W line of the Railroad. THENCE North 19' West, 100.7 feet. THENCE North 77- 35' East, 831.2 feet with North R O W line to the Fast line of the 44.66 acre tract. THENCE South 190 East, 100.7 feet to the South R O W line of the Railroad. THENCE South 77° 35' West, 831.2 feet to the POINT OF BEGINNING, containing 1.908 acres. EXHIBIT ►►c'► THE THEODORE J. KALLUS and MARY E. KALLUS REVOCABLE LIVING TRUST AGREEMENT and NOTARIZED DECLARATION OF TRUST [Please See Attached] Exhibit B Legal Description and Map Resolution No. Release of Petition Area ,,-cjrdh)c, In-L"ori a.ion: Deed of 1 rusi dated January 10, 19M. recordeu :n �'oittmc 1305. Paco 232, Official Records, Williamson County, TeXas; and assigned by instrument dated October 18, 1991, recorded in Volume 2075, Page 434. Official Records, Williamson County, "Texas; and subsequently assigned by instrtimcnt dated August 4, 1993, recorded in Volume 2363, Page 001, Official Records. Williamson County, Texas; and assigned by instrument dated May 12, 1994, recorded in VolLlnle 2561, P;rgc 0776; Official Records, Williamson County, Texas. Property, BEING 44.660 acres of the :foseph Berry Survey, Abstract #63, in Williamson County, Texas, exclusive of the 1\1 K & T Railroad R O W which crosses this tract, described belov., part of a tract of 145 acres described in a deed from faek Rice to 1_ott 13. Rogers dated July 20, 1951, of record in Volurne 372, Page 40, Deed Records, Williamson County, Texas. SEG1NNIPJG at a point in the center of the San Gabriel River, at the Southwest corner of said 145 acre tract and the Sutith, ast corner of a tract conveyed by J, ii.C:iti:;' A.':i`: Ci W rC&U G. 7-UII!Vra, Ui NCUIc.t r[1 VUlUrne =rw0, 1.-iLgt Z15, iii �h;: West line of the Joseph Berry Survey and approximately .1175 varas from the Southwest corner of same. THENCE North 19' NNIest with the West line of the Berry Survey and a fence along the West line of the 145 acre, tract, at 1079.8 feet cross the: South R O W line of the° NI K & T Railroad which runs North 771 35' East, 831.2 feet to a point in the Last line of this tract, it 1180.5 feet the North R O W of the Railroad, in all 13:39 feet to an iron stake beside a fence corner post at the NorthweSl corner of the 145 acre tract. Y�lr.- THENCE North 810 50' East 409 feet and North 790 10, East, 429 feet with the South R 0 W fence of the old Georgetown Weir County Road, to set an iron stake for the Northeast corner of this tract. THENCE South 190 East at 1115.8 feet pass an iron stake on the North R 0 W line of the Railroad at 1216.5 fleet pass an iron stake on the South R C W line of the Railroad at about 2460 feet set an iron stake on the North bank of the San (M).riol River, in all 2563 feet to a point in the canner of the River, for the Southeast comer of this tract. THENCE South 61' 10' West 37.5 feet and North 840 West, 870 feet with the center of the River, upstrearn, to the POINT' OF 23HGrvRiMG,. NOTE: There is excepted the 100 feet wide Railroad R 0 W Yeforred to above, described as follows: BEGMNING at a point in. the West line of the 44.660 acre tract, North 19' West, 1079.8 feet from the Southwest comer of same, in the South R 0 W line of the Railroad. THENCE North 191 West, 100.7 feet, THENCE North 770 35' East, 831.2 feet with North R 0 W lute to the East lime of the 44.66 acre tract. THENCE South 190 East, 100.7 feet to the South R 0 W line of the Railroad. THENCE South 770 35' West, 831.2 feet to the POINT OF I;EGi INIlVG, containing 1.908 acres. 3A'25, 10:38AM VPlliarnson Central Appraisal District Map IF "i 1 FM C171 rPnrna+nwrl Parcels: R332247 � 7 Parcel R332247 Identification _ Number Owner KALLUS THEODORE J- & MARY E TRS OF — REVOCABLE LIVING ._. TRUST �„ _ -•• get,, 1 Site Address 3418 FM 971, GEORGETOWN, TX 78626 Pecan ' = P, Deed Acres 42.752 Abstract AW0063 - Berry, r �' WIN Joseph Sur, Entities CAD,GWI,RFM,SGT,F08 Book .. 1 Page t Instrument 2006015050 _ 1 1 Number Map Name 2-0 36 VSearch rel ZOomt % 11 �� lfil7i; hope: publlcdata.wcad.org�parcetnlap) Proph.fl� ""doo 600fl I{quitab!c Prop,2riy VAitc 600,1 9 3,6.12S, 3:37 Pal Equitable Property Value 300ft https:; experience areeis.com experience 98d2cId229244fdabe86b6bd9eLilfeae'pagelMarket- Sal es. ?pi n=R039116 23 _,A- Petitioned for ETJ Removal G EORGETOW N �orc,��•r��re KALLUS THEODORE J & MARY E TRS OF REVOCABLE LIVING TRUST \\ 1 \ `\ I I I I I L� �yg`4 I I 1 f 1 y 1 1 1 1 1 1 1 1 1 1 1 i \ 1 1 fM971 ersoch Park ��,` ``�•�, 9711 f I l_ 753 ft 742 fi CR 2 G Shy Property Georgetown ETJ City limits 1971 F4, 9) 7 O 19 D Soo 1,000 ao US Feet GR EXHIBIT licit NOTARIZED DECLARATIOti OF TRUST THE THEODORE J. "LLUS AND JIARI' E. KALLUS RE VOCABLE LIVING TRUST AGREEMENT The undersi ° e� hereby certifies that they created a Revocable I_i ir,` Tntst. This Trust is knov.'n as. THE THEODORE J.1-AL LS AND 1.iARY E. K--�LLL-S REVOCABLE LINING TRUST, dated the day of by and bets;" eeii THEODORE J. -\LLLS and MARY E. kALLUS, Trustors and Trustees, residing at 1350 FBI ?1, tl�e Cit, of GEORGETOWN, the State of TEXAS, the County of NVILLIA-%1SON. IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS: The parties hereto desire to confirm the establishment of a Revocable Trust on this date, for the benefit of the Trustors (as husband and wife) and containing herein the following Provisions: 1. The Trustors are designated as the Trustees to serve until both of their deaths, resignations or incompetence. 2. l Tpon the end of the terms of the original Trustees, PATRICIA NI. SHIROCKY, PAM& W. KALLUS and TED JOHN KALLUS are designated as Joint Co -Successor Trustees. 3. Upon the death of either Trustor, the surviving spouse retains the unlimited right to the Trust. She or he also retains a general power of appointment which can be exercised by will or by lifetime transfer over the Trust property. 4. Any Trustee/Trustor has the power and authority to manage and control, buy, sell, and transfer the trust property, in such manner as the Trustee may deem advisable, and shall have, enjoy and exercise all powers and rights over and concerning said property and the proceeds thereof as fully and amply as though said Trustee were the absolute and qualified owner of same, including the power to grant, bargain, sell and convey, encumber and hypothecate, real and personal property, and the power to invest in corporate obligations of every kind, stocks, preferred or common, and to buy stocks, bonds and similar investments on margin or other leveraged accounts, except to the extent that such management would cause includability of an irrevocable trust in the Estate of a Trustee. 5. Following the death of both husband and wife, the Trust continues or is distributed in whole or in part for the benefit of other named Beneficiaries according to the terms of the Trust. G. While both Trustors are 1 iving and competent, except when there shall be a Corporate Trustee, either Trustee may add money to or withdraw money from any bank or savings and loan or checking account owned by the Trust without the approval of the other Trustee or other Trustor, provided, however, that the ownership of hinds received and deposited, whether community property or non -community property shall remain the same and the Trustor removing or adding funds shall gain no additional ownership interest therein than was present prior to the withdrawal from or addition to the Trust Account. Notarized Declaration of Trust --Page 1 7. All property transferred into the Trust which had an original source as community property shall remain community property unless other provisions shall have been made therefor. 8. All personal property transferred into the Trust remains personal property and all real property transferred into the Trust remains real property. 9. Unless otherwise indicated to a prospective transferee, the Trustee has full power to transfer assets held in the name of the Trust and subsequent transferees are entitled to rely upon such transfers provided the chain of title is not otherwise deficient. 10. The Trust Agreement also states that any bank, corporation, brokerage firm or other entity or any individual may conclusively presume that the Trustee has full power and authority and such person or institution shall be held harmless and shall incur no liability by reason of so presuming. 11, The situs of the Trust is the State of Texas. 12. The use of this Summary of Trust is for convenience only and the Trust is solely controlled as to- the provisions and interpretations, and any conflict between this abstract and the Trust shall be decided in favor of the Trust. IN WITNESS WHEREOF, the parties have hereto executed this Surrrmary of Trust this date. TRUSTORS\TRUSTEES: / % i ITW _ . MARY KALLUS STATE OF TEXAS § COUNTY OF WILLIAMSON § On this the �� day of , before me, a Notary Public, personally appeared THEODO kE J. KALLUS and MARY E. KALLUS, personally known to me to be the persons whose name are subscribed to this instrument, and acknowledged that they executed it for the purposes herein expressed. Notary runuc, Mate or i exa-s MARLIN BRANTLEY Notary Public, State of Texas My Commission Expires December 23, 2007 Notarized Declaration of Trust --Page 2 """" THE THEODORE J. KALLUS AND MARY E. KALLUS REVOCABLE LIVING TRUST AGREEMENT Declaration of Intent The undersigned hereby declare that as Trustees of THE THEODORE J. KALLUS AND MARY E. KALLUS REVOCABLE LIVING TRUST, they are acquiring and will hold in the name of THEODORE J. KALLUS and MARY E. KALLUS, but without further reference to their fiduciary capacity, all items listed on the attached schedule(s) hereto and incorporated herein as amended, from time to time, as well as household furnishings, automobiles, jewelry, bank accounts, securities, bonds, clothing and other personal property of any kind in their name or in either of their names and henceforth such assets shall and will belong to said Trust and not to them individually; and they further hereby declare that, except to the extent of interest provided to them under the terms and provisions of said Trust, they have no personal interest in any of the above itemized personal properties, it being intended that this Declaration constitutes an affirmation of Trust ownership and an assignment to this Trust and shall be binding on their heirs, administrators, executors and assigns. IN WITNE HER ., F, the undersigned h, executed this instrument this day ofG�• THEO RE J. KAL S, Trustor/Trustee C� MARY E. I LLUS, Trustor/Trustee STATE OF TEXAS § COUNTY OF'WILLIAMSON § :BEFORE ME, the undersigned authority, on this day personally appeared THEODORE J. KALLUS and MARY E. KALLUS, known to me to be the persons whose names are subscribed to the foregoing instrument, and acknowledged to me that they executed the same for the purposes and consideration therein expressed and in the capacity therein stated. S SCRIBED AND SWORN this day of kNotary �;MARLIN BRANTLEY F'ubk, State of 'texas My COITIMiS5I Expiros Otary Public, Sta Of T '�Y;+•,�;.:;;` December 23, 2007 EXHIBIT "C" lDf1�1�E,�.,P ...�..�y .�^%1�1c�1J�/_• �.y1N� BELTNV'EI,N: A'1IE;CDDORE J. KALLUS s#i\) N7.A.1 Y lip:. KAC,,l US, AS 'rtF1;lJSTCl;RS AN D. '1<'HEO DORE ,1. KAl LUS AND IMARY F. KAL,Luis, ASTRUSTEES TI-11.10 :)C RE1, J'. IAA l .,LUS r:rud IM A RY l , f l LLUS, residen-l's of the Stalc ol" 111'�N AS, C OL111ty cal- %VI ..LIA M SON, hmvby cstalal is118 1"rtrSt UPCMI the. conditions and for the. purpose"; hereafter set forth. AR' ICA,E ONE 1."Mablishmelrt tarrci Funding; of the 'Trust 11'4ctiol'i LQ 1_,.._.Mime f_ Frfist; This, is a reNr(,xablu Iiving; trust and shall be KAI, LU'S AND MARY F. 1</lI. LUS REVO(..'A 3LE I...IV1NG "TRUST," All veforcmrces to "my trust" or "our trust" or "trust" or "family trust", unless othcrvise stated, shall refer to this rc ",oc"able living trust MId the' trust, created in it. Section ,1,02, T1118,l F st-,rtC i)Cf`i11Cd This 'l`rusl i,z9 Cor red to hold title to real and personal property Cor the benefit c) P the t rustors o hiS TrLu-,:t and to proViCIC t01- the 01-d(.'V1Y UW t1nd tra sfer of"these 7: sets upon the death of the '..1''rustors. 'Fhe "'Frusl Estate" is (1 t1ned as kill plvperty, trkiliste;rred or collvvycd to and received by the; Trustee;, held pursuant to the t0l'111S of'this instrtlrnelrt. 'I'llC Trustee is required to hold, administer, mid distribute this pr-operty as provided in this'1"rust Agree:rnent. 1ai� 'fill (Dto)t:)l 1p J_ 14 .1.1:s alid MARYY_F. KALLUS l evocubleL.ivin� l:riis�,-•ry,i��c 1 c►ectian 1.t1.O1 Initial Funding -of this Trust Trustors hereby initially fund this 'rt-U.it with "Tell and No/100 Dollars ($10,00) together with the property described in Scbcdulc.- A, which is attached hereto and incorporated fully herein for all purposes the same as if fully set forth. All such property is conveyed, transferrG;d and delivered to the 'Trustee, in trust, without consideration. The property described illhcdul(is not merely being desc ibed far illustration or to reflect ri,n intent to tt•atlsfer, but is hereby transferred. For this purpose, this Agreement) including the attached , .�iedul A, constitutes a deed of gift and a declaration of trust, effective immediately. section I Ijj,! dditions tO TI-Li t is ,rop sties a) Each `T'rustor m..ay transfer other property to the Trust. This may be accomplished in any way that manifests the'frustor's intent to malee the transfer, including but not limited to: 1) having the property titled or retitled ill the name Of the Trust; 2) delivering the property to the "Trustee, :3) changing the name of an account (including a bank or brokerage account) to the; flame of the Trust; 4) opening an account in the name of the Trust and transferring property into it. b) The 'Trustee, ,it any time during the continuance of this Trust in his or her sole discretion after consideration of the possible tax consequences to all concerned, is authorized to receive into the 'Trust additions of cash and other properties from any other source whatsoever, whether by gift, will, or otherwise. However, the Trustee shall accept all assets Which Trustors may give, devise, or bequeath to this Trust, c) In addition, any person or persons may designate this "Trust as the Beneficiary, Prit-nary or Contingent, of death benefits, whether insurance benefits, pension benefits, or other benefits, 'Until such benefits mature, unless otherwise started the Trusl:ce shall have no resporlsibiIity with respect to those benefits. Section 1.05. Distribution in Kind or Cash 011 any division of the assets of the 'Trust Estate into share's or partial shares, and on any filial or Martial distribution of the assets of the "Trust Estate, the Trustee, at his or her absolute discretion, may divide: and distribute undivided interests of such assets, or may sell 11 or any part o,f such assets and may make divisions or distributions ill cash or partly in cash and parity in kind. The decision of the Trustee, either prior to or on any division or distribution of such assets, as to what constitutes a proper division of such assets of the "Trust Estate shall be binding on all persons interested in any trust provided for in this "Trust Agreement. The THEOD0111:; J. KALLUS knd MA —[ —YE,, KALLUS Rmcable l..ivin& Trtrsl--Page 2 Section U1():_,•�) aortionnleni "fhe Tr-istec of the Trust is directed to apportion receipts and expenditures of tile types described below between principal and income as follows: a) Whenever the principal, or any part thereof, of the Trust Property is invested in securities purchased at a pret-nium or at a discount, any premium will be charged against principal and any discount will be credited to principal; b) Any stock dividends and rights to purchase additional stock issued on. Securities held in trust will be treated as principal, but all other dividends, except liquidating distributions, will be treated as income; and c) The amount of any applicable depletion allowance for federal income tax purposes will be treated as income. 5ecti n_l LQ7. Separate 111y r!y. to Rer1miji So a}�, rate All property that a Tr'ustor° transfers to the Trustee pur'stlant to this illStrrrrnnent Which was community property or separate property at the time; of the transfer shall rern ain, respectively con•lmunity property or the separate property of the TI•trstor transferring such property to the "Frust. ("''ornmunity property transferred to the Trustee by the 'Cr ustors shall be their community property, and treated as such. This property, as invested and reinvested, together with the rents, issues and profits therefrom (hereinafter referred to as the "Community Estate" or'the "Community Property") shall retain its character as community property during the joint lifetinles of tine Trustors in spite of any change in tine sites of the Trust, subject, however, to the provisions of this Agreement. 5'ggljgjj 1,.08.l)iscretionarx Termination Except as otherwise provided herein, the Trustee may terminate any trust when, in the opinion of the ".Trustee, the principal is reduced to such an extent that it is neat in the best interest of the Beneficiary or Beneficiaries to contrntle the trust. "The judgment ofthe Trustee with respect to this decision to terminate will be final and not subJect to judicial review. If' the Trustee terminates a trust according to this Section, the date the trust terminates will be deci-ned the date fixed for tern-iination of the trust., and the Trustee NeilI distribute the asscts of the terminating trust to the Beneficiary or Beneficiaries pursuant to this Agreement. '1'hc T1 LODORE J. KALLUS and MARY R KALLUS RcvQcuble Liviija Trust --Page 3 Section 1.09 Aniendnicnt and Revocation At any time during the joint lives of the Trustors, jointly as to community property and individually as -to separate property, the, Trustors may, by a duly executed instrument filed With the Trustee: a) Amend this 'Trust Agreement in any manner, and/or b) Revoke this Trust Agreement in part or in whole. if the "Trust Agrecmel-it is revoked in whole, the 'Frust:ee shall transfer title to all Trust :Property of every Find and dcscrlptio.n back into tile individual names of the TrUStOCS. •rhe instrument of amendment or revocation shall be effective immediately Capon its proper execution by the Trustors, but until a copy has been received by a Trustee, that "Trustee- shall not incur any liability or responsibility either (i) for failing to act in accordance with such instrument or (ii) for acting in accordance with the provisions of this Trust.Agreement without regard to such instrument. c) Withdraw .from the; Trust ]:,state all or any part ofthe principaal and accumulated incopie of the'Frust to satisfy liabilitics lawfully' incurred in the administration of this Trust. Secti 1.10. Revocation or Alteration by T LIS Or AIQ11C The; rights of revocation, withdrawal, alteration and amendment reserved in this Article must be exercised by the 'rrustor, and may not be exercised by any other person, including an agent, a guardian or a conservator. `�c�'i 1. L. IrrcvocabiliLy Except as otherwise provided, oil the death of either Trustor, t1.le designation of Beneficiaries of specific gifts in this Trust shall become irrevocable:, and not subject to anlendmen't or modification. Sectign 1.12. Spendthrift Provision Neither the l;yrincipal nor the income of the 'trust shall be liable for t:hc debts of a Beneficiary. F xcept as otherwise expressly provided in this Agreement, no Beneficiary of any trust created herein shall have any right, power or authority to alienate, encumber or hypothecate his Or her interest in the principal or income of such trust in any planner, nor shell the interests of any Beneficiary be subject to the clairkis of his or her creditors or liable to attachment, executim, or other process of law. The lirnit:ations herein sliall not restrict the exercise of any power of appointment or the right to disclaim. The THEODORE J. KAL LQS and MARY l KA t US Rcvocablc Livilig Trust --Page 4 5(^& otl 1 13. Catastrophic Illness If both 'Trustors are living and a catastrophic illness affects one of the Tr•UStorS, then the Trust Estate shall be divided into the separate property of the respective 'Tru.stors. Such division shall be made so as to preserve the Estate of the Trustor not so affected by the catastrophic, illness..A catastrophic illness is one which is reasonably anticipated to extend for a period of sip, months or longer, and which renders the affected Trustor incompetent or in need of" full tinge care. If competent, Trustor may make the determination to divide the Trust Estate in accordance with these provisions. If the Trustor affected by the catastrophic illness is not competent to manage his or her affairs, then the division shall be made by the person designated as the affected Trustor's Attorney -in -Fact in his or her Durable Power of Attorney, or by a court appointed conservator of the affected Trustor. The division of the property of the 'Trust Estate shall apportion to each'I-r•ustor• his or her separate property and one-half of the community property. Fron-r and after the division, the share of the Trust Estate set aside for each Trustor shall be his or her sole and separate property for all purposes, and, if that property remains part: of the Trust (,"state, Subject to the terms and conditions set forth within this Trust Agreement, ARTICLE TWO The Trustee cction _Z.()l.��Frustee Designation 1-Iusband and Wife are hereby designated as Co-J,r•ustees. The Co -Trustees shall serve ,jointly and severally and either shall have full authority to act for the Trust independently. Should either husband or wi fe become unable; because of death, incapacity, or other cause, to serve as a Co -"Trustee, or should either resign as Co -Trustee before; the natural termination Of this 'Trust, the remaining; (.'o-`Trustee, husband or wife, shall thereafter serve as sole Trustee. The term "Trustee" as used in this Trust Agreement shall refer collectively to husband and wife so long as they serve as Co -Trustees, to the spouse who serves as the sole Trustee, andlor to any successor Trustee who assumes the role of•Trustee. 'These Trustees shall serve in the order as provided in Section 2.03 of this 'Trust Agreement. Notwitlistanding anything in this 'Trust Agreement to the contrary, when Husband and Wife cLie scrvirrg as "Trustees, either one or both, either may act for and conduct business on behalf of the Family Trust without the, consent: of any other Trustee, > -etion 2.02., t;gititiannshiv bctsvgq;n_Tr"x tcq i►! 'I'nuAara The surviving Trustor shall be the Trustee unless and until lie or she resigns in writing, or is determined incompetent under the terms provided herein. The surviving Trustor shall The Tt- EODORE J KALLUS and MARY E. KAl t US Rcvocablc ..ivi _l,i__ust--Page 5 retain all absolute rights to discharge or replace any successor Trustee ofany portion or share of the Trust which is revocable by the surviving'I'rustor, so long as the'l-'rustor is competent. Section 2.03, Trustees All 'Trustees are to serve without bond. The following; will act its 'Trustees of any trusts created by this Trust Agreement, including the "A" ']'rust and the "B" Trust in the following Order of succession: First: The undersigned, 7.'HEODORIr .1. KALLUS and MARY .E. KALLUS. Second: The surviving spouse. Third: At the death or incapacity of the surviving spouse, PATRICIA M. SHIROCKY, PA'TRICK W, KALLUS and TED JOHN KALLUS shall serve as Joint Co -Successor Trustees. If none of the above -named Successor Trustees qualify to serve as Successol'Trustees or if they resign from such service, then the Trustee shall be chosen by the majority of Benefici tries, with a parent or legal guardian voting for minor Beneficiaries; provided, however, that the children ofany deceased Beneficiary shall collectively have only one vote, Section,2�,0!_. Allot Lion and Distribution of the Trust Assets The Trustees shall allocate, hold, administer and distribute the 'Trust Assets as hereinafter provided: a) Upon the death of the first Trustor, the Trustee shall make ally separate distributions that have been specified by the deceased Trustor. The 'Trustee shall also take into consideration the appropriate provisions of this Article. b) Upon the death of the surviving spouse, the Trustee shall hold, administer and distribute the Trust Assets in the manner hereinafter prescribed. Section 2.0) Personal Propert Distribution Notwithstanding any provision of this ':Crust Agreement to the contrary, the Trustee must abide by any memorandum by they Trustors -- particularly that contained in the section entitled "Special Directives" incorporated into this '!'rust Agreement -- directing the disposition of Trust Assets of every kind including; but not limited to furniture, appliances, furnisllings, pictures, china, silverware, glass, books, jewelry, wearing apparel, and all 'Hie TUEODOR t'�, J. KALLUS and MARY I;. KALLUS Revocably Living, Trust-Alage 6 policies of fire;, burglary, property damal;e, and other insurance on or in connection with the use of this property. Otherwise, any Personal and household effects of thc'Trustors shall be distributed with the remaining assets of the 'Frost Estate. Sec io. t. .. l.iabili,Iy_sfTrustee The "1'III Stec will not be responsible or liable for any loss which may occur by reason of depreciation in value of the properties at any tirne belonging; to the `Trust Estate, nor for ally other loss which may occur, except that the Trustee will be liable for such►'I'rustee's own negligence, neglect, default, or willful wrong. T'he Trustee will not be fable or responsible for the acts, omissions, or defaults of any agent or other person to whom duties may be properly delegated hereunder (except officers or regular ernployces of the Trustee) if such agent or person was appointed with due care. Tyre "I'rustee may receive; reimbursement frorn the Trust estate for any liability, whether in contract or in tort, incurred in the administration of the Trust Estate in accordance with the provisions hereof, and the 'Trustee may contract in such form that such Trustee will be exempt from such personal liability and that such liability will be limited to the Trust Assets. Section 2,.07.. S icceMor �Aistees Any Successor Trustee shall have all the power, rights, discretion and obligations conferred on a 'l'rustee by this 'I"mist Agreement. All rights, titles and interest in the property of the Trust shall immediately vest in the successor]" rustee at the time of appointment. The prior "1"rustee shall, without warranty, transfer to the successor ,frtastec the existing 'Trust Property. No suceessor'Trustee shall be under any duty to examine, verify, question, or audit the: books, records, accounts, or transaction of any preceding Trustee; and iao successor TI'Ustce shall be liable or responsible in any way for any acts, defaults or omissions of any predecessor "1"ruastce, nor for any loss or expense from or occasioned by anything clone or neglected to be done by any predecessor Trustee. A Successor Trustee shall be liable only for his or her own acts and defaults. ectio._2 Q.gaYjudgement and Qiscrcti n 9f Tru: tge In the absence of proof of bad faith, all questions ofconstruction or interpretation of r.iny trusts created by this Trust Agreement will be finally and conclusively determined solely by the Trustee, according to the Trustee's best judgement and without recourse to any court, and each determination by the Trustee is binding, on the beneficiaries and prospective benefieiaries hereunder, both in being and unborn, as well as all other persons, firms or corporations. " nic Trustee, when exercising any discretionary power relating to the distribution or accumulation of principal or income or to the termination of any trust, will be responsible only for lack of good faith in the exercise of such power, Each determination 'nic'n FODORL LKALLUS and MARY E. KAI C US Revocable Living 7 oily be relied upon to the same extent as if it were a final and binding judicial determination. In the event of a conflict between the provisions of this Trust Agreement and those of the 'I CUS Try►st Cycle, they provisions of this 'Trust Agreement will control. Section 2.09. Non -In, Ionic Produgng_Property During the joint lives of the Trustors, the Trustee is authorized to retain ill the 'Trust for so long its the; Trustee may deem advisable, any property received by the'Trustee from the TrustorS, whether or not such property is of the character permitted by law for they investment of Trust hinds. Section 2 10. TrUstee.,Powers The Trustee shell have both the administrative and investment powers enumerated herein and all other powers conferred upon a Trustee by law for the orderly administration of the Trust Estate, The Trustee is further authorized to sign, deliver and/or receive any docurnents necessary to carry out the powers contained within this Section. The'ITrustee of any trust created raider this "Trust Agreement (including any substitute or successor trustee,) will have and be sulliect to all of the powers, duties, and responsibilities granted or imposed by the 'Texas 'Trust Code as such Code play provide at the time; of adillinistnitioil of the; trust, except to the extent that the same: are inconsistent with the provisions of this Tnist Agreement. Section 2. l 11 E� ij is Powers o;�`rustee In addition, the Trustee will have the following specific powers; a) Trust .:state .. 'The Trustee may leave invested, any property cooling into its hands hereunder in any form of investment, even though the investment may not be of tile: character of investments permitted bylaw to trustees, without liability for loss or, depreciation in value. 'I'lie Trustee may sell, exchange, or otherwise disperse of or reinvest property which may at any timb be a part of the Trust Estate upon such terms and conditions as the Trustee may deem advisable. The Trustee may invest and reinvest the Trust .assets from time to time in any property, real, personal, or mixed, including without limitation securities of domestic trod foreign corporations and investment trusts or companies, bonds, debentures, preferred stocks, common stocks, mortgages, mortgage participations, and interests In common trust funds, all With complete discretion to convert realty into personalty or personalty into realty or otherwise change the character of the Trust Estate, even though such investincllt (by reason of Its character, amount, proportion to the total Trust Estate, or otherwise) would not be considered appropriate for a fiduciary apart from this provision, and evenn though such 'Llie'111FODOR1 J. KALLUS and_MARY E. KAI LUS Revocable 1. iving,'Unrust—Page 8 investment: caused part or all of tilt, total 'Trust Estate to be invested in investments of one type or of o1ae I)LISillesS or company. b) Investrncrat Powers in General - The 'Trustee may invest and reinvest in such classes of stocks, bonds, securities or other property, real or personal, as it shall determine. The Trustee may invest in investment trusts as well as in common trust funds. The 'Trustee may purchase life, annuity, accident, sickness, and medical insurance on the behalf of and for the benefit of any trust Beneficiary, c) Nominee Power - The Trustee nwy hold property in the 'trustee's name, as TrusteC, or in the name of a nominee withoUt disclosing the Trust, (1) release of Power - If the Trustee deems it to be in the best interest of the "Trust and its bevel iciaries, the Trustee, by written instrument signed by such 'Trustee, will have the power and authority to release, disclaim or restrict the scope of <in), power or discretion granted in this "Trust Agreement or implied by law. c) Agents, Employees - The Trustee may employ one or more agents to perform any act of administration, whether or not discretionary, including attorneys, auditors, investment managers or others, as the 'trustee shall deem necessary or advisable. The 'frustee may cornperysate agents and other employees, and may delegate to the i.-n any and Al discretions and powers. f) Oil, Gas, Coal and Other Mineral Interests -The 'truste:e may do all things necessary to rilainta.in in full force and effect any oil, gas„ coal, or other mineral interests C°,on,iprising part or all of the Trust Property. The `Trustee may purchase additional oil, gas, coal, and other mineral interests when necessary or desirable to effect a reasonable plan of operation or development with regard to the TPUst Property. 'The 'Trustee may buy or sell undivided interest in oil, gas, coal, and other mineral interests, and inay exchange any of such interests for interests in other properties or for services. The Trustee may execute oil, gas, coal, and other mineral leases on such terms as the trustee may deern proper, and may enter into pooling,, unitization, repressurization, and other types of agreements relating to the development, operation, and conservation of mineral properties. Any lease or other agreement may have a duration that the 'Trustee deems reasonable-, even though extending beyond the duration of any trust created in this Agreement. the 'Frustee may execute division orders, transfer orders, releases, assignments, farmouts, and any other instruments Which it deems proper. 'The 'trustee may drill, test, explore, mine, develop, and otherwise exploit any and all oil, gays, coal, and other mineral interests, and may select, cnzploy., utilirc, orparticipate in anybusiness form, includingpartner.-ships,,iointventui-es, co -owners, groups, syndicates, and corporations, for the purpose of acquiring, holding, exploiting, developing, operating, or disposing of oil, t;as, coal, and other mineral interests. 'l' is 7l"rustee may employ The T111?0D0REL1_ I 1 lJS and MA1ZY 1-. KA1,l.l1S RcYocabig 1, in1,: `Trust- •P0ge 9 the Sol -vices Of consultants or outside specialists in connection with the evaluation, ni anagerllent, acquisition, disposition, or development of any mineral interest, and may pay the cost of such services from the prime,°ipal or income of the 'Trust Property. The Trustee may use the general assets of the trusts created under this Agreenleilt for the purposes of acquiring, holding, managing, developing, pooling, unitizing, repressuring, or disposing of any mineral interest. g) Common Funds . The Trustee may hold any Of tile Trarst Assets ill a con'in1orl fund with property from other trust estates and to make investments jointly with any other trust, the property of which is included ill the conln'lon fund. 11) Securities - With respect to securities held in the Trust Estate, th.e 'Crustee may exercise all the rights, powers, and privileges of an owner, including, but not limited to, the power to vote, give proxies, and to pay assessments and other sums deemed by the Trustee necessary for the protection of the Trust: Estate, to participate in voting trusts, Foreclosures, reorganizations, consolidations, mergers, and liquidations, and in connection therewith to cleposit securities with and transfer title; to any protective or other committee under such terms as the Trustee may deem advisable, to exercise or sell stock subscription or conversion rights; and to accept and retain as an investment any securities or other property received through the exercise of any of the foregoing powers, regardless of any limitations elsewhere in this instrument relative to investments by they Trustee. 1) Mai -gin and Brokerage Account Powers - The Trustee is s weif ically vested with the power'and authority to open, operate, and maintain a securities brokerage account wherein any security may be bought or sold on margin. The rrrustee is authorized to hypothecate or borroNv upon purchase or sale against existing seca►ritics in suc:ll account. J) Mortgage Powers . The. 'Trustee shall have the power to enter into any mortgage whether as a mortgagee or mortgagor; to purchase mortgages on the open market ,:and to otherwise buy, sell, or trade in first or subordinate mortgages. TllC'l'rustCC may reduce the interest rate oil any mortgage and consent to the modification or release of any guaranty of any mortgage. The Trustee may continue mortgages upon and after maturity with or without renewal or extension, and may foreclose any mortgage. The Trustee play purchase the mortgaged property or acquire it by deed from the mortgagor without foreclosure, k) I.'owers of Attorney - The Trustee rimy execute, deliver, and grant to any individual or corporation a revocable or irrevocable power of attorney to transact any and all business on behalf of the various trusts created in this Agreement. The power of attorney may grant to the attorney--in.-fact all of the rights, powers, and discretion that the 'Trustee could have: exercised. 1) Interested Trustee - Notwithstanding the general powers conferred upo11 the Trustee, or anything to the contrary contained in this Agreement, no individual Trustee shall TheTHE O-DQRr. J, K.ALL.US an MARY t:. KALLUS RQvocablc l,ivin,g TrList Page 10 exercise or participate in the exercise of discretion With respect to the distribution of Trust income or principal to or for the benefit of such 'Trustee. J.'he above sentence shall apply unless any such distribution is 1 irnited by an ascertainable standard rclating to tile; education, health, maintenance, and support of such individual Trustee, No individual 'Trustee shall exercise or participate in the exercise of such discretionary power with respect to distributions to any person or persons such individual is legally obligated to support, as to thlt support obligation. tri} Insured 'l'rustee .. Any individual 1''111stcc under this Trust Agreeillent, other than 1'rustors, is prohibited from exercising ally, power conferred on the owner of any policy Which insures the life o1'such individual'1'rustee and which is held as park of the ":I'rust F"state. If the 'Trustee holds any such policy or policies as a part of the 'f rust Estate, the powers conferred oil the owner of such, a policy shall be exercised only by the other then acting Trustee, If the insured Trustee is the only theri acting Trustee, then such powers shall be exercised by a successor trustee designated pursuant to the provisions of this "Trust Agreement dealing with the trusteeship. If any rule of law or court decision construes the ability of the insured Trustee to narne a substitute Trustee as an incident of ownership, the substitution process shall be implemented by a majority of the then current mandatory and discretionary income beneficiaries, excluding the insured 'Trustee if the insured 'Trustee is a Beneficiary. n) heal Estate - 'I"he "Trustee may make leases and grant options to lease for any term, even though the terin may extend beyond the; termination Of ally trust created under this Agreement. The 1'ru.stee may grant or release easements and other interests with respect to real estate;; enter into panty wall agreements, execute estoppel certificates, and develop and subdivide any real estate. 'Tile 'I'iustee may dedicate parks, streets, and alleys or vacate any street or alley; construct, repair, alter, remodel, demolish, or abandon improvements. ✓file 'Trustee inay elect to insure, as it deems advisable, all actions contemplated by this subsection. 'Tile "Trustee may take any other action reasonably necessary for the preservation of real estatee and fixtures comprising a part of the 'Trust .Estate or the income therefrom. o) S-Corporation Stock - If at anytime a trust created under this Agreerrlent holds stock in an S corporation and such trust is not a qualified Subchapter S trust, the'l'rustce nlay, in its sole and absolute discretion, distribute such stock to the beneficiaries as if the trust had terminated, while continuing to hold any other property in such trust. In addition, the'I'rustee niay divide a trust created under this Agreement into separate trusts for each of' the beneficiaries, with each newly created trust holding that Beneficiary's pro rata share of the S corporation stock. Mach newly created trust shall have mandatory distributions of incorne, In all other respects the newly created trusts shall be as consistent as possible with the original trusts and still qualify as qualified Subchapter S trusts. The "Trustee may take any action necessary with regard to S corporations, including rnaking any elections required to 'ncc'1'IIt:UDORC: J. KALLUS and MARY E. KALLUS Revocable; Livirlu'rrusi -Page 11 clualit'y stock as S corporation stock and may signing all necessary tax returns and forms. p) Sale, ]:.ease and Other Dispositive Matters.- The Trustee may sell, lease, transfer, exchange, grant options with respect to, or otherwise dispose of the Trust Property, '.['Ile Trustee may deal with the Trust Property at such time or times, for such purposes, for such considerations and upon such terms, credits, and conditions, and for such periods of time, whether ending, before or after the terra of any trust created under this Agreement, as it deems advisable. The Trustee may make such.. contracts, deeds, leases, and any other instrunIents it deers proper under the immediate circumstances, and may deal Nvith the "T'rust Property in all other ways in which a natural person could deal with his or her property. q) Purchases fiorn Estate - The "Trustee may purchase property of any kind from the executor or administrator of our estates. r) Lending; - The Trustee may loan money to any person, including; a Beneficiary, with or without interest, on any terra or on demand, with or without collateral, as it deems in the best interests of the Trust beneficiaries. The 'Tr-ustee; may borrow money upon such terms and conditions as it shall deem advisable, including:;, in the case of a corporate fiduciary, the power to borrow from its own bankitig, or commercial department, The `T"rust:eC shall have the power to obligate the Trust Property for the repayment of any sums borrowed where the best interests of the beneficiaries have; been taken into consideration, The Trustee shall have the power to encumber the 'Trust Property, in whole or in part, by a mortgage or mortgages, deeds of trust, or by pledge, hypothecation or otherwise, even though such cricumbrance may continue to be effective after the term of any trust or trusts created in this Agreement, s) Distributi oils to or for Beneficiaries - The Trustee may make any distribution contemplated by this Trust Agreement (1) to the Beneficiary, (2) if the Beneficiary is under a legal disability or if the Trustee determines that the Beneficiary is unable to properly manage his or 1•rer affairs, to a person furnishing s'lrpp011, maintenance or education for the Beneficiary or with whom the .Beneficiary is residing;, for expenditures on the Beneficiary's behalf, or (3) if the, Beneficiary is a minor, to a trustee of an existing; trust established exclusively for the benefit of such ririrlor, whether created by this 'Trust Agreement or otherwise, or to a custodian for the Beneficiary, as selected by the 'Trustee, under the Texas Unlforn'l Gifts to Minors Act ("TUGMik"). Alternatively, the Tri.istee may apply <tll or a part of the distribution for the Beneficiary',,.,, benefit. Any distribution under this paragraph will be a full discharge of the'Trustee with respect thereto. On any partial or final distribution of the Trust A ssets, the '•must+(- may apportion and allocate they assets ofthe'T'rust L' statc in Cash or in kind, orpartly in eash and partly in kind, or in undivided interests in the tiianncr deeniud advisable at the discretion of the Trustee and to sell any property deemed necessary by the 'T'rustcc to n•take the distribution. The Trustee may distribute gifts of up to $10,000.00 per 't'l c T1IEODORF J. KAI LUS and MARY E. KALL US Revd eic .bW 1. iviir ]'rust --Page 12 year. per donee out of principal or interest, Ifany property is distributed outright Under the provision of this Trust Agreement to a person who is a minor, distribution may be rnade under TU(31vfA. t) insurance w'Che Trustee shall have the powers with regarei to life insurance as set forth in this Paragraph excerpt as otherwise, provided in this Agreement. The '.IRrustee may purchase, accept, hold, and deal with as owner, policies of .insurance on '.l'rustors' life, the life of any trust beneficiary, or oil the life of any person in whorn any trust beneficiary has an insurable; interest. The 11relStee shall have the power to execute or cancel any automatic premium loan agreement with respect to any policy, and shall have the power to elect or cancel any automatic premium loan provision in a life insurance policy. The rf'rustee may borrow money -with which to pay premiums due oil any policy either from the company issuing the policy or from any other source and may assign any such policy as security for the loan. The 'l7rustee shall have the power to exercise any option contained In a, policy with regard to any dividend or share of surplus apportioned to the policy; to reduce the amount of a policy or convert or exchange the policy; or to surrender a policy at any time for its cash value. The Trustee may elect any paid -up insurance or any extended terns insurance nonforfeit:ure option contained in a policy. The Trustee shall have the power to sell policies at their fair market value: to the insure(l or to anyone having an insurable interest in the policies. The rl'rustee shall have the right to exercise any other right, option, or benefit contained in a policy or permitted by the insurance company issuing that policy, Upon termination of any trust created under this Agreement, the "Trustee shall have the power to transfer and assign the policies held by the trust as a distribution of"1Trust Property, u) Borrowing - The'Trustee may borrow money from the 'Trustee and others, and to secure the; repayment thereof by mortgaging or pledging or otherwise encumbering any part or all of the Trust Assets and, in connection with the acquisition of any property, to assume a liability or to acquire property subject to a liability. v) Repairs - "Tile Trustee may male ordinary and extraordinary repairs and alterations in buildings or other Trust Assets, w) Reserves - The Tr. ustue may determine in a fair, equitable, and practical manner Mow all'I'rustee's fees, disbursements, receipts, and wasting assets shall be credited, charged or, apportioned between principal and income. The Trustee may set aside from trust income reasonable reserves for taxes, assessments, insurance premiums, repairs, depreciation, obsolescence, depletion, and for the equalization of payments to or for the beneficiaries; it i-nay select any and call accounting periods with regard to the Trust Property. x) Continuation of Business - The'Trustee may retain and continue any business or businesses in which the Trust has an interest for so long; as the Trustee may, in its sole *[Ile'1111-0DQIkJ- J. KAI I.US and MARY E. KAL.IMS Rcvacablc. 'v' n'I' I tt--1>ar„c t3 disc•ret.oll, consider necessary or desirable, whether of not the business .s conducted by the Trust as a partnership or as a corporation wholly owned or controlled by the Trust, with full authority to sell, settle and discontinue arty of them when and upon such terms and conditions as the Trustee may, in its sole discretion, consider necessary or desirable, 'The Trustee may retain and continue any business in which the Trust has or had an interest as a shareholder, partner, sole proprietor or as a participant in a joint venture, even though that interest may constitute all or a substantial portion of the 'Trust Property, The; Trustee :may directly participate in the conduct of any such business or employ others to do so on behalf of the Beneficiaries, The "Trustee; may e:\ecutc partnership a►greernemts, buy -sell agreeanerits„ and any amendinents to them. The Trustee may participate in the incoi-Irorartion of any 'Trust Property, any corporate reorganization, merger, consolidation, recapitalization, liquidation, dissolution, or any stock redemption or cross purchase buy -sell agreement, The Trustee may hold the stock of any corporation as 'Trust Property, and may elect or employ directors, officers, erriployees, and agents, and compensate them for their services. The Trustee may sell or liquidate, any business interest that is part of the Trust Property, The Trustee may carry out the provisions of any agreement entered into by Trustor(s) prior to their death for the sale of any business interest or the stock thereof, The Trustee may exercise all of tlae business powers granted in this Agreement regardless of whether the 'Trustee is personally interested or an involved party with respect to any business enterprise forrning a part of the 1"rust Property, y) Agricultural .Powers -The Trustee may retain, acquire, and continue arty farm or ranching operation whether as a sole proprietorship, partnership or corporation. The Trt►stee may engage in the production, harvesting, and marketing of both farm and ranch products cither by operating, directly or with lnana.gement agencies, hired labor, tenants, or share croppers. The Trustee may engage and participate in any government fiarn1 program, whether state or federally sponsored. The Trustee may purchase or rent machinery, equipment, livestock poultry, feed, and seed. The Trustee .nay improve and repair all farm and ranch properties, construct buildings, fencers, and drainage facilities; acquire, retain, improve, and dispose of wells, water rights, ditch rights, and priorities of any nature, The 'l'rustee may, in. general, do all things customary or desirable to operate a farm or ranch operation for the benefit of the beneficiaries of the various trusts created under this Agreement, r) .Funeral and Burial Expenses - TheTrustee may in its sole discretion pay the funeral and burial expenses, expenses of the last illness, and valid claims and expenses of an income benefioiary of any trust created under this Agreement. Funeral and burial expenses shall include, but not be limited to, the cost of rneniorials of all types and memorials services of such kind as the "Trustee shall approve. Valid claims and expenses shall include, but not be limited to, all state and federal death taxes. The payments made under this Paragraph z. shall be paid from the assets of the trust or trusts from which the Beneficiary was receiving income. The T II:UI )..)ills J. KALLUS uncl MkRY IsKAI UIS Ramilble I-Ivinr; 'C -usr--Page. 14 aa) Detain Property for Personal USe - The TI'UstCC may retain a residence or other property for personal use of a Beneficiary and to allow a BCl1Cfic4,lry to use or occupy the retained property free of rent and maintenance expenses. bb) Dealing with Third Parties - The Trustee rnay deal with any person or entity regardless of relationship or identity of any Trustee to or with that person or entity and may hold or invest all or any part of the'rrUSt Estate in common or undivided Interests with that person or entity. cc) Partitions, Divisions, Distributions The Trustee will have the power to make all partitions, divisions, and distributions contemplated by this 'Crust Agreement. Any partitions, divisions, or distributions may be made in cash, in kind, or partly in cash and partly in kind, in any manner that the Trustee deems appropriate (.including composing shales differently). The 'Trustee may determine the value of any property, which valuation will be binding on all beneficiaries, No adjustments are required to compensate for any partitions, divisions, or distributions having; unequal consequences to the beneficiaries, dd) Claims, Controversies - 'Che Trustee may maintain and defend ally claim or controversy by or against the 'Trust without the joinder or consent of any Beneficiary. The 'Trustee may commence or defend at the expense of the Trust any litigation with respect to the 'Trust or any property of the 'Trust Estate as the Trustee may deeixa advisable, and may employ, for reasonable compensation, such counsel as the "hrustee shall deem advisable For that purpose. . ee) Merger of Trusts - If at any tine: the Trustee of any trust created here;undei• shall also be, acting as trustee of any other trust created by trust instrument or by trust declaration for the benefit of'the same Beneficiar;y or beneficiaries and upon substantially the same terms and conditions, the "Trustee is authorized and empowered, if in the Trustee's discretion such action is in the best interest of the Beneficiary or beneficiaries, to transfer and merge all of thie assets then held under such trust created pursuant to this 'Crust Agreement to and with such other trust and thereupon to terminate the trust created pursuant; to this Trust Agreement. The Trustee is further authorized to accept the assets of any other trust which may be transferred to any trust created hereunder and to administer and distribute such assets and properties so transferred in accordance with the provisions of'this Agreement. fo Termination of Small Trust - Any corporate trLlstee whiChi is Serving as the sole trustee, of any Trust or any share thereof may at any time terminate such trust or share if, in the trustee's sole judg i-vent, the continued management of such trust or share is no longer economical because of the small size of such trust or share and if such faction will be deurned to be in the best interests of the :Beneficiary or beneficiaries, In case of such termination, the Trustee will distribute forthwith the share of the Trust Estate so terminated to the income The Ti WOORI- J KAI I US and MARY E KAL US Revocable I ivia&l'r&js1-•Page 15 beneficiary or beneficiaries, per stirpes. Upon such distribution, such trust or share will terminate and the Trustee will not be liable or responsible to any person or persons whomsoever for its action, The Trustee will not be liable for failing, or refusing; at any time to terminate any trust or a shard thereof as authorized by this paragraph. gg) Power to Determine Income and Principal - Dividends payable in stock, of the issuing corporation, stock splits and capital grains will be treated as principal. Except as herein otherwise, specifically provided, the Trustee will have full power and authority to determine the manner in which expenses are to be borne and In which receipts are to lie credited as between principal and income, and also to determine what will constitute principal or income, and may withhold from Income such reserves for depreciation or depletion as the Trustee may deem fair and equitable, In determining such.. matters the Trustee may give consideration to the provisions of the Texas Trust Code (or its successoI° statutes) relating; to such matters, but will not be bound by such provisions. hh) Gencration-Skipping "faxes and Payment - If the TRIStec ccrosiders any distribution or termination of an interest or power hereunder as a distribution or termination subject to a generation -skipping; tax, the Trustee is authorized; I) To augment aay taxable distribution by an amount which theTrustee estimates to be sufficient to pay such tax and charge the same to the particular trust to which the tax related without actiustment of the relative interests of the beneficiaries, 2) To pay Such tax, in the case of a taxable termination, from the particular trust to which tileW tax relates without adjustment ofthe relative interests of the beneficiaries. If such tax is imposed in part by reason of the Trust Assets, the Trustee will pay only the portion of such tax attributable to the taxable termination hereunder taking; into consideration deductions, exemptions, credits and other factors which the Trustee deems advisable; and 3) To postpone final termination of any particular trust and to withhold all or any portion of' the "Trust Estate until the Trustee is satisfied that the "Trustee no longer has any liability to 17ay any generation -skipping tax with reference to sGicll trust or its termination. ii) Compensation Powers -The Trustee shall pay from income or principal all of the reasonable expenses attribLitable to the administration of the respective trusts created in this Agreement. The Trustee shall pay itself reasonable compensation for its services as Fiduciary as provided in this Agreement, and shall reasonably compensate those persons ernployed by the Trustee, including Agents, auditors, accountants, and attorneys, "Cjjc'r14EQ1)ORI: J. KAI I US and MARY E. KAi I US R4vggab1e I.ivin g'li. nest --Page 16 Section 2. Ieciri Provision furSc►ruortltiun Stock Notwithstanding what is otherwise provided in this Trust Agreement, if at any tine theTrust contains any stock of a corporation which elects or has elected treatment as in "S Corporation" as defined by Section 1361(a)(1) of the Internal Revenue Code (or any corresponding successor statute), such stock. wi I l be segregated from the other assets of such Trust and treated as a separate trust. The 'Trustee will furthe►° divide the separate trust into shares for each Bcileficiary and such shares will be distributed outright or held in trust as herein provided. In addition, all other provisions of this Trust Agreement will apply to each share held in trust (and constituting a separate trust) except that the Trustee will distribute all of the incorne from each separate trust to its beneficiary in convenient installntients at least annually. It is our intent that each separate trust will be recognized as a "Qualified Subchapter S Trust" (QSST) under Section 1361(d)(2) of the Internal Revenue (Node (or any corresponding successor statute). Notwithstanding any provisions ofthis'T'rust Agreement to the contrary, the Trustee's powers and discretions with respect to the administration of et.tch separate trust (including, methods of accounting, bookkeeping, making distributions and characterizing receipts and expenses) will not be exercised or exercisable in a manner consistent with allowing each separate trust to be treated as a QSS'f' as above described. ARTICLE THREE Administration of'T'rust During Trustors' Lives � ,;Qtioi 3.01. 'FrLLs, U.11CUIl1C During the jrAnt lives of the Trustors, the Trustee shall al. least annually, unless otherwise directed by both Trustors in writing, pay to or apply for the benefit ofhusband and wife, all of the net income from the Trust Estate in the same proportions as each of the spouse's respective interests in the 'Trust lastate. ac;ctiun 3.C)2; Protection of'frusror in Emit oflncapricity During the joint lives of the 'I,rustors, should either Trustor become incapacitated as defined in Section 3.03 below, theTrustee may, in the Trustee's absolute discretion, pay income; and principal for the benefit of the incapacitated 'Trustor, and may pay to or apply for the benefit of that 'T'rustor such sums from the net income and from the principal of the "Trustor's separate lsstate as the Trustee, in the 'T'rustee's absolute; discretion, believes is necessary or advisable for the medical care, comfortable maintenance, and welfare of the 'T'rustor. 'II'he'1'L11:ODORF J..K-AUUS and MARY F KAL l US Revocable Livin>; Tri t--Page 17 Section 3.03. Incas ac_4 In the event that any 'Trustee on' any Beneficiary hereunder conies into possession of any of the following: a) A jurisdictional]y applicable court order holding the party to be legally ineapacitate� to act on his or her own behalf and appointing a guardian or conservator to act fen° hina or her, or b) Written certificates which are duly executed, witnessed, and acknowledged of two licensed physicians, each certifying that the physician has examined the person and has concluders that, by reason of accident, mental deterioration, or other cause, such person has become incapacitated and can no longer act rationally and prudently in his or her own financial best interests, or e) Evidence which such Trustee or Beneficiary deems to be credible and currently, applicable that a person has disappeared, is unaccountably absent, or is being detained under duress, and that he or she is unable to effectively and prudently look after his or her own best interests, then in that event and under those circumstances: I.) Such person is cleernecl to have become incapacitated, as that terry► is Used in this 'Trust Agreernent, and 2) Such incapacity is deemed to continue until such court order, certificates, anchor circumstances are inapplicable or have been revolted. A physician's certificate to the effect that the person is no longer incapacitated shall revoke a certificate declaring the person incapacitated, The certificate which revokes the earlier certificate niay be executed either (i) by the originally certifying physician or (ii) by two other licensed, board certified physicians. No'ITrustee shall be under any duty to institute s:dlay inquiry into a person's possible incapacity. The reasonable expense of any such inquiry shall be paid from the Trust Assets. Section 3.04. Principal Invasion During fhe joint lives oftho Trustors, should the net income of assets contained in this T1"List at the tllTae of the Trustor's death be insufficient to provide for the care, maintenance or support of the 1'rustors as herein defined, the Trustee may, in the 'Trustee's sole and absolute discretion, pay to or apply for the benefit of the Trustors or either or then, or any of their dependents, such amounts from the principal of the Trust Estate as the Trustee de;enis necessary or advisable for the care, maintenance; or support of the 'Trustors. The THEODORE J. K An n US and MARY E, KALI US Rg_vocablc Living J list --Page 18 If the Trustor's residence; property is a part of the: Trust, the Trustors shall have possession of and full management of the residence and shall have the right to occupy it: rent free. Any expenses arisingfrom the maintenance of the property and from all taxes, liens, assessments, and insurance premiums are to be paid from the Trust to the extent that assets are available for payment. All"TICLE FOUR Insurance Policies and Retirement flans cction 4LUl. During; Trustors' Life During each and either of the ':f rustors' lives, 'Trustee shall have, the following rights, and Trustee shall have the following duties, with respect to insurance policies or retirement plans owned by or made payable to this 'Trust. a) Eaaeh'lrustor reserves, and may exercise without the approval of'I"rusteo or any Beneficiary, all of the rights., powers, options, and privileges with respect to any insurance policy, retirement plan, annuity, or any other third party beneficiary contract made payable to this 'Frost or deposited with 'Trustee. b) 'Frustee shall deliver to Tr'eastors or either of their designee, upon dither 1'rustors' written request, any and all insurance, policies, retirement plan documents, annuity contracts, and all other third party beneficiary contracts, as well as all related documents, which are owned by or deposited with Trustee pursuant to this Trust. Trustee; shall not be under any obligation to have any or all of such documents returned. c) 'Trustee shall have no obligation to see that prerniunls or other Sums that may be due and payable under any insurance policy, retirement plan, annuity contract:, or any other third party beneficiary contract are paid. Further, Trustee shall have no obligation with respect to any insurance policy, retirement plan, annuity contract, or other third party beneficiary contract, as well as any docurnents related thereto, deposited witll'-1,rustee, other than to provide for their safekeeping. d) No provision of this Agreement shall be; construed to ilTIpose ally obligation oll TCUSWI-S to rllaltittlin any insurance 13oIicy, retlri:'ment plflll, trill'lurl'y contract, or tiny L7tI1C1' third party beneficiary contract in force. Thc'1 HUDDOU. J. KAWAIS and MARY E, KAL.LUS Revocable Livilng1rust-41slse 19 c ti n4. 2, o n ,L)_ g. ► a) Upon the death of any'FrUStOr, the Trustee shall make all appropriate elections with respect to insurance policies, retirement plans, and other death benefits which are owned by or payable to this 'Trust. b) The 'trustee shall make every reasonable effort to collect all sums made payable to this '['rust or to 'Trustee under all life insurance policies, or other non -retirement death benefit plans, which provide for death proceeds made payable to or owned by the Trust. c) In collecting policy or death benefit proceeds, the Trustee may, in its sole and absolute discretion, exercise; any of the settlement options that may be available under the terms of a policy or any other third party beneficiary contract. d) The 'Trustee shall not be liable to any Beneficiary for the settlement option ultimately selec".ted. Section 4.03, retirement Plan Elections a) The 'Trustee shall have the right, in its sole and absolute discretion, to elect to receive any retirement plan death proceeds, whether under a qualified pension, profit sharing, Keogh, individual retirement account or any other retirement plan, either in a lump SUM Or 1n any Other manner permitted by the terms of the particular retirement plan, b) "The'Trustee shall not be liable to any Beneficiary for the death benefit election ultimately selected. Section 4.Q4. _( ollection Proceedings The `Trustee may institute proceedings, whether in law or equity, administrative or otherwise, to enforce payment of such proceeds. The Trustee need not, except at its option, enter into or maintain any litigation or take action to enforce any payment until it has been indemnified to its satisfaction for all expenses and liabilities to which, in its sole judgment, it may be subjected. The rrustec is expressly authorized, in its sole: and abS011lte discretion, to ad,Just, settle, and compromise: any and all claims that may arise from the collection of ally death proceeds. 'The decisions of the:'rrustee shall be binding and conclusive on all beneficiaries. 'rh • Ttffi JDQRlj ( KAI I US and MARY I' KALI US Rcvoe;ablc l iving� I're►st--Pagc 20 Section 4.05._Liability of Payor No person or entity which pays insurance proceeds or other death proceeds to the Trustee as beneficiary, shall be required to inquire into any of the provisions of this Trust or to see to the application of any such proceeds by the Trustee. The receipt of the proceeds by the Trustee shall relieve the payor of any further liability as a result of making such payment. AR'.rIC LE FIVE Administration Upon the First Death of a Spouse Section S.01. Proyisim,:Aft(L• tllc firs D,.gatll On the death of either Trustor leaving the other Trustor surviving; him or her, the Trustee shall collect all insurance proceeds payable to the Trustee by reason of such death, and all bequests and devises distributable to the Trust f;state, and shall divide the entire'I'rust Estate into two'separatc Trusts to be known and herein designated as Survivor's'TRIM "A.", and Decedent's 'frust "B" ect' .ion-�0_. Si r.1 viv4t'�_ wst " "C-011-Mit SurviVOr's 'Trust "A", in addition to other property, if any, to be added to it under the terns of this Agreement, shall consist of a one-half C/2) interest in the con1nlunity property Of'tile '['rust Estate if applicable, and the separate property of the surviving 'Trustor. Upon creation of this ']'rust, slu•vivor's 'I"rust "A" shall refflain revocable during the life of the surviving Trustor. Upon the death of the surviving Trustor this share shall become irrevocable;. Section 5.03.. Deep ent's Trust "B" Content 1ecedent's Trust "B" shall consist of a one„half ('/2) interest in the community property of the 'Trust Estate and the separate property of the decedent Trustor. Decedent's Marital share shall be placed in to Decedent's Trust "B". Upon creation of such Trust share, Decedent's Trust "B" is irrevocable. The 'Trustee :shall have the sole discretion to select. that portion of the joint assets which shult be included to l_)ecl.'dctit's Trust 1113". The .F rusteQ dull value a ny asset selected by the "Trustee for distribution in kind to the marital share at the value of such asset at the date of distribution to the marital share. 7'he't'I II:U[Z.)It[: JLKALLUS and MARY L KALLUS Revocable Livina Tnist--Padge 21 section 5.04. Maxiltiu� i Mcaa ital Deduction Except as otherwise expressly stated herein, the term "maximum marital deduction" shall be construed as a direction by the deceased "Frustor to exercise: any election respecting the deduction of F statc administration expenses, the det i-n-iination ofthe Estate tax valuation date, and any other tax election which may be available under any tax laws, in such manner as will result in a larger allowable Estate tax marital deduction than if the contrary election had been made. Suction 5.05. ivi •'Sm of jAii tpl Shy re The deceased ,rrustoes share shall be divided and administered as follows: an amount equal to the equivalent exen-iption available by reason of the Unified Tax Credit available under the hitesrnal Revenue Code or any successor or niodified version of that Code shall be administered under the terms of" Frust ":B" as hereinafter set forth and any atnount of the marital share exceeding the amount allocated to 'Trust "B" ,;,hall be adrinistered under the terms of."Frust "A". However, no property shall be allocated or distributed to Trust "A" which does not qualify for the estate tax marital deduction as defined by the Intemal Revenue Code. Section S.06. Comae► c s of Decedent's Trust"B" Decedent's Tnist "B" shall be composed of cash, securities or other property of the '-Trust Estate (undiminished by any estate, inheritance, succession, death or similar taxes). I-LIst "B" shall have a value equal to the largest amount, after allowing for the Unified 'Tax Credit ri ainst the Federal Estate Tax and for the ;Mate Death Credit against such tax (but only to the extent that the use of such State Death Tax Credit does not increase the death tax payable to any -state), which will not result in a Federal Estate Tax being Imposed on the Estate of the deceased Trustor. Se tin ,C)7� 1'slcction of llziscal_Year If perrnitted by applicable Uax law, the Trustee may elect a different fiscal year for F.)ecedent's TrelSt "B" Section 5.08. Surviv Qr's "Trust "A" survivor's Trust "A" shall consist of the separates property of the surviving spouse, and the surviving spouse's share of any comn-Iru,tity property. In addition, Survivor's Trust "A" shall consist of the amount of the decedent's separate property or share of community property in excess of the amount allocated to Trust "B", but only to the extent that the amount The TIMODORF J. KAI t US and M.5RY F KAI I IS Revocable I ivitim Trust. -Page 22 of decedent's property allocated to 'Trust "A" does not exceed tell per cent (101/0) of the excess over the amount thereof allocated to Trust " B The said Survivor's 'Trust "A" shall be held, administered and distributed as follows: a) light to Income .- At death, the Trustee shall pay to or apply for the benefit of the surviving spouse during his or her lifetime all of the net income from Trust "A" in convenient installments but no less frequently than quarterly. b) Right to Principal - In addition, flIC Trustee may pay to or apply for the benefit of the surviving spouse such scums from the principal of "Trust "A" as in his or her sole discretion shall be necessary or advisable from time to time for they, cclucation, comfortable support, maintenance and health of the surviving spouse, taking into consideration to the extent the ,Frustee deems advisable, any other income or resources of the surviving spouse Known to the Trustee. c) Right to Withdraw Principal - The: surviving spouse may, at any time during his or her lifetime and from time to time, withdraw all or any part of the principal of'Trust "A", free of trust, by delivering to the 'Trustee an instrument in writing, duly signed by the surviving slaoi.ise, describing the property or portion thereof desired to be withdrawn, Upon receipt ofsuch instrument, the Trustee shall thereupon convey and deliver to the: Spouse, free of trust, the property described in such instrument. d) Control of:' Assets . The surviving spouse may, at any time by written notice, require the. "Trustee either to make any nonproductive property of this Trust productive o►° to convert productive property to nonproductive property, each within a reasonable tirric. The surviving spouse may further require the Trustee to invest part, or all, of this share of the Trust Assets for the purpose of maximizing income rather than growth, or growth rather than income, c) Right to Change Beneficiary - The surviving spouse retains the right to change the Beneficiaries or Trust "A" f) Distribution of Residual of '-Trust "A" - The balance of the principal of Trust "A" shall be distributed in accordance with the provisions specified ill this Trust. If the spouse whose share is represented by Trust "A" makes specific provisions for Beneficiaries, and such provisions cannot be complied with due to the death of a sped fled Beneficiary, or if° for any reason a specified distribution cannot be made as directed, then the property shall pass. to Mat 13e neficiary's children per stirpes. Y no children are living, then the property shall pass by the laws of intestate succession of the Mate of 'Texas. g) General ,Power of Appointment -• The; surviving spouse shall have a power of 'rhe ,ruEQDURr J. KALLUS and MARY F KA1 L!JS RcvocUlAy 1Jyinf! TrUsI--Page 23 appointment such as to brim; the 'Trust into compliance with the provisions of Section 2056(b)(5) of the Internal Revenue Code and any'Treasury Regulations, Revcnuc Rulings, or• Revenue Procedures that interpret that Section of the Code. )eccc nt's 7'ru.St "B Decedent's Trust "B" shall be irrevocable and shall be held, administered and distributed as follows: a) Payment of Income - Commencing with the date of the predeceased spouse's death, the 'Trustee shall pay to or apply for the benefit of the surviving; spouse during; his or her lifetime all the net income from 'Trust "B" in convenient installments but no less fil-equently than quarterly. b) Payment of Principal - The Trustee may pay to, or apply for the benefit of, the surviving spouse, during his or her lifetime, such sums front the principal Of TI-LISt "B" as in the Ti•tisteee's sole discretion shall be necessary or advisable from time to time for the education, comfortable support, maintenance and health of the surviving spouse, taking; into consideration to the extent the Trustee deems advisable, any other income or resources of the sUrVlVing; SpoU.se Known to the 1'rLiStee. c) Discretionary Payments - In addition to tide income and discretionary payments of principal from this Trust, there; shall be paid to the; surviving spouse, during; his or her lifetime, from the principal of this Trust, upon the SUIViving spouse's written request, during the last month of each fiscal year ofthe'Trust an amount not to exceed five thousand ($5,000) dollars or five (5%) percent of the aggregate value of the principal for such fiscal year, whichever is greater. This right of withdrawal is noncumulative, so that if the surviving spouse does not withdraw, during, such fiscal year, the full amount to which he or slit: is entitled under this paragraph, his or her right to withdraw the amount not withdrawn shall lapse at the end of that fiscal year. d) ('ontrol of Assets -'The surviving spouse may, at any time by written notice, require the 'Trustee either to make any nonproductive property of this Trust productive or to convert productive property to nonproductive property, each within a reasonable trifle. The surviving spouse may further require the TrUStee to invest part, or all, of this share of "Trust Assets For the; purpose of maximizing income rather than growth, or grmN,th rather than income. e) Distribution ot'Reswue of-1'rust "B" -'The bahtncc: of'tho principal of'Trust "B" shall be distributed in accordance with the provisions of this Trust Agreement. 1'he 'I'l ll{(:)l101tl{ J. KALLUS and MART Livin guest--1'age 24 if the spouse whose share; is represented by Trust "B" makes specific provisions for Beneficiaries, and such provisions cannot be Complied with due to the death of Ga specified Beneficiary, or if for any reason a specified distribution cannot be made as directed, than the property shall pass to that Beneficiary's children per stirpes. if no children are living, then the property shall pass by the laws of intestate succession of the State of Texas. 5,stj n4 5.10. Last U&Pi. eo On the death of the first of the Trustors to die, the Trustee shall pay from the Trust the expenses of the deceased Trustor's last illness, funeral, burial, and any iinheritance, estate or death taxes that may be due by reason of the T'rustor's death, unless the Trustee in his or her absolute discretion determines that other adequate provisions have been made for the payment of such expenses and taxes. All death taxes upon, property not passirig under this Agreement shall be apportioned in the manner provided by law. ARTICLE SIX Administration upon Death of Surviving Spouse ection 6 f)1^ eeond Death, Oil the death of the last 'Trustor to (lie (thc "Surviving Trustor"), the Trustee shall distribute all property remaining in the Survivor's "A" Trust and the Decedent's "B" 'Trust in such a manner and to such persons, including the Estate or the Creditors, as directed in this Trust Agreement, 4acction (.02 m Payent of the Second Death Ex Gscs On the death of the surviving T rustor, the Trustee shall pay fron-i the Trust the expenses of the surviving Trustor's last illness, funeral, burial and any inheritance, estate or (:ieath taxes that may be due by reason of the surviving Trustor's death, unless the Trustee in his or her absolute discretion determines that other adequate provisions have been made for the payment of SUC11 expenses and taxes. Section G 03 Trust inconnc and Principal Distribution a) The Trustee shall apply and distribute the net income and principal of each of the shares of the resulting, Trust Estate (consisting of tine Survivor's "A" T'I•ust and tine Decedent's "B" 'Trust ), after giving effect to the section of this Trust Agreement entitled "5pecini Directives," to tale following Beneficiaries in the indicated fractional shares; PA'rRICIA M. SHIROCKY 331/3` P PATRIC":K W..KALLUS 3 31/30/4 TED JOIN KALLUS 331/3% Th Tt1F DORE J KALLUS and MARY I Trust --Page 25 b) If all of the Trustor's Benefciaries and their children should .fail to survive the final distribution of the Trust Estate, all of the Trust Estate not disposed of as hereinabove provided shall be distributed as provided for in this Trust Agreement, Section G 04 Princ_.plc of Representation If a Beneficiary of the Trustor's should fail to survive to collect his or her share, that share shal I pass to the surviving issue of that deceased Beneficiary per stirpes and with right of representation, AR'FICLE SEVEN Confidentiality, Omissions and Conflicts 5.ection 7.01. Benefits o—nfidcnlittl "Me Trustors further declare that it is their desire and intent that the provisions of this Trust Agreement are to remain confidential as to al I parties. The Trustors direct that only the informat►on concerning the benefits paid to any particular Beneficiary shall be revealed to such individual and that no individual shall have a right to infonnation concerning the benefits being paid to any other Beneficiary. I)) 'L.U,._.Speci ►c 0iiiissions Any and all persons and entities, except those persons and entities specifically named [ierein, have been intentionally omitted from this Trust Agreement. 'e tion 7.0L Resolution of Conflict Any co►itroversy between the Trustee or Trustees and any other Trustec or Trustees, or between any other parties to this Trust, including Beneficiaries, involving the construction or application of any of the terms, provisions, or conditions of this Trust shall, on the written request of either or any disagreeing party served on the other or others, be submitted to arbitration. The parties to such arbitration shall each appoint one person to hear and determine the dispute and, if they are unable to agree, then the two persons so chosen shall select a third impartial arbitrator whose decision shall be final and conclusive upon both parties. The cost of arbitration shall be borne by the losing party or in such proportion as the arbitrator(s) shall decide. Such arbitration shall comply with the commercial arbitration rules of the American Arbitration Association, 140 West 51st Street, New York, New York, 10200. Section % Q4 lncontcatability The beneficial provisions of this Trust Agreement are intended to be in lieu of any The THIDOOR1: J. KA UMS 111 MARY t KAt t US Rcyocablc Living Trust --Page 26 other rights, claims, or interests ofwhatsoever nature, whether statutory or otherwise, except boria fide pre -death debts, which any Beneficiary hereunder may have in 'Trustor's Estate or in the properties in trust hereunder. Accordingly, if any Beneficiary hereunder asserts any claim (except a legally enforceable debt), statutory election, or other right or interest against oi° in Trustor's Estate, or any properties of this 'Trust, other than pursuarlt to the express terms hereof, or directly or indirectly contests, disputes, or calls into question, before any court, the validity of this Trust Agreement, then: a) arch Beneficiar ay shall ther eby absolu-tely forfeit any and al I beneficial interests of whatsoever kind and nature; which such Beneficiary or his or her heirs might otherwise have under this Trust: Agreenu;nt and the interests of tile other Beneficiaries hereunder shall thereupon be appropriately and proportionately increased; and b) All of the provisions of this Trust Agreement, to the extent that they confer any benefits, powers, or rights whatsoever upon such claiming, electing or contesting Beneficiary, shall thereupon become absolutely void; and c) Such clailrling, electing, or contesting Beneficiary, if then acting as a Trustee hereunder, shall autornatically cease to be a Trustee find shall thereafter be ineligible either to select, remove, or become a Trustee hereunder. ARTICLE EIGHT General Provisions Section b U l Coordination with Trustor's Probate E gate a) At any time during the continuance of this 'Trust including subsequent to the death ofeither `Frustor the'i'rustees may, in their sole and uncontrolled discretion, distribute to the deceased Trtastor•'s Probate Estate cash and/or other property as a Beneficiary of the Trust. b) All other provisions to the contr•rlry notwithstanding, under no circumstances shall any restricted proceeds, as hereinafter defined, be either directly or indirectly: (i) distributed to or for the benefit of the Trustor's Executors or the 'Frustor's Probate Estate; or (ii) used to pay any other obligations of the Trustor's Estate. The tern? "restricted proceeds" means: l) All qualified plans, individual retirement accounts, or similar benefits wl-lieh are received or receivable by any Trustee hereunder, and which are paid solely to a Beneficiary other than the ENecutor of tile. 'rrustor's Gross Estate For T,'ederal u1state Tax purposes; and 2) All proceeds of insurance on the 'Trustor's life which, if paid to a 111 "Tlir ;l)Oljt• a KAI LUS and MARY I' KAI t US Revocable Lk�i w Trust --Page 27 Beneficiary other than the Trustor's Estate, would be exempt from inheritance or sirnilar death taxes tinder applicable state death tax laws. Section 8 U2L Di�eetic�ii to Minimize Taxes In the administration ofthe `t'rust hereunder, its f�iduciarics shall exercise all available tax related elections, options, and choices in such a manner as they, in their sole bUt reasonable judgement (where appropriate, receiving advice of tax counsel), believe will achieve the: overall minimum in total combined present and reasonably anticipated future administrative expenses and taxes of all kinds. rfhis applies not only to such 'Trust but also to its Beneficiaries, to the other Trusts hereunder and their Beneficiaries, and to the Trustor's Probate Estate. Without limitation on the generality of the foregoing direction (which shall to that extent supersede the usual fiduciary duty of impartiality), such 11duciurics shall not be accountable to any person interested in this Trust or to Trustor's Estate for the manner in which tile), shall carry out this direction to minimise overall taxes and expenses (including any decision they may make not to incur the expense of a detailed analysis of alternative choices). Even though their decisions in this regard may result in increased taxes or decreased distributions to the Trust, to the Estate, or to one or more Beneficiaries, the Fiduciaries shall not be obligated for compensation readjustments or reimbursements which arise by j'eason of the manner in which the Fiduciaries carry out this direction. Secti011j L);j,�The Rule Against PeWett�uitics Unless sooner terniinated by the express provisions of this Agreement, each trust created in this Agreement shall terminate twenty-one years after the death of the last survivor of the group composed of Trustors and those of Trustors' descendants living at the time of the surviving Trustor's death. At that time, the property held in trust shall be discharged of any further trust, and shall immediately vest in and be distributed to those persons entitled to receive or have the benefit of the income from the respective trust. For purposes of distributions under this section only, it shall be presumed that any person then entitled to receive any discretionary payments of the income of it separate trust is entitled to receive all of the income, and it shall be presumed that any class of persons entitled to receive discretionary payments of income is entitled to receive all of such income, pet, stirpes. ccti 04 Protective Clause To the fullest extent permitted by law, the interests of gill the Be11e1lC1t11'iCS in the various trusts and Trust Property subject to this Trust Agreement, except for Trustors' interest therein, shall not be alienated, pledged, anticipated, assigned, or encumbered unless specifically authorized by the terms of this Trust Agreement. Such interests shall not be "I he t l iL'OhOlti' J KAt I Sand MARY F K A I I I IS RevocaUic i.iving'tl ust--F'abe 28 subject to legal process or to the claims of any creditors, other than Creditor's of Trustor(s) to tilt extent of each respective 'T'rustor's interest in the trusts or Trust Property, while such interests remain Trust Property. Swim n 8.()S;�urvivorshiy Presunll tiorrs In the event that the t:wo Trustors should die tinder cireurnstances in which the order of their deaths cannot be determined, then, in respect to the administration of the separate prope:i`iy of each Trustor (and in respect to the administration of one-half of any community property) eacll'fTrustor shall for purposes of the marital deduction gift be consicl.ered to have; been survived by his or her spouse. e4tjU11 �.00. C;.in� the Trust Sites After the death of the surviving spouse, the situs of this Trust Agreement may be changed by the unanimous consent of all of the beneficiaries then eligible to receive mandatory or discretionary distributions of net income under this Agreement. lfstich consent is obtained, the beneficiaries shall notify the "T'rustec in writing of such change of trust'situs, and shall if necessary designate it successor corporate fiduciary in the new sites. "I"his notice; shall constitute removal ofthe current Trustee it appropriate, and any successor trustee shrill assume its duties as provided under this Agreement. A chanl,e in situs under this Sections lial I be final and binding, kind shall not be subject to judicial review. Sectio 1_ 3.0 7. Construction Unless the context requires otherwise, words denoting the singular may be construed as denoting the plural, and words of the plural may be construed as denoting; the singular. Words of one gender may be construed as denoting another gender as is appropriate within such context. section IN Holdings of Articles Sections and Paragraphs "I'lie headings of Articles, Sections and Paragraphs used within this Agreement are included solely for the convenience and reference of the reader. They shall have no significance in the interpretation or construction of this Agreement. S-QQtism e - _NQ isc.s. All notices required to be given in this Agreement shall be made in writing either by: a) Personal delivery to the party requiring notice, and securing a written The nmopou j, KAr t Lis and MARY t- KAI i US Rcvocablcl ivinQ'frusl •t'nbe 29 receipt, or b) Mailing notice by certified United States mail, return receipt requested, to the last known address of the party requiring notice. 17he effective. date, of the notice shall be tlic date of the written receipt or the date of the return receipt, if.•received, or if not, the date it would have normally been received via certified mail provided there is evidence of mailing. Sec,tion D iv • For purposes of this Agreement ''delivery" shall mean: a) Personal delivery to any party, or b) Delivery by certified United States mail, return receipt requested to the party snaking delivery. The effective date of delivery shall be the date of personal delivery or the date of the return receipt, if received, or if not, the date it would have normally been received via certified snail provided there is evidence of mailing. 'cction 8j I. Applicable State Law Tlne validity of this 'Trust Agreement shall be determined by reference to the laws of the State, oi. "Texas. Questions with regard to the construction and administration of the various trusts contained in this Agreement shall be determined by reference to the laws ofthe state in which file trust is then currently being administered. section $, I launlicate ri irk 1flI's This Agreement may be executed in several counterparts; each counterpart shall be considered a duplicate original Agreement. Sccti n $,1 ._ _Scverability If tiny provision of this Agreement is declared by a court of competent jurisdiction to be invalid for any reason, such invalidity shall not affect. the remaining provisions of this Agreement. The remaining provisions shall be fully severable, and this Agreement shall. be construed and enforced as ifthe invalid provision had never been included in this Agreement. 1:hq 'I'H S)nQRI; 11CAL 1 115 and Ml�1tY E. KAI I lJS Revocable t ivinu'frust--Pase 30 ARTICLE NINE [31efillitions As used in this Trust Agreement, the following terms shall have the following nlealling, unless otherwise specified in this Agreen'ient: aj' t n 9. 1. J a %cl The terin "husband" shall mean THE-1O1]ORF J. KALLUS. Section 9. 2. Wife The term "wi:l:e" shall mean MARS' E. KALLUS. c lot 9SU _ 'i' 1st 11' The term "Trustor" shall refer individually and eollec;tively to Husband and Wife, and It shall have the sarm,., legal ille aning as "lirantor," "Settlot'," ..Trusty aker," or any olher term referring to the maker of a trust. aectiotl 9. 4, Descendent The, term "descendant" shall mean the lawful issue of a deceased parent in the line of descent but does not include the issue of any parent who is a descendant of the deceased person in question and is living at the time in question. &gcjots 9.05,_ C:hiI . The term "child" includes any issue horn to decedent or legally adopted by the decedent or a posthumous child of a decedent, and a posthumous child is to be considered <:ts living at the time of his parent's death. The terms "survives" or "surviving", Unless otherwise indicated herein, shall be construed to mean surviving the decedent For at least sixty (60) days. if the person referred to dies within sixty (60) days of the death of the decedent, the reference to Iliad or 11er will be construed as if he or she had failed to survive the decedent; provided, however, that any such person will have during such period the right to the use and the enjoyment as a life tenant of all property in which his or her interest will Fail by reason of death during such period. A pet-son's descendants shall include all of his or her I ineal descendants through al l generations. A descendant in gestation who is later born :,live shall be considered a descendant in heing throughout the period of gestation. An adopted person, and all persons who are the descendants by blood or by legal adoption while udder the age of eighteen years of such adopted person, shall be considered descendants of the adopting parents as well as the adopting prtrents' ancestors. The THEUDORb J K kl LUS fled MARY E. KAt I.tJS Revocablgl.iving 'l'rust--1'age 31 Section ►).06. tssuc The term "issue" will include all natural and adopted children and descendants and those legally adopted into the line of descent. Section 9,07. Per Stirpes 1'he term "per stirpes" rneans strict per stirpes and does not mean per capita with representation, Whenever a distribution is to be made to a person's descendants, per stirpes, the distributable assets are to be divided into as many shares as there tare then living children of such person and deceased children of such person who left then living descendants, Each then living child shall receive one share and the share of each deceased child shall be divided among such child's then living descendants in the same manner. 13eneficiaries entitled to take under a "per stirpes" clause will include both natural and adopted children and their descendants. cctioi 9,pL�L� 'rt st n . cts t nd 'Trttist Estate The tern'is "TrUSt Assets" and "Trust F.state" Include all assets ol. any trust created hereunder and income derived born such assets and all proceeds of any description derived from the sale, exchange or other disposition cif such assets. Sectio 9 0 Adopted and AC corn Persons_ Persons who are legally adopted while they are under eighteen years of age (and not those persons adopted after attaining eighteen years of age) shall be treated for all purposes under this Agreement as though they were the naturally born children of their adopting parents. A child in gestation who is later born alive shall be considered a child in being throughout the period of gestation, Seetican �)_.l OI,ianciicaaued Beneficiar;los Any Beneficiary who is detennined by a court of competent jurisdiction to be incompetent shall not have any discretionary rights of a Beneficiary with respect to this'I'rust, or to their share or portion thereof. The 'Trustee shall hold and maintain such incompetent Beneficiary's share of the Trust Estate and shall, in the; Trustee's sole discretion, provide for such Beneficiary as that Trustce would provide f6r a minor. Notwithstanding the foregoing, any Beneficiary who is diagnosed for the purposes of governmental benefits (as hereinafter delineated) as .being not competent or as being disabled, and who shall be entitled to Sovernn,ental supprn•t and benefits by reason of such incompetency or disability, shall cease to be a Beneficiary of this Trust. Likewise, they shall cease to be a Beneliciary if any share or portion of the principal or income of the Trust shall become subject to the claims of any governmental agency for costs or benefits, fees or charges. The THGOD ZEi J. KAI 1 S and MARY E. KAIJAIN lkeyocabic .ivi Tr is --Page 32 The portion of the Trust Estate which, absent the provisions of this section, would have been the share of such incompetent or handicapped pcison shall be retained in trust for as long as that individual lives. Tile Trustce, tit his or llcr sole discretion, Shall utiliZe Such funds for the maintenance of that individual, if such individual recovers from his or her incompetcncy or disability, and is no longer eligible for aid from any governmental agency, including costs or benefits, fees or charges, such individual shall be reinstated as a Beneficiary after 60 clays from such recovery, and the allocation and distribution provisions as stated herein shall apply to that portion of the Trust Estate which is held by the 'Trustee subject to the foregoing provisions of this section. If said handicapped Beneficiary is no longer living and shrill leave children then living, the deceased child's share shall pass to those children per stirpes. If there are no children, the share Shall be allocated proportionately alnong the remaining Beneficiaries. S,cctio 9,_l l-,ducitt Qli As used in this trust, "education" shall include: any course of study or instruction at an accredited college or university granting; undergraduate or graduate degrees; any course of study or instruction at any institution for specialized, vocational, or professional training; any curriculum offered by any institution that is recognized for purposes of receiving financial assistance from any state or fcdcral agency or program; ally course of study or instruction which may be useful in preparing a Beneficiary for any vocation consistent with the Belieficiary's abilities and interests. Distributions for education may include tuition, fees, books, supplies, living expenses, travel, and spending illoney to the extent that they are reasonable, 'cctio 19.12. Personal 1 cpresent<1tiyC For the purposes of this Agreement, the term "Personal Representative" shall include i,ul executor, administrator, guardian, custodian, conservator, trustee, or any other form of personal representative, 5'(11CIi0n -21_3. 111C W1-( lty l,xcept as otherwise provided in this Agreement, any individual may be treated as being under a legal disability, incompetent, or incapacitated, if: declared or adjudicated as such by a court of competent jurisdiction; or a guardian, conservator, or other personal representative of such individual's person or estate has been appointed by a court of competent jurisdiction; or certified as such in writing by at least two licensed physicians. When required to give reasonable effeet to the context in which used, pronouns in the lilasculine, felninine or neuter gender include each other, and nouns and pronouns in the plural or singular number include each other. 1 he t iiL' 1)OCti 7. J KA[ LUG andMARY L' KlAl i l IS Revocable 1 ruin "rust--t'age 33 Section 9.1 S Internal Revenue Code Termin bogy As used herein, the words "gross estate", "adjusted gross estate", "taxable estate11, "unified credit" "state death tax credit" "maximum marital deduction" "marital deduction" and any other word or words which from the context in which it or they are used refer to the Internal Revenue Code shall be assigned the same meaning as such words have for the purposes of applying the Internal Revenue Code to a deceased Trustor's Estate. Reference to sections of tile Internal Revenue Code and to the Internal Revenue Code shall refer to the Internal Revenue Code amended to the date of such Trustor's death. (balance of page left blank intentionally) The TI11'•ODORE J KALLUS and MAKY f- KA(t tjS RevOcablc Living Trust --Page 34 SPECIAL DIRECTIVES OF THEO.DOIZE J. KALLUS I, 'THEODORE J. KALLUS, a resident of tile County of WILLIAMSON, State of TEXAS, being of lawful age, and of sound and disposing mind and memory, and not acting under duress, fraud, 61• undue influence, hereby make, publish and declare this to be my Special Directive, and I incorporate this into THE THE"10DORE J. KALLUS AND MARY I , KALLUS REVOCABLE' LIVING TRUSTAGREEMEN"T". I+ IItST I di rest that all estate and inheritance taxes ,payable as a result of my death, not linlited to taxes assessed on, shall be paid out of the residue of my Estate, anc:l shall not be deducted or collected from any Legatee, Devisee or Beneficiary hereunder. SECOND In the event any of my named Beneficiaries should predecease: me, all of that person's share of the, Trust Estate is to be left to be equally divided among that 17crsoia's issue pet stirpes. THIRD I direct that the personal property described in the following Exhibit "B" to this 'n-II TIIEODORE J. KALLUS AND MARS' E, KALLUS REVOCABLE LIVING "rRus'r AGREEMENT" shall be distributed at the time and to the beneficiaries as indicated therein. WURTH 1 hereby direct that al i of my right, title, interest, along with possession thereof, in and to the items of property identified on Ex i it B, which is attached hereto and incorporated herein by reference for all purposes, be distributed to the person(s) indicated therein at the time also indicated therein. (balance of page left blank inter lonally) The 'l'Uh- I 01U. ] Ai t US and MARY C KALLUS Rev2cable l.ivine'll��ist--Pi�ge 35 SPECIAL DIRECTIVES OF MARY E. KALLUS I, MARY Ii;. KALLUS, a resident of the County of WILLIAMSON, State of TEXAS, being of lawful age, and of`sound and disposing mind and memory, and not acting Under duress, fraud, or undue influence, hereby make, publisli cind declare this to be my Special Directive, and I incori)orme this into 'T 14E, THEODORE J. KALU JS AND MARY 1", KALIAJS" REVOCABLE LIVING 'I,RUST AGREEMENT, FIRST I direct that all estate and inheritance taxes payable as a result of my death, not limited to taxes assessed on property, shall be paid out of the residue of'my Estate, and shall not be deducted or collected from any Legatee, Devisee or Beneficiary hereunder, SECOND In the event any of my named Beneficiaries should predecease me, all of that person's share of the "Trust Estate is to 'be left to be equally divided among that person's issue per stirpes. THIRI) I direct that the personal property described in the following Exhibit "13" to this'T'HE THEODORT: J. KALLUS AND MARY 11 KALLUS REVOCABLE LIVING TRUST AGREE MT: N'T shall be distributed at the time and to the beneficiaries as indk4lted therein. FOURTH I hercby,dircct that all of my right, title, interest, along with possession thereof, in and to the items of properly identified on Xlli i B, which is attached hereto and incorporated herein by reference for all purposes, be distributed to the persons) indicated therein at the tine also indicated therein. (balance ofpage left blank intentionally) I li�L. HT�ODORE, J KALLUS and MARY 1'� KAI LUS Revocuble Livingru:,Y--1'K�ge 36 DATED to be effective this _ day of TRUSTORS: THLODOR J. KAI_,LUS MA.RY f.:KAL LUS ACCEPTED BY CO -TRUSTEES: ___. 0--0; 'I'b '1' EO O J. KA LUS MAI��' P L.L US STATE OF TEXAS § COUNTY OF WILLIAMSON § This instrument was acknowledged before one on the elate herein set forth by ITJEODOR J. KALLUS as'I"rustor and Co -Trustee to certify which witness rn ittnd all d seal of office. , i STATE OFTEXAS EXAS § COUNTY OF WI LLIAMISON § 01, 1 exas MARLIN BRANILIiY ^y Notary Public„ St[itt� Ot Texas My (,umrnission Expire >%J,P;LP� December 23, 2007 This instrument was acknowledged before me on the date herein set forth E. KALLUS as Trustor and Co -Trustee to certify which wigiep my hand aroset r� f MARLIN DPW r�r:r �r1 Notary Public. Slat( 01 'I'Bxia5 My Commission ExpirFts December 23, 2007 Th ^ T� 11I-MORE J. - S i nd MARY C:. KAI.I_US Revocable l.ivine'Cru�t--Page 37