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HomeMy WebLinkAboutRES 072826-5.C - ETJ Disannexation - Carlton - 129.858 AcresRESOLUTION NO. 6 rZ23260 -%!% V A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS ("GEORGETOWN") RELEASING APPROXIMATELY 129.858 ACRES OF LAND FROM THE CITY OF GEORGETOWN'S EXTRATERRITORIAL JURISDICTION ("ETJ"), SAID LAND IDENTIFIED BY THE WILLIAMSON COUNTY APPRAISAL DISTRICT AS PARCELS R040585 AND R550285, AND BEING LOCALLY KNOWN AS 1620 COUNTY ROAD 106, GEORGETOWN, WILLIAMSON COUNTY, TEXAS, RESULTING IN A REDUCTION OF GEORGETOWN'S ETJ; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, on July 20, 2026, the City of Georgetown, Texas, received a petition requesting release from its ETJ of an approximately 129.858 acre tract of land in the Woodruff Stubblefield 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. Q [ v� 202,E - J` . Page d Release of Petition Area — Carlton PASSED AND APPROVED by the City Council of the City of Georgetown, Texas, on the 1 j day of , 2026.X CITY OF JGEQRGETOWN, TEXAS Oder; Mayor �0-re,M V(�s t ATTEST: By: l Robyn Densmo City Secretary APPROVED AS TO FORM: By: Skye Masso ,�iA orney q/ Resolution No. 0728„ 5 C Page 12 Release of Petition Area — Carlton Exhibit A to Resolution Petition Resolution No. 0 ! 2BZ& -5,C Release of Petition Area ilih L1 7.026 -- �; PETITION FOR RELEASE OF AREA FROM THE EXTRATERRITORIAL JURISDICTION 6 THE STATE OF TEXAS COUNTY OF WILLIAMSON TO THE HONORABLE MAYOR AND CITY COUNCIL OF THE CITY OF GEORGETOWN, TEXAS: The undersigned (hereinafter called "Petitioner"), being the owner of a majority in value of lands situated within the area hereinafter described, which represents a total value of more than 50% of the value of all such area as indicated by the tax rolls of the Georgetown Central Appraisal District, acting pursuant to Section 42.102 of the Texas Local Govermnent Code, as amended, hereby respectfully petitions the City of Georgetown, Texas (hereinafter called the "City"), for the removal of the area described in Exhibit A and depicted in Exhibit A-1 herein (the "Property") from the extraterritorial jurisdiction (the "ETJ") of the City. In support of this Petition, Petitioner would respectfully show: I. Petitioner has authority, pursuant to Section 42.102(b), Texas Local Government Code, to file this Petition as the owner of the majority in value of an area of land in the City's ETJ. II. This Petition is signed by a majority in value of the holders of title of land in the area described by this Petition, as indicated by the tax rolls of the Williamson Central Appraisal District and evidenced by proof attached as Exhibit B. This Petition has satisfied the signature requirements described by Sections 42.103 and 42.104(a), Texas Local Government Code, and Chapter 277, Election Code, not later than the 180t" day after the date the first signature for the Petition is obtained. IV. The signature collected for this Petition is in writing, pursuant to Section 42.104(c), Texas Local Government Code. V. The Property is located in Williamson County, Texas, and is comprised of tax parcels R040585 and R550285, and totals approximately 129.858 acres, all of which is located within the extraterritorial jurisdiction of the City and, to the best of the Petitioner's knowledge, is not subject to any of the exceptions from applicability described in Section 42.101, Texas Local Government Code. VI. This Petition shall be verified by the City Secretary of the City or other person at the City responsible for verifying signatures. VIl. The City must notify the residents and landowners of the Property of the results of the Petition, which notification requirement may be satisfied by notifying the Petitioner in writing. VIIl. Because this Petition contains the number of signatures required by Section 42.104, Texas Local Government Code, to release the Property from the City's ETJ, the City shall immediately release the Property from its ETJ, pursuant to Section 42.105(c), Texas Local Government Code. Should the City fail to take action to release the Property by the later of (i) 45 days after the date the City receives this Petition or (ii) the next meeting of the City's governing body that occurs after the 30th day after the date the City's receives this Petition, the Property shall be released from the ETJ by operation of law, pursuant to Section 42.105(d), Texas Local Government Code. WHEREFORE, PREMISES CONSIDERED, Petitioner prays that: (a) this Petition be filed with the City Secretary of the City of Georgetown, Texas, and that, thereafter, the Property be removed from the ETJ of the City, in the manner provided by law, including Sections 42.102-105, Texas Local Govermnent Code, as amended; (b) that this Petition be granted, and that it and the City's action thereon be filed of record and be recorded in the Office of the City Secretary of Georgetown, Texas; and (c) that Petitioner have such other order and relief to which they may show themselves entitled. [Remainder of Page Intentionally Blank] RESPECTFULLY SUBMITTED PETITIONERS OWNER OF PARCEL ID NO. R040585 Kathryn J. Carlton Trustee of the Kathryn J. Carlton Revocable Living Trust STATE OF TEXAS COUNTY OF WILLIAMSON This instrument was acknowledged before me on e4 2026, by KATHRYN J. CARLTON TRUSTEE OF THE KATHRYN J. CARLT04 RE OCABLE LIVING TRUST. IRIS CASTRO Public, State of Texas Comm. Expires 03-27-2027 Notary ID 126009102 OWNER OF PARCEL ID NO. R550285 K thryn J. Carltoi , IndiviWially STATE OF TEXAS COUNTY OF WILLIAMSON Dd 6: / This instrument was acknowledged before me on 2026, by KATHRYN J. IRIS CASTRO Notary Public, State of Texas ' 44mm. Expires 03-27-2027 Notary ID 126009102 OWN O P RCEL ID NO. R550285 `�o Nathan J. Carlton STATE OF TEXAS COUNTY OF WILLIAMSON This instrument was acknowledged before me on q 2026, by NATHAN J. CARLTON. IRIS CASTRO ?:°,•' _ Notary Public, State of Texas Comm Expires 03-27-2027 11 Notary ID 126009102 c_.e. tqoC�r.�ss; C� Co��16yt,o j X EXHIBIT "A" LEGAL DESCRIPTION OF AREA TO BE REMOVED FROM THE EXTRATERRITORIAL JURISDICTION EXHIBIT "B" PROOF OF OWNERSHIP OF AREA TO BE REMOVED FROM THE EXTRATERRITORIAL JURISDICTION (Please See Attached] IE� � V,®b�� (t A,) FIELD NOTES JOB NO. 15624-00 DATE: 10-14-16 PAGE 1 OF 3 2.50 ACRES Being 2.50 acres of land situated in Williamson County, Texas, out of the Woodruff Stubblefield Survey, Abstract No. 556, Williamson County, Texas, and being a portion of the property conveyed to Charles D. Phillips and Catherine Hawes, in a Warranty Deed With Vendor's Lien, dated May 31, 1996, as recorded under Document No. 9629132 of the Official Records, Williamson County, Texas, and further described by metes and bounds as follows: BEGINNING: at a ''/2" iron rod w/ cap stamped "TLS, Inc.", set in the west line of County Road 106, and the east line of said Phillips/Hawes tract, for the southeast corner of this parcel, from which a '/2" iron rod w/ cap stamped "TLS, Inc.", found in the west line of Lot 1 of the R.D. Reynolds Subdivision, as recorded under Document No. 2007010357 of the Official Public Records, Williamson County, Texas, for the northeast corner of a called 17.3157 acres, conveyed to Scott M. Williams, in a Special Warranty Deed With Encumbrance For Owelty Of Partition, dated July 18, 2012, as recorded under Document No. 2012084119 of said Official Public, Records, and the southeast corner of said Phillips/Hawes tract, bears S 22011'55" E. 873.78 feet. THENCE: into, over and across said Phillips/Hawes tract the following 14 calls 1) S 33041'30" W, 35.42 feet to a Y2" iron rod wl cap stamped 'TLS, Inc.", set for an angle point in the south line of this parcel. 2) S 76-06-44" W, 85.05 feet to a Yz" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the south line of this parcel. 3) S 77-24-17" W, 118.10 feet to a 'Y2" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the south line of this parcel. 4) S 63009'55" W, 92,48 feet to a '/z" iron rod wl cap stamped "TLS, Inc.", set for an angle point in the south line of this parcel. 5) S 22-11'55" E, 154.12 feet to a Yz" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the south line of this parcel. 6) S 67-48-05" W, 426.44 feet to a Y2" iron rod w/ cap stamped "TLS, Inc.", set for the southwest corner of this parcel, 7) N 22-11-55" W, 223.33 feet to a Yz" iron rod wl cap stamped "TLS, Inc.", set for the northwest corner of this parcel, 8) N 67-48-05" E, 426.44 feet to a Yz" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. 9) S 22°11'55" E. 29.08 feet to a Y2" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. 10) N 63°09'55" E, 94.23 feet to a Yz" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. 11) N 77-24-17" E, 122.64 feet to a Yz" iron rod wl cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. S:12015 PROJECTSI15624 STUBBLEFIELD W SURVEY CR 106 GEORGETOWN 134.605624 2.5 AC CUT OUT FIELD NOTES. odt - FIELD NOTES JOB NO. 15624-00 DATE: 10-14-16 PAGE 2OF3 12) N 76°06'44" E, 69.08 feet to a '/2" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. 13) N 22-11'55" W, 23.51 feet to a %" iron rod w/ cap stamped "TLS, Inc.", set for an angle point in the north line of this parcel. 14) N 67048'05" E, 38,91 feet to a %:" iron rod w/ cap stamped "TLS, Inc.", set in the west line of County Road 106, for the northeast corner of this parcel, from which a 4" cedar fence post found for the southeast corner of a called 757.57 acres, conveyed to Pamela G. Martin, Dennis L. Davidson and James A. Davidson, Jr., in a Executor's Distribution Deed, dated September 11, 2001, as recorded under Document No. 2001072772 of said Official Public Records, and the northeast corner of said Phillips/Hawes tract, bears N 22011'55" W. 774.99 feet. THENCE. S 22011'55" E, 45.47 feet along the west line of County Road 106, and the east line of said Phillips/Hawes tract, to the Point of Beginning. Bearings cited hereon based on Grid North Texas State Plane Coordinate System Central Zone (NAD83). This exhibit is for financing and/or homesteading purposes only and shall not be used in violation of any state, county, or municipal subdivision regulation, or land development code. Kenneth Louis Crider, R.P.L.S Texas Land Surveying, Inc. 3613 Williams Drive, Suite 903 Georgetown, Texas 78628 if—/j/'-"/f No. 5624 f� ayes a,a ae.n3szaraaa.a.. a" IT METH I + I11S C`MDER :o :0 �� �� ` • �j �_ fiS , ,7exas Zand SitmeDing, ne., 3613 Williams Drive, Suite 903 — Georgetown, Texas 78628 (512) 930-'1600 wvvw.texas-Is.com TBPLS FIRM No. 10056200 S:12015 PROJECTSI15624 STUBBLEFIELD W SURVEY CR 106 GEORGETOWN 134.6115624 2.5 AC CUT OUT FIELD NOTES.odt — F r LED ANU RECORDED OFFICIAL PUBLIC RECORDS 2016098463 DEED Fee: $33.00 10/19/2016 12:55 PM Lmueller s�%rep ,�hSitiS Nancy E. Rister, County Clerk Williamson County, Texas 201)$)6089829 DEED foEal awy es: Z SPECIAL WARRANTY DEED Date: September 15, 2016 Grantor: Raymond Howard Harshbarger Grantor's Mailing Address (including county): 385 Waterloo Road Whitehall, Montana 59759 Madison County Grantee: Kathryn J. Carlton as Trustee of the Kathryn J. Carlton Revocable Living Trust Grantee's :Mailing Address (including county): 323 Bastian Lane Georgetown, Texas 78626 Williamson County Consideration: TEN AND 00/100 DOLLARS ($10.00) and other good and valuable consideration. Property (including any improvements): 134.52 acres of land, more or less, out of the Woodruff Stubblefied Survey, Abstract No. 556, and being the same property conveyed to JH Associates, L.L.C. in a Warranty Deed dated March 31, 2016, as recorded on April 1, 2016 under Document No. 2016027127 of the Official Records, Williamson County, Texas. Reser- 'ations from and Exceptions to Conveyance and Warranty: This deed is subject to all easements, restrictions, conditions, covenants, and other instruments of record. Grantor, for the consideration and subject to the reservations from and exceptions to conveyance and warranty, grant, sell, and convey to Grantee the property, together with all and singular the rights and appurtenances thereto in any wise belonging, to have and hold it to Grantee, Grantee's heirs, executors, administrators, successors, or assigns forever. Grantor binds Grantor and Grantor's heirs, executors, administrators, and successors to warrant and forever defend all and singular the property to Grantee and Grantee's heirs, executors, administrators, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the reservations from and exceptions to conveyance and warranty, when the claim is by, through, or under Grantor but not otherwise. When the context requires, singular nouns and pronouns include the plural. Grantee assumes all ad valorem taxes due on the property for the current year. STATE OF MONTANA COUNTY OF MADISON ACKNOWLEDGMENT § This instrument was acknowledged before me on September 2016 by Raymond Howard Harshbarger. GANEL G GIVEN NaT+�htI% NOTARY PUBLIC for the ��41 J�j ? *; SBAL :* State of Montana • Residing at Silver Star, Montana Notary Public for the State of Montana My Commission10, ?.0?9 Expires January t0Printed Name: Ganel G. Given AFTER RECORDING RETURN TO r._ Elizabeth McFarland 4500 Williams Drive Suite 212-183 Georgetown, Texas 78633 Tel: (512) 931-9243 Fax: (281) 925-0592 FILED AND RECORDED Oi=FIC.fAl_ PtiBt..TC' RE'C%rK)S 20t6089829 GEED Fee: $25.00 09/26/2016 11. 6 AM Mbar -nick Wa ! t i.amsei� COLJr?s i . Tres 4UIUV�J040J uttu tonal pages' S -3c SPECIAL WARRANTY DEED Date: o 2016 Grantor: Kathryn J. Carlton as Trustee of the Kathryn J. Carlton Revocable Living Trust Grantor's Mailing Address (including county): 323 Bastian Lane Georgetown, Texas 78626 Williamson County Grantees: Nathan J. Carlton and Kathryn J. Carlton, a married couple Grantees' klailing Address (including counl� ): 323 Bastian Lane Georgetown, Texas 78626 Williamson County Consideration: TEN AND 00/100 DOLLARS ($10.00) and other good and valuable consideration. Property (including any improvements)- 2.50 acres of land situated in Williamson County, Texas, out of the Woodruff Stubblefield Survey, Abstract No. 556, Williamson County, Texas, and being a portion of the property conveyed to Charles D. Phillips and Catherine Hawes, in a Warranty Deed with Vendor's Lien, dated May 31, 1996, as recorded under Document No. 9629132 of the Official Records, Williamson County, Texas, and being more fully described by metes and bounds in Exhibit "A" attached hereto and made a part hereof. Reservations from and Exceptions to Conveyance and Warranty: This deed is subject to all easements, restrictions, conditions, covenants, and other instruments of record. Grantor, for the consideration and subject to the reservations from and exceptions to conveyance and warranty, grant, sell, and convey to Grantees the property, together with all and singular the rights and appurtenances thereto in any wise belonging, to have and hold it to Grantees, Grantees' heirs, executors, administrators, successors, or assigns forever. Grantor binds Grantor and Grantor's heirs, executors, administrators, and successors to warrant and forever defend all and singular the property to Grantees and Grantees' heirs, executors, administrators, successors, and assigns against every person whomsoever lawfully claiming or to claim the same or any part thereof, except as to the reservations from and exceptions to conveyance and warranty, when the claim is by, through, or under Grantor but not otherwise. When the context requires, singular nouns and pronouns include the plural. Grantees assumes all ad valorem taxes due on the property for the current year. at yn J. laar 114 A Trustee of the Kathryn J. Carlton Revocable Living Trust ACKNOWLEDGMENT STATE OF TEXAS § COUNTY OF WILLIAMSON § This instrument was acknowledged before me on®b �� 06 2016 by Kathryn J. Carlton, Trustee of the Kathryn J. Carlton Revocable Living Trust. ` .—i-. -14a mij, c 1 . 3" AFTER RECORDING RETURN TO: Elizabeth McFarland 4500 Williams Drive Suite 212-183 Georgetown, Texas 78633 Tel: (512) 931-9243 Fax: (281) 925-0592 Notary Pub r , State of Texas — �R;4611442R 513 �'R461445 / /R681446 444 00 MM37 ROZosos; t4O20536 roan,;n' R487837 R550285 r R040585 0487836 R346918 R61093 R346923 R346917 0 fa< m 0 m 1� 0 E� 100 O x � n Cr] C�2 Z g I g m Y R 4 1 r Y cl z U o 00 p q b m U tip6 g } %OPP L� �U W r ro 2� •N OI :: aja N J 06� �mo c W 2 �Irn c N v -0 / W G, \ l ryULd 13, y. �', 1` 3$ gS 11 1 I I I I \ • � d a x a aMj rN u nv 694'20 \�{oayym c �rc t+fO v r \N OOr� O R V/y/ a S �X� •� W , Oi a0r��07 ���Wq C�2 ti O orcramw x a m v N OO N� OO LO LO Z O _ � 2 � a V) 0 QQ U o�N 6 x 2 m of WLI w a�S ffFF11 m�� �x V)} EIiW0 o a M U- o 1. g Yid /za coZ I-) C to — m ZM 0;m 02F7 O Q ^ Q M CO q � O z p �^N M a m CQ �C O z ' GPP �CPESg` 1 �UGo 00µ j82 N ,•�/gyp .l��fg �J y N N z136� CA 9x�^ \ 5 • -\ t0�I OV N m 4 d0y tg0 '�O \ MO P `S 1 IS _6 Ri s NO mSr tti fix@ gi F� JH3JP aS� g / a I STATE OF TEXAS § COUNTY OF WILLIAMSON § THIS TRUST AGREEMENT is entered into on September 1, 2016, between KATHRYN J. CARLTON, of Williamson County, Texas, as grantor (the "Grantor") and as initial trustee (the "Trustee") WITNESSETH: The Grantor desires to create a trust to be held, administered and distributed in accordance with the provisions of this Trust Agreement. Accordingly, the Grantor has transferred to the Trustee, and the Trustee acknowledges receipt from the Grantor of properties listed on the attached Schedule "A." These properties, together with any other property which may hereafter be conveyed to the Trustee subject to the trust hereby created, shall be held, administered and distributed by the Trustee, upon the trust and for the purposes and uses herein set forth. The trust initially created by this Trust Agreement shall be known as the "KATHRYN J. CARLTON REVOCABLE LIVING TRUST." ARTICLE I - IDENTIFICATION A. Children. The Grantor has two children, EVELYN JJJNE CARLTON and EVERETT JAMES CARLTON. All references in this Trust Agreement to the "Grantor's children" are to them and to all children hereafter born to or adopted by the Grantor. In addition, all references in this Trust Agreement to the "Grantor's descendants" are to the Grantor's children (as defined above) and to all of their respective descendants. B. Husband. The Grantor is married to NATHAN J. CARLTON. ARTICLE II - INITIAL REVOCABLE TRUST A. Distributions. The Trustee shall hold, manage, sell, exchange, invest and reinvest the trust property, collect all income and, after deducting such expenses as are properly payable, shall accumulate and distribute the income and principal as herein provided. The Trustee shall distribute the income and principal of the trust to the Grantor in such amounts as the Grantor may direct. All undistributed trust income shall be accumulated and invested. If the Grantor 1 becomes incapacitated, the Trustee shall distribute such amounts of the income and principal of the trust for the comfort, health, support, maintenance or other needs of the Grantor as the Trustee shall determine, in the Trustee's discretion, to be necessary or appropriate to maintain the Grantor in accordance with the Grantor's accustomed standard of living at the time of the execution of this Trust Agreement. B. Additions Following Death of Grantor. Following the death of the Grantor, the Trustee shall add to the trust created by this Article all property which was owned by the Grantor and which is received by the Trustee under the Grantor's Will and all non -probate assets (which shall include, but not be limited to, any payments from an employee or self-employed benefit plan, individual retirement account or annuity or any proceeds of any insurance policy on the life of the Grantor) which are payable to the Trustee hereunder. C. Gifts of Personal Property. Following the death of the Grantor, the Trustee shall distribute, free of trust, all of the Grantor's motor vehicles, boats and personal watercraft, household goods, appliances, furniture and furnishings, pictures, silverware, china, glass, books, clothing, jewelry or other articles of personal use or ornament, and other personal property of a nature, use or classification similar to the foregoing to the Grantor's descendants who survive the Grantor per stu-pes, with particular items to be allocated as they may agree, or if they cannot agree, as the Trustee shall decide. If any beneficiary hereunder is a minor, the Trustee may distribute such minor's share to such minor or for such minor's use to any person with whom such minor is residing or who has the care or control of such minor without further responsibility, and the receipt of the person to whom such minor's share is distributed shall be a complete discharge of the Trustee. The cost of packing and shipping such property to any such beneficiary shall be charged against this trust as an administration expense. D. Distribution Following Death of Grantor. Following the death of the Grantor and the additions in Article II, Section B, the Trustee shall make the following distribution: All of the Grantor's interest in the real property and the improvements thereto which constitute the Grantor's residential homestead at the time of the Grantor's death shall be distributed to Grantor's husband NATHAN J. CARLTON for the term of his life, subject to the terms contained in this paragraph. Presently such property is located at 1620 County Road 106, Georgetown, Texas 78626. If NATHAN J. CARLTON fails to survive the Grantor, or if Grantor is not man-ied to NATHAN J. CARLTON at the time of her death, this distribution shall lapse. NATHAN J. CARLTON shall be entitled to full possession of the property without requirement of bond or other security. NATHAN J. CARLTON shall maintain such property in good condition and shall pay for all assessments, insurance, taxes, and ordinary repairs. NATHAN J. CARLTON shall not be required to pay for damage to or depreciation of such property, unless it is caused by his act or L.% 2 omission. NATHAN J. CARLTON shall not be permitted to apply for and obtain an over age 65 homestead tax deferral which would otherwise allow him to defer property taxes on such property. NATHAN J. CARLTON, in his reasonable discretion, may lease such property upon reasonable terms and conditions for a period not to exceed his life with such lease payments being paid directly to NATHAN J. CARLTON. Also, NATHAN J. CARLTON may sell such property or any portion thereof upon reasonable terms and conditions, at a reasonable price, and upon terms of credit as NATHAN J. CARLTON deems advisable, and NATHAN J. CARLTON's deed alone shall be sufficient to convey title to such property. All or a portion of the proceeds fiom any such sale may be invested in another residence subject to this grant of a life estate, with any such proceeds not so utilized being distributed in the same manner as the property of this trust would have been distributed had the Grantor died on the date such residence was sold. Upon the death of NATHAN J. CARLTON, the property which remains subject to this life estate shall be distributed in the same manner as the property of this trust would have been distributed had the Grantor died on the same day as NATHAN J. CARLTON with NATHAN J. CARLTON being treated for such purposes as having failed to survive the Grantor. If the Grantor does not own an interest in a residential homestead at the time of the Grantor's death, then the provisions of this Section shall be disregarded. E. Pavment of Taxes. Following the death of the Grantor, the Trustee shall pay from the remaining property of this trust the difference between all taxes which must be paid by reason of the Grantor's death and those taxes which would be payable by reason of the Grantor's death had the property of this trust not been includable in the gross estate of the Grantor for the purpose of calculating such taxes; provided, however, no such taxes shall be apportioned or charged to the property passing under Article II, Section C or Article II, Section D. Except as otherwise specifically provided herein, any taxes caused by the inclusion in the Grantor's estate of property not passing under this Trust Agreement or under the Grantor's Will shall be apportioned and paid in accordance with Sections 124.001 through 124.018 of the Texas Estates Code (or any successor statute), and in such case, Federal law shall control if Texas law and Federal laws conflict or if Texas law fails to address an apportionment or tax payment issue. This Section shall not apply to any generation skipping transfer taxes imposed by Section 2601 of the Code, which taxes shall instead be payable in accordance with the provisions of Section 2603 of the Code. F. Payment of Expenses. The Trustee, in the Trustee's discretion, may pay from the trust property all or any part of the Grantor's funeral expenses, claims which are legally enforceable against the Grantor's estate and reasonable expenses of administration of the Grantor's estate, but the Trustee shall not make any such payments that are not in the best 3 interests of any person having a beneficial interest in the remaining property of this ti List upon termination. The Trustee may make such payments directly or may pay over the amounts thereof to the duly qualified executor, personal representative, or administrator of the Grantor's estate. Written statements by the executor, personal representative, or administrator of the Grantor's estate of the sums that may be paid under this Section shall be sufficient evidence of their amounts, and the Trustee shall be tinder no duty to confirm that such payments were applied properly. G. Termination. The trust created by this Article shall terminate upon the death of the Grantor. Upon termination, the Trustee shall distribute all of the remaining trust property to the Grantor's descendants who survive the Grantor per stitpes, subject to the provisions of Article III in the case of a descendant who has not attained age 30. If none of the Grantor's descendants survives the Grantor, all of the remaining trust property shall be distributed to the Grantor's heirs. ARTICLE III - DESCENDANTS' TRUSTS A. Applicability. If any property is to be distributed to an individual subject to the provisions of this Article, the Trustee shall not distribute such property outright, but instead the Trustee shall hold all of such property as a separate trust for the benefit of such individual, and the records of the Trustee shall be kept accordingly. Each trust created by this Article shall be known by the name of the individual for whom it is created (hereafter called "Beneficiary" of such trust), which individual shall be the primary beneficiary thereof. B. Distributions. With regard to each trust created by this Article, the Trustee shall distribute to the Beneficiary of such trust such amounts of the income and principal of such trust as are necessary, when added to the funds reasonably available to such Beneficiary from all other sources known to the Trustee, to provide for such Beneficiary's health, support, maintenance and education, taking into consideration the age, education and station in life of such Beneficiary. In addition, the Trustee, in the Trustee's discretion, may distribute to any one or more descendants of the Beneficiary of a trust created by this Article such amounts of the income and principal of such trust as are necessary, when added to the funds reasonably available to such Beneficiary's descendants from all other sources known to the Trustee, to provide for their health, support, maintenance and education, taking into consideration the age, education and station in life of such Beneficiary's descendants. The primary purpose of each of the trusts created by this Article is to provide for the Beneficiary of such trust and not to provide for distributions to the descendants of such Beneficiary or to accumulate funds for any other remainder beneficiaries. Accordingly, the Trustee shall always consider the needs of the Beneficiary of a trust ahead of 9 the needs of any other beneficiary under this Trust Agreement. The Trustee shall make distributions to the Beneficiary of each trust in accordance with the aforementioned distribution standards even if doing so exhausts the principal of such Beneficiary's trust created under this Article. The Grantor desires that each of the Beneficiaries and the descendants of such Beneficiaries be afforded the opportunity to obtain as complete an education, including attendance at graduate, professional and special trade schools, as they may reasonably desire and be qualified to obtain; however, any such distributions for the education of the descendants of a Beneficiary shall be made only after the needs of the Beneficiary have been satisfied according to the aforementioned distribution standards. C. Termination. Each trust created by this Article shall terminate when the Beneficiary thereof attains age 30 or dies, whichever event occurs earlier; provided, however, if such Beneficiary has already attained age 30 on the date such Beneficiary's trust is to be funded, then the property that would have been held in trust shall instead be distributed outright to such Beneficiary. Upon the termination of a trust created by this Article, all of the remaining property of such trust shall be distributed to the Beneficiary thereof or, if such Beneficiary's death is the event that terminates such trust, such property shall be distributed to such Beneficiary's then living descendants per stripes, or if no descendant of such Beneficiary is then living, such property shall be distributed per stirpes to the then living descendants of the nearest lineal ancestor of such deceased Beneficiary who is also a descendant of the Grantor and who has descendants then living, or if no such descendant is then living, such property shall be distributed to the Grantor's descendants who are then living per stirpes; provided, however, if none of the Grantor's descendants is then living, all of such remaining property of such trust shall be distributed to the Grantor's heirs. Any distribution which is made to an individual who is one of the Grantor's descendants upon the termination of a trust created by this Article shall be distributed outright if such individual has attained age 30 or, if such individual has not attained that age, shall be held by the Trustee in a separate trust for the benefit of individual (who will be the "Beneficiary" of such trust) to be administered as provided in this Article; provided, however, any such distribution to an individual who is the Beneficiary of a trust then being held under the provisions of this Article shall not be made outright but instead shall be added to the principal and administered as a part of such Beneficiary's trust. ARTICLE IV - TRUSTEE APPOINTMENTS A. Successor Trustee. if KATHRYN J. CARLTON dies, resigns, becomes incapacitated, or otherwise ceases to serve as Trustee of a trust created under this Trust 5 Agreement, then the Grantor's husband, NATHAN J. CARL,TON, shall become Trustee of such trust. B. Removal of Trustee by Grantor. The Grantor may at any time remove the Trustee of the trust created under Article II, with or without cause, and shall appoint a successor Trustee. The Grantor may appoint a successor corporate Trustee, or the Grantor may appoint any other individual or individuals as successor Trustee or Co -Trustee. If the Grantor is not serving as Trustee, the Grantor may elect at any time to be the sole Trustee or a Co -Trustee by notice to the Trustee. C. Election. Each Beneficiary of a trust who is one of the Grantor's children may elect at any time after the death of the Grantor to be a Co -Trustee or the sole Trustee of such Beneficiary's trust; provided that if a Beneficiary, after having elected to be the sole Trustee, dies, resigns, becomes incapacitated or otherwise ceases to act and such Beneficiary fails to appoint a successor Trustee for such Beneficiary's trust within 30 days thereafter, the last Trustee to serve prior to such Beneficiary shall become the Trustee of such trust. D. Removal Powers. Each Beneficiary of a trust who is one of the Grantor's children may at any time after the death of the Grantor remove any Trustee of such Beneficiary's trust, with or without cause, and may appoint a successor individual or corporate Trustee or a series of successor individual or corporate Trustees or Co -Trustees. E. Appointment of Successor Trustee. After the death of the Grantor, any then - serving Trustee of a trust created hereunder may by written instrument appoint a successor individual or corporate Trustee, or a series of successor individual or corporate Trustees, to serve if such Trustee dies, resigns, becomes incapacitated, or otherwise ceases to serve as Trustee of such trust, by an acknowledged instrument, a copy of which shall be delivered to the primary beneficiary of such trust. If more than one Trustee is serving at such time, then all such Trustees must make the appointment unanimously. If a Trustee appoints one or more successor Trustees, then such appointment shall supersede the successor Trustee provisions contained herein, except that if the successors named in such written instrument all fail to qualify, die, resign, become incapacitated, or otherwise cease to serve, the successor Trustee provisions contained herein shall apply. No restrictions may be added to such an instrument which would limit any person fiom exercising a right or power regarding a trusteeship which is otherwise granted to such person in this Article. Notwithstanding the foregoing provisions of this Section, the power to appoint one or more successor Trustees shall not be exercisable if a corporate Trustee is serving as the sole Trustee or as a Co -Trustee of such trust. F. Resignation of "Trustee. Any Trustee may resign by giving notice to the Grantor, while the Grantor is living, and thereafter to the beneficiaries of such trust. If the trusteeship of any trust created by this Trust Agreement becomes vacant for any reason during the Grantor's lifetime, the power to appoint a successor shall be exercisable by the Grantor for a period of 60 days; provided, however, if the Grantor fails to appoint a successor within such 60 day period, and if no successor Trustee has been appointed pursuant to the terms of any other Section of this Article, the power to appoint a successor shall be exercisable by the Grantor's children (acting by majority, or by the survivor acting alone) for an additional 30 days. After the death of the Grantor, if no successor Trustee has been appointed pursuant to the terms of any other Section of this Article, the power to appoint a successor Trustee shall be exercisable by the Beneficiary of such trust for a period of 90 days. If no successor Trustee has been appointed within 90 days of such vacancy or such notice of resignation, then upon written request of any interested party, any judge of Williamson County, Texas, acting as an individual and not in any judicial capacity, shall have the power to appoint a successor Trustee. G. Expenses and Compensation. Every Trustee shall be reimbursed for the reasonable costs and expenses incurred in connection with such Trustee's duties. Every Trustee, except the Grantor, shall be entitled to fair and reasonable compensation for services rendered by such Trustee in an amount not exceeding the customary and prevailing charges for services of a similar character at the time and place such services are performed. H. Waiver of Bond; Ancillary Trustees, No Trustee acting hereunder shall be required to give bond or other security in any jurisdiction. If any trust created by this Trust Agreement contains property located in another state or a foreign jurisdiction, and the Trustee cannot or chooses not to serve under the laws of such state or foreign jurisdiction, the power to appoint an ancillary Trustee for such property (as well as any successor ancillary Trustee) shall be exercisable by the Grantor, or by the Trustee if the Grantor is not living or is not competent to act. An ancillary Trustee appointed pursuant to this Section may be an individual or corporate Trustee. 1. "Trustee" Defined. Unless another meaning is clearly indicated or required by context or circumstances, the term "Trustee" shall mean and include the initial Trustee and any successor Trustee or Co -Trustees. Except as otherwise specifically provided in this Trust Agreement, if Co -Trustees are designated to serve hereunder or if Co -Trustees are already serving, and one such Co -Trustee declines to serve, fails to qualify, dies, resigns, becomes incapacitated, or otherwise ceases to serve for any reason, then the remaining Trustee or Co - Trustees, as the case may be, shall serve or continue to serve in such capacity. J. Actions by Co -Trustees. When multiple Trustees are serving, each such Trustee shall have the authority to act alone and independently of the other Trustees then serving, without the necessity of consultation with or approval of any other Co -Trustee or Co -Trustees. MN 7 Any writing signed by a Co -Trustee with the authority to act alone and independently shall be valid and effective for all purposes as if signed by all such Trustees. K. "_Corporate Trustee" Defined. The term "corporate Trustee" shall mean a bank having trust powers or a trust company having (alone or when combined with its parent organization and affiliate) capital and surplus in excess of $1,000,000 (U.S.), and the successor (by merger, consolidation, change of name or any other form of reorganization, or if such corporate Trustee ever transfers all of its existing business of serving as a fiduciary to any other bank or trust company or corporation) bank or trust company to any such corporate Trustee named herein or serving hereunder. If a bank or trust company is specifically named herein or was a corporate Trustee (as defined above) when it accepted its fiduciary position hereunder, it shall not cease to be considered a corporate Trustee because its capital and surplus presently is or later declines below the amount stated above. In any instance where a corporate Trustee is required to be appointed as a successor Trustee or Co -Trustee in connection with the removal of any Trustee or Co -Trustee, the instrument of removal shall contain the acceptance of the corporate Trustee so appointed evidenced on it. If a corporate Trustee is serving as a Co -Trustee, it shall have exclusive custody of the properties, books and records of the trust as to which it is serving, but shall make such properties, books and records available for inspection and copying by every other Trustee of such trust. ARTICLE V - ADMINISTRATIVE PROVISIONS A. Revocation By Grantor. The Grantor may alter, amend, modify, revoke or terminate any of the provisions of this Trust Agreement by notice to the Trustee. Upon the death of the Grantor, this Trust Agreement shall become irrevocable. D. Right To Use Principal Residence. The Grantor or the primary beneficiary of a trust created hereunder shall have the right to use and occupy real or personal property owned by any trust created under this Trust Agreement as the Grantor's or such primary beneficiary's principal residence rent free and without charge for life or until this Trust Agreement is revoked or terminated, whichever occurs first. Further, any such property (or any interest therein) shall be acquired by an instrument of title that describes the property with sufficient certainty to identify it and the interest acquired, and the instrument shall be recorded in the real property records of the county in which the property is located. This section shall be construed in accordance with the Grantor's intention that all eligible real or personal property which is owned by a trust created hereunder qualify for the homestead exemption and that the trust which owns such property is a "qualifying trust" as defined and described in Section 11.130) of the Texas Tax Code and, if .r .ci[WA 8 applicable, Section 41.0021 of the Texas Property Code. C. Combination of Trusts. After the death of the Grantor, the Trustee, in the Trustee's discretion, may combine any trust created under this Trust Agreement with any other trust or trusts if the terms of such trusts are substantially similar, if such trusts have the same primary beneficiaries, and if such trusts have the same inclusion ratio as defined in Section 2642(a) of the Code. The Trustee shall not be obligated to combine such trusts. If trusts which are combined are to terminate at different times, the combined trust shall terminate in stages, with a pro rata portion of the combined trust being distributed to the appropriate beneficiaries when each such trust terminates. If trusts which are combined are to terminate at the same time but have different contingent beneficiaries, the remaining property of the combined trust shall be divided pro rata among the contingent beneficiaries of each trust. Any such pro rats distributions shall be made in proportion to the value of each trust at the time such trusts were combined. D. Maximum Duration of Trusts. Notwithstanding anything to the contrary contained in this Trust Agreement, each trust created under this Trust Agreement, unless earlier terminated according to its terms, shall terminate one day less than 21 years after the date of death of the last to die of the Grantor and the following persons who are living on the Grantor's date of death: (i) the Grantor's descendants, and (ii) the descendants of the Grantor's parents; provided, however, that if the Trustee at any time combines and administers as one trust any trust or trusts created hereunder and any trust or trusts under any other instrument, such combined trust shall not continue beyond the date on which either of such trusts would, without regard to such combination, have been required to terminate under the rule against perpetuities or other applicable law governing the maximum duration of trusts. If any trust (including a combined trust) would, but for the terms of this Section, continue beyond such date, such trust shall nevertheless at that time terminate and the remaining property of such trust shall be distributed to the Beneficiary of such trust. E. General Power of Appointment. If, without regard to this Section, any part of a trust would be subject to the imposition of a generation skipping transfer tax upon the death of the Beneficiary thereof, then such Beneficiary shall have the general testamentary power to appoint all or any part of such Beneficiary's trust to the creditors of such Beneficiary's estate; provided that such general power shall not apply to more than the largest amount, if any, of such Beneficiary's trust where the marginal estate tax together with any state inheritance or estate tax (after taking into account all available credits) that would be attributable to the inclusion of such trust in the Beneficiary's gross estate would be less than the marginal generation skipping transfer tax (after taking into account all available credits) that would be attributable to such trust if taxed as a taxable termination. Such power shall be exercisable only by specific reference in 9 such Beneficiary's Will. If any estate, inheritance or other death taxes are payable by reason of such Beneficiary's death as a result of the inclusion of all or any portion of the unappointed property of such Beneficiary's trust in such Beneficiary's gross estate because of this general power of appointment, the Trustee of such trust shall pay to the executor, personal representative, or administrator of such Beneficiary's estate from the remaining unappointed property of such Beneficiary's trust the difference between the amount of such taxes that are payable and the amount of such taxes that would be payable if such Beneficiary did not possess this general power of appointment over any portion of his or her trust, unless such Beneficiary shall direct otherwise in his or her Will. F. Support Obligation. Notwithstanding anything to the contrary in this Trust Agreement, the Trustee, other than an Independent Trustee as defined in Section 674(c) of the Code, shall make no distributions of income or principal of any trust that would to any extent reduce or discharge a legal or contractual obligation of any person to support any other person. G. Allocation of GST Exemption. The Trustee, in the Trustee's discretion, may assist the executor, personal representative, or administrator of the estate of the Grantor in allocating any remaining portion of the Grantor's generation skipping tax exemption ("GST exemption") as defined in Section 2631 of the Code to any property as to which the Grantor is the transferor, including any property transferred by the Grantor during life as to which the Grantor did not make an allocation prior to the Grantor's death and/or among any generation skipping transfers (as defined in Section 2611 of the Code) resulting under this Trust Agreement and/or that may later occur with respect to any trust established Linder this Trust Agreement, and the Trustee shall never be liable to any person by reason of such allocation, if it is made in good faith and without gross negligence. The Trustee may, in the Trustee's discretion, set apart, to constitute two separate trusts, any property which would otherwise have been allocated to any trust created hereunder and which would have had an inclusion ratio, as defined in Section 2642(a) of the Code, of neither one nor zero so that one such trust has an inclusion ratio of one and the other such trust has an inclusion ratio of zero. ARTICLE VI -TRUSTEE PROVISIONS A. Powers. The Trustee shall have all of the powers and authorities conferred upon trustees by statute or common law in any jurisdiction in which the Trustee may act, including all powers and authorities conferred by the Texas Trust Code and by any future amendments thereto, except for any instance in which such powers and authorities may conflict with the express provisions of this Trust Agreement, in which case the express provisions of this Trust 10 Agreement shall control. In addition to such powers, the Trustee is specifically authorized: (1) To retain, in the discretion of the Trustee, any property transferred to the Trustee by the Grantor or any other person, including securities of any corporate Trustee, without regard to the duty to diversify investments under the laws governing a trust created hereunder and without liability for any depreciation or loss occasioned by such retention; (2) To exchange, sell or lease (including leases for terms exceeding the duration of all trusts created by this Trust Agreement) for cash, property or credit, or to partition, from time to time, publicly or privately, at such prices, on such terms, times and conditions and by instruments of such character and with such covenants as the Trustee may deem proper, all or any part of the assets of each trust, and no vendee or lessee of the Trustee shall be required to look to the application made by the Trustee of any funds paid to the Trustee; (3) To borrow money from any source (including any Trustee) and to mortgage, pledge or in any other manner encumber all or any part of the assets of any trust as may be advisable in the judgment of the Trustee for the advantageous administration of the trusts; (4) To invest and reinvest any part of the trust estates in any kind of property whatsoever, real or personal, whether or not productive of income and without regard to the proportion that such property or property of a similar character held may bear to the entire trust estate; provided, however, the Grantor may direct the Trustee as to the investments to be made by the Trustee, and the Trustee shall not be liable to any person for any losses resulting from following the written direction of the Grantor in investing the trust assets; (5) To employ attorneys, accountants, investment managers, specialists and such other agents as the Trustee shall deem necessary or desirable; to have the authority to appoint an investment manager or managers to manage all or any part of the assets of any trust, and to delegate to said manager investment discretion and such appointment shall include the power to acquire and dispose of such assets; and to charge the compensation of such attorneys, accountants, investment advisors, investment managers, specialists and other agents and any other expenses against such trust; (6) To register and carry any securities or other property in the name of the Trustee or in the name of the nominee of any corporate Trustee (or to hold any such property unregistered) without increasing or decreasing the fiduciary liability of the Trustee; to exercise any option, right or privilege to purchase or to convert bonds, notes, stocks (including shares or fractional shares of stock of any corporate Trustee), securities or other property, and to borrow money for the 11 purpose of exercising any such option, right or privilege; to vote any stock which may be held in the trusts; and if two or more Trustees are serving hereunder and no such Trustee is a corporate Trustee, to open any type of account in such a manner that all activities associated with such account may be handled by one of the Co -Trustees acting alone; (7) To enter into any transaction on behalf of any trust (including loans to beneficiaries for adequate security and adequate interest) despite the fact that another party to any such transaction may be (i) a trust of which any Trustee under this Trust Agreement is also a trustee; (ii) an estate of which any Trustee under this Trust Agreement is also an executor, personal representative, or administrator; (iii) a business or trust controlled by any Trustee under this Trust Agreement or of which any such Trustee, or any director, officer or employee of any such corporate Trustee, is also a director, officer or employee; or (iv) the Grantor, any other beneficiary or any Trustee under this Trust Agreement acting individually; (8) To make, in the Trustee's discretion, any distribution required or permitted to be made to any beneficiary under any trust established by this Trust Agreement, in any of the following ways when such beneficiary is a minor or is incapacitated: (i) to such beneficiary directly; (ii) to the guardian or conservator of such beneficiary's person or estate; (iii) by utilizing the same, directly and without the interposition of any guardian or conservator, for the health, support, maintenance, or education of such beneficiary; (iv) to a person or financial institution serving as custodian for such beneficiary under a uniform gifts to minors act or a uniform transfers to minors act of any state with the age of termination determined by the Trustee in a state which allows for delayed termination; (v) by reimbursing the person who is actually taking care of such beneficiary (even though such person is not the legal guardian or conservator) for expenditures made by such person for the benefit of such beneficiary; and (vi) by managing such distribution as a separate fund on the beneficiary's behalf, subject to the beneficiary's continuing right to withdraw the distribution; and the written receipts of the persons receiving such distributions shall be full and complete acquittances to the Trustee; (9) To purchase any of the property (including speculative investments) in the testamentary estate of the Grantor at its fair market value and to retain any property so acquired without liability for depreciation or loss occasioned by such purchase and retention; (10) To lend money to the testamentary estate of the Grantor upon adequate security and for adequate interest; (11) To invest the trust assets in any life insurance policy or policies =,& _ A OAJ 12 (including term insurance) on the life of one or more of the beneficiaries of the trusts, or on the life of any person or persons in whom one or more of the beneficiaries of the trusts have an insurable interest; (12) To store personal property given to a person who is a minor or who is incapacitated for later distribution to such person, or to sell such property and add the proceeds of sale to a trust of which such person is a beneficiary; (13) To allocate or transfer at any time all or any portion of the property of any trust established by this Trust Agreement as the Trustee, in the Trustee's discretion, deems advisable to the trustee of one or more other trusts (a "Recipient Trust") created by the Grantor, the Trustee, or any other person, as long as the following conditions are satisfied: (i) the Recipient Trust must exclusively benefit the same beneficiary or beneficiaries as the trust from which the property was allocated or transferred; (ii) all distributions from a Recipient Trust must be made with the same distribution standards provided in this Trust Agreement; (iii) the Recipient Trust must not include any power or provision that would constitute a general power of appointment held by the trustee within the meaning of Section 2041 of the Code (except for a general power, if any, already provided by this Trust Agreement); and (iv) if any such allocation or transfer made to a Recipient Trust violates the applicable rule against perpetuities, such Recipient Trust shall provide that with respect to such portion allocated or transferred, the perpetuities period shall be properly adjusted so that it is not violated. The Recipient Trust may be subject to and administered under the laws of a different jurisdiction than the laws which govern the trust created hereunder. In making any allocation or transfer of any portion of the property of a trust created hereunder, the Trustee may allocate or transfer the same in kind, including undivided interests therein, or in its discretion may allocate or transfer all or any part of such trust's property, and make such allocation or transfer in cash, or in kind, or partly in cash and partly in kind. The authority of the Trustee to exercise this power shall not be limited by any statute that would restrict the Trustee's authority absent the authorization herein conferred on the Trustee and, furthermore, the exercise of this power shall not require the consent of any beneficiary who may be potentially affected thereby, whether beneficially or adversely; (14) To make divisions, partitions, or distributions in money or in kind, or partly in each, whenever required or permitted to divide, partition, or distribute all or any part of any trust; and, in making any such divisions, partitions, or distributions, the judgment of the Trustee in the selection and valuation of the assets to be so divided, partitioned, or distributed shall be binding and conclusive, and the Trustee shall not be liable for any differing tax consequences to the beneficiaries of the trusts created hereunder; and, further, the Trustee shall be authorized to make distributions from the trusts created by this Trust Agreement on a non -pro rata basis, and in the case of non -pro rata distributions of principal 13 from a trust, no such distributions shall be charged against the share or shares of such trust ultimately allocated to any beneficiary or trust upon termination thereof; (15) To release, in the discretion of the Trustee, any fiduciary power at any time, in whole or in part, temporarily or permanently, whenever the Trustee may deem it advisable, by an instrument in writing executed and acknowledged by the Trustee; (16) To invest and reinvest all or part of the assets of any trust in any common trust fund of any corporate Trustee; (17) To continue any business (whether a proprietorship, corporation, partnership, limited partnership or other business entity) which may be transferred to any trust for such time as the Trustee may deem it to be in the best interest of the trusts; to employ in the conduct of any such business such capital out of any trust as the Trustee may deem proper; to borrow money for use in any such business alone or with other persons financially interested in such business, and to secure such loan or loans by a mortgage, pledge or any other manner of encumbrance of, not only the trusts' interest in such business, but also such portion of the trusts outside of such business as the Trustee may deem proper; to organize, either alone or jointly with others, new corporations, partnerships, limited partnerships or other business entities; and generally to exercise with respect to the continuance, management, sale or liquidation of any business which may be transferred to each of the trust estates, or of any new business or business interest, all the powers which may be necessary for its successful operation; (18) To transfer such sums of the property of the Grantor to an individual serving as agent or attorney -in -fact under a valid power of attorney signed by the Grantor (or to several individuals serving jointly as agents or attorneys -in -fact under a valid power of attorney signed by the Grantor) as such agent or agents may request in order to make gifts, which are specifically authorized by such power of attorney, on behalf of the Grantor, or alternatively, to . transfer such sums of the property of the Grantor directly to one or more persons or charities as directed by the Grantor's agent or attorney -in -fact under a valid power of attorney as long as such transfers are specifically authorized by such power of attorney; (19) To select and employ, at the discretion of the Trustee but at the expense of the trusts, any person, firm or corporation, engaged in rendering investment advisory services or investment management services, to furnish professional assistance or management in connection with making investments, managing securities, or making any other decisions with respect to the purchase, retention, sale or other disposition of property or securities belonging to the trusts; 14 (20) To employ a bank or trust company located anywhere within the United States, at the discretion of the Trustee but at the expense of the trusts, as custodian or agent; to have stock and securities registered in the name of such agent or custodian or a nominee thereof without designation of fiduciary capacity; and to appoint such bank or trust company to perform such other ministerial functions as the Trustee may direct. While such stock or securities are in the custody of any such bank or trust company, the Trustee shall be under no obligation to inspect or verify such stock or securities nor shall the Trustee be responsible for any loss by such bank or trust company; and (21) Whenever in this Trust Agreement an action is authorized in the discretion of the Trustee, the term "discretion" shall mean the reasonable discretion of the Trustee. B. Property, Books of Account and Records. All properties, books of account and records of each trust shall be made available for inspection at all times during normal business hours by the Grantor or by any person designated by the Grantor. Prior to the death of the Grantor, the Trustee shall provide an accounting to the Grantor, if requested by the Grantor. Furthermore, except as otherwise provided in this Section, within 60 days of receiving a written request from a beneficiary of a trust created hereunder, the Trustee shall furnish an accounting to such beneficiary. Any such accounting shall comply with the requirements of the Texas Trust Code and shall be deemed correct and binding one year after receipt by the requesting beneficiary. Notwithstanding the foregoing, with regard to each beneficiary of a trust (i) who is neither entitled nor permitted to receive current distributions from such trust and who would receive no distribution from such trust if it were to then terminate, or (ii) who is under 25 years of age, the Trustee shall be relieved of the duty to keep such beneficiary reasonably informed concerning the administration of such trust and the material facts necessary for such beneficiary to protect such beneficiary's interest. Further, the Trustee shall not be required to respond to a request for an accounting from a beneficiary described in subsection (i) above. C. Allocation of Principal and Income. The Trustee shall determine, in the Trustee's discretion, the allocation or apportionment of all receipts and disbursements between income and principal; provided, however, in exercising this discretion, the Trustee may consider the provisions of the Texas Uniform Principal and Income Act but shall not be bound by those provisions. D. Notice. Any notice required or permitted to be given by or to a person or a Trustee acting under this Trust Agreement must be given by acknowledged instrument actually delivered to the person or Trustee to whom it is required or permitted to be given. Any notice 15 required or permitted to be given to a minor shall be given to such minor's parent who is closest in relation to the Grantor, or if no such parent is able to receive such notice, to such minor's guardian. Any notice required or permitted to be given to an adult incapacitated person shall be given to such adult incapacitated person's guardian or conservator. If such notice concerns a trusteeship, it shall state its effective date and shall be given at least 30 days prior to such effective date, unless such period of notice is waived. Any action permitted to be taken by a minor shall be taken by such minor's parent who is closest in relation to the Grantor, or if no such parent is able to take such action, by such minor's guardian. Any action permitted to be taken by an adult incapacitated person shall be taken by such adult incapacitated person's guardian or conservator. E. Acts of Prior Trustees. Each Trustee shall be relieved of any duty to examine the acts of any prior Trustee and no court accounting shall be required. Each successor Trustee shall be responsible only for those properties which are actually delivered to such Trustee. Each successor Trustee, upon executing an acknowledged acceptance of the trusteeship and upon receipt of those properties actually delivered to such successor Trustee, shall be vested with all of the estates, titles, rights, powers, duties, immunities and discretions granted to the prior Trustee. F. Reliance on Legal Opinion. In acting or declining to act, each Trustee may rely upon the written opinion of a competent attorney, any facts stated in any instrument in writing and believed true, or any other evidence deemed sufficient. Each Trustee shall be saved harmless fiom any liability for any action taken, or for the failure to take any action, if done in good faith and without gross negligence. G. Administration As Single Trust. The Trustee shall keep a separate account for each of the separate trusts created under this Trust Agreement, but all of such trusts may be administered as a single fund. Joint investments or interests in investments may be assigned to such trusts, with each trust being credited with an undivided interest in all joint investments in the proportion which is assigned to it or in the proportion which its contribution to such investments bears to the whole. H. Undistributed Income, At the end of the accounting year of a trust where the income is not required to be distributed, any undistributed income shall be added to principal; provided, however, any distributions fiom a trust made pursuant to Section 663(b) of the Code shall be deemed to have been made on the last day of such trust's preceding accounting year. ARTICLE V11- OTHER MISCELLANEOUS TRUSTS Notwithstanding any provision in this Trust Agreement to the contrary, after the death of WA- 16 the Grantor, if any stock of an S corporation (as defined in Section 1361(a) of the Code) is to be distributed to the Trustee of any trust created under this Trust Agreement, the Trustee may, in the Trustee's discretion, elect to hold such stock as a qualified subchapter S trust (as defined in Section 1361(d)(3) of the Code) or as an electing small business trust (as defined in Section 1361(e) of the Code). If the Trustee elects to treat any such trust as an electing small business trust, the Trustee shall apportion to such trust a reasonable share of the unallocated expenses of all the trusts created under this Trust Agreement, as required by the Code and the related Treasury Regulations. The Trustee shall not be liable to any beneficiary if the election to treat a trust as an electing small business trust results in additional taxes or in the loss of income tax deductions or credits. If the Trustee elects to treat any such stock as a qualified subchapter S trust (referred to herein as an "S corporation trust"), then within the time period prescribed by Section 1361(c) of the Code, the Trustee shall instead hold such S corporation stock in a separate S corporation trust for the benefit of the primary beneficiary of the trust from which such stock is set aside. Each S corporation trust shall require that: (1) such primary beneficiary shall be sole beneficiary of the S corporation trust created for his or her benefit under this section, and no income or principal shall be distributed to any person other than the primary beneficiary; (2) all of the income of each S corporation trust shall be distributed to the primary beneficiary at least annually and, upon the death of the primary beneficiary, any accrued but unpaid income shall be distributed to such primary beneficiary's estate; (3) principal distributions may be made to the primary beneficiary in the manner specified in the trust from which such stock is set aside; (4) each S corporation trust created under this section shall terminate in accordance with the termination provisions of the trust from which the S corporation stock was set aside and, upon such termination, all of the remaining principal of such S corporation trust shall be distributed in the same manner as the remaining property of the trust from which the S corporation stock was set aside; and (5) the election under Section 1361(d)(2) of the Code shall be made in the manner and within the time required by said Section. Any trust to which the provisions of this section apply is intended to constitute a qualified subchapter S trust, as defined in Section 1361(d)(3) of the Code, or an electing small business trust, as defined in Section 1361(e) of the Code, and any provision of this Trust Agreement which may conflict with or fail to satisfy this intention shall be disregarded, reconciled or amplified to accomplish this objective. References to "stock" in this paragraph shall include the ownership units of an entity other than a corporation if such entity has elected to be classified as an S corporation. XMMMA "MA to 17 ARTICLE VIII - MISCELLANEOUS PROVISIONS A. Survivorship. For purposes of this Trust Agreement, no person shall be deemed to have survived the Grantor if such person shall die within 90 days after the Grantor's death; however, the Trustee may make distributions from the trusts created under this Trust Agreement within that period for the support of the Grantor's children. Any person who is prohibited by law from inheriting property from the Grantor shall be treated as having failed to survive the Grantor. B. Additions To Trust. The Grantor, or any other person, may at any time, grant, transfer or convey, either by inter vivos transfer or by Will, to the Trustee such additional property as he or she desires to become a part of any trust hereby created and, subject to acceptance by the Trustee, such additional property shall be allocated to the trusts on the basis specified in the instrument by which such property is transferred, and shall thereafter be held, administered and distributed by the Trustee in accordance with the provisions of this Trust Agreement. C. Separate Property; Trust Names. After the death of the Grantor, the beneficial interests of a beneficiary in any trust created under this Trust Agreement, as well as any income or principal distributed to such beneficiary, shall be the separate property and estate of such beneficiary. In addition, the Trustee may choose the name which is given to a trust created hereunder, even if the name chosen differs from that otherwise provided for herein, and the Trustee may also rename a trust created hereunder at any time and for any reason (by acknowledged instrument and without a court order approving such change). D. Spendthrift Provisions. After the death of the Grantor, each trust created by this Trust Agreement shall be a spendthrift trust to the fullest extent allowed by law. Prior to the actual receipt of trust property by any beneficiary, no property (income or principal) distributable under any trust created by this Trust Agreement shall, voluntarily or involuntarily, be subject to anticipation or assignment by any beneficiary, or to attachment by or to the interference or control of any creditor or assignee of any beneficiary, or be taken or reached by any legal or equitable process in satisfaction of any debt or liability of any beneficiary, and any attempted transfer or encumbrance of any interest in such property by any beneficiary hereunder prior to distribution shall be void. E. Inclusion Ratio and GST Exemption Amount. References to "inclusion ratio" shall have the same meaning as that term is defined in Section 2642(a) of the Code. References to the Grantor's "GST exemption amount" shall be the maximum amount of the Grantor's GST exemption available to the Grantor and the Grantor's estate at the time of the Grantor's death, after taking into account all allocations of the Grantor's GST exemption made by the Grantor 0-4 18 pursuant to Section 2632(a) of the Code during the Grantor's lifetime, as well as all deemed and automatic allocations occurring during the Grantor's lifetime and at the Grantor's death. In satisfying any distributions of the Grantor's GST exemption amount, the Trustee may make distributions in cash or in kind, or partly in each and shall value each such property at the date of its distribution. F. Descendants. References to "descendant" or "descendants" mean lineal blood descendants of the first, second or any other degree of the ancestor designated; provided, however, that such references shall include, with respect to any provision of this Trust Agreement, descendants who have been conceived at any specific point in time relevant to such provision and who thereafter survive birth; and provided, further, an adopted child and such adopted child's lineal descendants by blood or adoption shall be considered under this Trust Agreement as lineal blood descendants of the adopting parent or parents and of anyone who is by blood or adoption a lineal ancestor of the adopting parent or of either of the adopting parents. G. Inearmcitated. A beneficiary (other than the Grantor) shall be deemed "incapacitated" if the Trustee, in the Trustee's discretion, determines that such beneficiary lacks the ability, due to a physical or mental condition, to manage his or her own personal and financial affairs. The Grantor or a Trustee shall be deemed "incapacitated" if and for as long as (i) a court of competent jurisdiction has made a finding to that effect, (ii) a guardian or conservator of the Grantor's or such Trustee's person or estate has been appointed by a court of competent jurisdiction and is serving as such, or (iii) one physician (licensed to practice medicine in the state where the Grantor or Trustee is domiciled at the time of the certification, and who is board certified in the specialty most closely associated with the cause of the Grantor's or Trustee's incapacity) certifies that due to a physical or mental condition the Grantor or Trustee lacks the ability to manage his or her own personal and financial affairs. A Trustee shall immediately cease to serve upon being deemed incapacitated. The Grantor shall be deemed to have regained capacity if there is a finding to that effect by a court of competent jarisdiction or if one physician (with the same qualifications described above) certifies that the Grantor is capable of managing the Grantor's personal and financial affairs. H. Internal Revenue Code. References to various Sections of the "Code" are to such designated Sections of the Internal Revenue Code of 1986, as amended. I. Heirs. References to "heirs" are to those persons who would inherit separate personal property from the person designated under the statutes of descent and distribution of the State of Texas, if such person died intestate and single at such time. J. Governing Law., The construction, validity and administration of each trust created under this Trust Agreement shall be controlled by the laws of the State of Texas. After 19 the death of the Grantor, the Trustee may designate the laws of another jurisdiction as the controlling law with respect to the construction, validity and administration of a particular trust if either (i) the Trustee resides in, or administers that trust in, such designated jurisdiction (or in the case of a corporate Trustee, if such corporate Trustee is chartered in such designated jurisdiction), or (ii) the primary beneficiary of such trust resides in such designated jurisdiction, in which case the laws of such designated jurisdiction shall apply to such trust as of the date specified in such designation. Any such designation shall be in writing and shall be delivered to each beneficiary of the affected trust. K. Per Stirpes. When a distribution is to be made to a person's descendants "per stapes," property shall be divided into as many equal shares as there are (i) members of the nearest generation of descendants who are then living, and (ii) deceased members of that generation who left descendants who are then living. This division into shares shall begin at the generation nearest to such person that has a living member. Each living member of the nearest generation of descendants with a member then living shall receive one share, and the share that would have passed to each deceased member of that generation who left descendants who are then living shall be divided in a similar manner (by reapplying the preceding rule) among his or her then living descendants. For example, if a person has deceased children and living children when a distribution is to be made, the assets will be divided into equal shares at the child level and distributed per stirpes below that level; however, if the person has no living children at that time, that equal division will be made at the grandchild level (or lower, if appropriate) and distributed per stirpes below that level. This definition is intended to override any conflicting or contrary common law definition. In the case of a distribution which is to be made "per stapes" in the event of the death of the Grantor, references in this Section to "then living" or to "living" shall mean persons who survive the Grantor. 20 IN WITNESS WHEREOF, the Grantor and the Trustee have hereunto set their hands as of the date first above written. Witnesses: Q-�� � r-1 41- �- \ STATE OF TEXAS COUNTY OF WILLIAMSON Grantor: TON,cr'rantor Trustee: KATHRYN J. CARLTON. Trustee 1�- This instrument was acknowledged before me on the 4%. day of , 2016, by KATHRYN J. CARLTON as Grantor and as Trustee of the Kathryn J. Carlton Revocable Living Trust. JS "ELIZA9E'(H+, M�pgflLAND _ NOTARY PUBLIC, SYAM OPYM MY COMMISSION A� +_5 Notary Pu c, ate of Texas 21 SCHEDULE "A" - INITIAL TRUST PROPERTY 1. Sum of 10.00 (TEN) dollars. 2. 134.52 acres of land, more or less, out of the WOODRUFF STUBBLEFIED SURVEY, Abstract No. 556 in Williamson County, Texas, with an address of 1620 County Road 106, Georgetown, Texas 78626. This land is given to Grantor by her father, R. Howard Harshbarger, as a gift, and it is the express intent of the Grantor for this land to maintain its identity as her own separate property. 22 TRUST CERTIFICATION I. Trust Name and Date. The following trust ("Trust") is the subject of this Trust Certification: The KATHRYN J. CARLTON REVOCABLE LIVING TRUST, dated September 1, 2016 ("Trust Agreement"). The Trust currently exists and is in full force and effect. II. Grantor and Trustee. The grantor ("Grantor") of the Trust is KATHRYN J. CARLTON. The Trust is currently being managed by the trustee ("Trustee") KATHRYN J. CARLTON, 323 Bastian Lane, Georgetown, Texas 78626. III. Powers of Trustee. The Trustee of the Trust is authorized to acquire, sell, convey, encumber, lease, borrow, manage, and otherwise deal with interests in real and personal property in the name of the Trust. All powers of the Trustee are fully set forth in the Trust Agreement. IV. Revocabilitv. The Grantor may alter, amend, revoke or terminate the Trust. The Trust has not terminated or been revoked, modified, or amended in any manner that would cause the representations contained in this Certification of Trust to be incorrect, and there have been no amendments limiting the powers of the Trustee over the property of the Trust. V. Right To Use Principal Residence. The Grantor (or other primary beneficiary) has the right to use and occupy real or personal property owned by any trust created by the Trust as the Grantor's or such primary beneficiary's principal residence rent free and without charge for life or until the Trust is revoked or terminated, whichever occurs first. The Grantor intends that all eligible real or personal property which is owned by a bust created by the Trust qualify for the homestead exemption and that such trust is a "qualifying trust" as defined and described in Section 11.130) of the Texas Tax Code and, if applicable, Section 41.0021 of the Texas Property Code. VI. Authority of Multiple Trustees. When multiple trustees are serving, each such trustee shall have the authority to act alone and independently of the other trustees then serving, without the necessity of consultation with or approval of any other co -trustee or co -trustees. Any writing signed by a co -trustee with the authority to act alone and independently shall be valid and effective for all purposes as if signed by all such trustees. VII. Manner In Which Title Should Be Taken. The full legal name of the Trust for purposes of transferring assets into the Trust, holding title of assets, and conducting business for and on behalf of the Trust, is: "KATHRYN J. CARLTON, Trustee of the KATHRYN J. CARLTON REVOCABLE LIVING TRUST" VIII. Personal Nature of Trust. The Trust provisions are not attached to this Trust Certification because they are of a personal nature and set forth the distribution of Trust property. They do not modify the powers of the Trustee. The signatory of this Trust Certification is 1 currently the acting Trustee of the Trust and declares that the foregoing statements are true and correct, under penalty of penury. IXo Validity of Copies of This Trust Certification A copy of this Trust Certification shall be just as valid as the original. IN WITNESS WHEREOF, the Grantor and the Trustee have hereunto set their hands as of the date of the notary's acknowledgment below. Witnesses: A Grantor: WitnVses: �12 STATE" OF TEXAS COUNTY OF WILLIAMSON I THRYN J. CAR TON, C, antor Trustee: This instrument was acknowledged before me on the day of 2016, by KATHRYN J. CARLTON as Grantor and as Trustee of the Kathryn J. Carlton Revocable Living Trust. a,. BuzasErH MCFAJUM NOrWCOMMIssM Notary Pu ,State of Texas GEOR WN Petitioned for ETJ Removal CARLTON 0 70s 0 ® Property Georgetown ETj City limits 0 450 900 US Feet