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2012-104s:llegallour documentslordinances\12�tnoon acquisition ordinance.doc ORDINANCE NO. 2012-104 AN ORDINANCE FINDING THAT A PUBLIC USE AND NECESSITY EXISTS TO ACQUIRE FEE SIMPLE TO A 1.198 ACRE TRACT LOCATED IN THE M.E.P. & P.R.R. CO. SURVEY, ABSTRACT NUMBER 927, CITY OF DENTON, DENTON COUNTY, TEXAS, AS MORE PARTICULARLY DESCRIBED ON EXHIBIT "A", ATTACHED HERETO AND MADE A PART HEREOF, LOCATED GENERALLY 1N THE 1100 BLOCK OF SOUTH MAYHILL ROAD (THE "PROPERTY 1NTERESTS"), FOR THE PUBLIC USE OF EXPANDING AND IMPROVING MAYHILL ROAD, A MUNICIPAL STREET AND ROADWAY; AUTHORIZING THE CITY MANAGER OR HIS DESIGNEE TO MAKE AN OFFER TO SHIRLEY F. MOON, 1NDIVIDUALLY AND AS TRUSTEE OF THE MOON FAMILY LIVING REVOCABLE TRUST (COLLECTIVELY, THE "OWNER") TO PURCHASE THE PROPERTY INTERESTS FOR THE PURCHASE PRICE OF ONE HUNDRED FIVE THOUSAND DOLLARS AND NO CENTS ($105,000.00), AND OTHER CONSIDERATION, AS PRESCRIBED 1N THE CONTRACT OF SALE (THE "AGREEMENT"), AS ATTACHED HERETO AND MADE A PART HEREOF AS EXHIBIT "B"; AUTHORIZING THE EXPENDITURE OF FUNDS THEREFOR; AUTHORIZING RELOCATION EXPENDITURES; AND PROVIDING AN EFFECTIVE DATE. WHEREAS, after due consideration of the public interest and necessity and the public use and benefit to accrue to the City of Denton, Texas: THE COUNCIL OF THE CITY OF DENTON HEREBY ORDAINS: SECTION 1. The Council finds that a public use and necessity exists, and that the public welfare and convenience require the acquisition of the Property Interests by the City of Denton, Texas (the "City"), The City Council hereby finds and determines that the acquisition of the Property Interests is necessary for public use to provide street and roadway expansion and improvements to serve the public and the citizens of the City of Denton, Texas. SECTION 2. The City Manager, or his designee, is hereby authorized to make a formal offer to the Owner to purchase the Property Interests from the Owner. SECTION 3. The City Manager, or his designee, is hereby authorized to execute for and behalf of the City (i) the Agreement, by and between the City and Owner, in the form attached hereto and made a part hereof as Exhibit "B", with a purchase price of $105,000.00 and other consideration, plus costs and expenses, all as prescribed in the Agreement; and (ii) any other documents necessary for closing the transaction contemplated by the Agreement. SECTION 4. The City Manager, or his designee, is directed, by certified mail, return receipt requested, to disclose to Owner any and all appraisal reports produced or acquired by the City relating specifically to the Owner's property and prepared in the 10 years preceding the date of the offer made by the Agreem�nt. SECTION 5. The offer to Owner shall be made in accordance with a11 applicable law. SECTION 6. The City Manager is authorized to make expenditures in accordance with (i) the terms of the Agreement; and (ii) Ordinance No. 2012-073, dated April 17, 2012, pertaining to relocation related expenses and advisory services. SECTION 7. If any section, article, paragraph, sentence, phrase, clause or word in this ordinance, or application thereof to any persons or circumstances, is held invalid or unconstitutional by a court of competent jurisdiction, such holding shall not affect the validity of the remaining portions of this ordinance; the City Council declares that it would have ordained such remaining portion despite such invalidity, and such remaining portion shall remain in full force and effect. SECTION 8. approval. � PASSED AND APPROVED this the � This ordinance shall become effective immediately upon its passage and ATTEST: JENNIFER WALTERS, CITY SECRETARY � By: APPR ED A TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY By: ' �—� day of , 2012. MARK A. B S, AYOR EXHIBIT "A" - to Ordinance (Property Interests) rthur Sur�eying Co., I nc. .�"rofess.ioxxa,� Lara.d Sa.xx°ve,�rvrs P.O. Boa 54 �- Lewisville, Texas '75067 Of�"ice: (972) 221-9439 --� Fax: (972) Z?1-4675 EXHIBIT "A" MAYHILL ROAD RIGHT-OF-WAY PARCEL 1VY116 1.19$ Acres City of Denton, Denton Connty, Texas BEIN'G all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. Company Survey, Abstract Number 927, Denton County, Texas, and being part of that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 479, Page 431, Deed Records, Denton County, Texas (D.R.D.C.T.), and being all that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 505, Page 216, D.R.D.C.T., and being more particularly described as follows: BEGINNING at a"PK" nail set in Mayhill Aoad for the northeast corner of said Moon tract (Vol, 505, Pg. 216), same point being in the east line of a tract of land described by deed to Leroy Barber and wife, Lucy Barber, recorded in Volume 465, Page 110, D.R.D.C.T.; THENCE South 02 degrees 35 minutes 02 seconds West, with the east line of said Moon tract (Vol. 505, Pg. 216) and with Mayhill Road, a distance of 98.00 feet to a"PK" nail set in Mayhill Road for the southeast corner of said Moon tract (Vol. 505, Pg. 216) and the northeast corner of said Moon tract (Vol. 479, Pg. 431); THENCE South 02 degrees 56 minutes 41 seconds West, with the east line of said Moon tract (Vol. 479, Pg. �431) and with Mayhill Road, a distance of 132.16 feet to a"PK" nail set in Mayhill Road for the northeast corner of a tract of land described by deed to Ralph B, Bridges, recorded in Volume 1716, Page 548, D.R.D.C.T., same po'vnt being in the east line of said Moon tract (Vol. 479, Pg, 431); THENCE South 89 degrees 27 minutes 31 seconds West,- over and across said Moon tract (Vol. 479, Pg. 431), with the north line of said Bridges tract, a distance of 308.Q0 Feet to a 1/2 ineh iron rod with yellow cap stamped "Arthur Surveying Company" (A5C) set for the northwest corner of'said Bridges txact, same point being in the west line of said Moon tract (Vol. 479, Pg. 431} and the east line of a tract of land described by deed to Ralph W. Bridges, recorded under County Clerk's File Number 97-9760, Real Froperty Records, Denton County, Texas; THENCE North 02 degrees 16 minutes 22 seconds East, with the west line of said Moon tract (Vol, 479, Pg, 431) and the east line of said Bridges tract (CC# 97-9760), a distance of 131,22 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the norihwest corner of said Moon tract (Vol, 479, Pg. 431) and the southwest corner of said Barber tract, same point being in the east line of a tract of land described by �deed to C.B. Wilson, recorded in Volume 690, Paga 117, D.R.D.C.T.; THENCE North 89 degrees 18 minutes 02 seconds East, with the north line of said Moon tract (Vol. 479, Pg. 431) and the south Iine of said Barber tract, a distance of 143,90 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the southwest corner of said Moon tract (Vol. 505, Pg. 216), same point being in the south line of said Barber tract and the north line of said Moon tract (Vol. 479, Pg. 431); (continued) C1107131-33 Parcel M116 EXHIBIT "A" - to Ordinance (Property Interests) � rthur Surveying Ca., I nc. F'xn#'�ssiox�� _�.�n�d Sux-�rs,yox� P.O. Box 54 -- Lewisville, Texas 75067 Of�ice: (972) 221-9439 •-- Fax: (972) 221-4675 THENC� North 45 degrees 39 minutes 02 seconds East, with the northwestarly line of said Moon tract (Vol. 505, Pg. 216), a distance of 51,41 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 40 degrees 31 minutes 33 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 67.16 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 75 degrees 37 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 48.92 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 88 degrees 40 minutes 02 seconds East, with the north line of said Moon tract (Vol, 505, Pg. 216), a distance of 13.30 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 89 degrees 03 minutes 42 seconds East, with the north line of said Moon tract (Vol, 505, Pg. 216), a distance of 29,02 feet to the PUINT OF BEGINNr1VG and containing 1,198 acres of land, of which 0.150 acre lie within the existing Mayhill Road. �_ C1107131-33 Pazcel M116 i 1 1 i i C.B. Wilaon I Volume 890, Pg. 117 I i I i I I i i r.R.s. W N N _ _ �� M �'�f 0 O~ z I.R.S.( EXHIBIT "A" - to Ordinance (Property Interests) I.eroy Barber & wlte, Luay Harber Volume 466, Page 110 (remainder) N89°l8'02"E 143.90' r.R.� (c.M.)Q � I� 3_ I � o � I �,�n t� o� z ii i S� i! , L3 ,�,..r., LS ��,s, 4.R.s, �2, !RS i � Richard Moon. & I,R.S� �te, Shirley M on Ll� volume 606, Pag 218 �— _ _ ---- _ _ ��Px�� f� .$• I I .� Riohard Moon & I A wlfe, Shirley Moon � .� Volume 479, Page 431 � (remainder) �°' � . —� ~ 2%'31"OV 308.0� wr� �w�( � , �, ��, � � Ralph W, Br(dges � 9 Ralph B. Hridgee � CC# 97-9780 I.�,�� P$' Volume 1718, Page 648 � I �} �� G� � I I � �.�.�� ^� I � ,'^� n ��9 I �n I �� I � � 1 N89'36'02'W i "X" Fnd. 586,60' _ r � (C.M.) 0--------- ------ EXHIBIT "B" Mayhill Road Ri ht - of - Way Parcel M116 1.198 Acres M.E.P. & P.R.R. Co. Survey, Abstract Number 927 City of Denton Denton County, Texas -- 2012 -- �K„� �Set O�, 0 o Wa�' 0 o � b � a � � ��d � � �r � ,° N 1�0 � 50 1�� SCALE: 1" = 100' Bearings shown hereon based an the Ciiy of Denton GIS Network. NOTES: . I.R.F. = 5/8" Tron Rod Found • I.R.S, = 1/2" Izon Rod Set with yellow cap stamped "Arthur Surveying Company" • All improvements not shown hereon, �o o m �� New Right-of-way 1.048 ac. (45,637 sq. ft.) v1 Existing Implied Dedication 0,150 ac. (6,536 sq, ft,) �� 1.198 Acres (s2,173 sq. ft.) "P S'et a!! Right-of-Way Parcel M116 LINE TABLE Ll N45°39'02"B 51.41' L2 N40°31'33"E 67.16' L3 N75°37'02"E 48.92' � �vs8°4o�oz�� 13.30' LS I1�89°03'42"E 29.02' rthur Surveying Co., Inc. Prnfessional Land Stsrveyors P.O.Bos 64 -- Lewiaville, Tegas 76067 Office: (972) 221-9439 Fax: (972) 221-487G Eatabliahed 1986 STATE OF TEXAS § COUNTY OF DENTON § EXHIBIT "B" CONTRACT OF SALE NOTICE YOU, AS OWNER OF THE PROPERTY (AS DEFINED BELOV�, HAVE THE RIGHT TO: (1) DISCUSS ANY OFFER OR AGREEMENT REGARDING THE CITY OF DENTON'S ACQUISITION OF THE PROPERTY WITH OTHERS; OR (2) KEEP THE OFFER OR AGREEMENT CONFIDENTIAL, UNLESS THE OFFER OR AGREEMENT IS SUBJECT TO CHAPTER 552, GOVERNMENT CODE. This Contract of Sale (the "Contract") is made this �� day of , 2412, effective as of the date of execution hereof by Seller, as defined er n(the "Effective Date"), by and between Shirley F. Moon, individually and as Trustee of the Moon Family Living Revocable Trust (collectively referred to herein as "Seller") and the City of Denton, Texas, a Home Rule Municipal Corporation of Denton County, Texas (referred to herein as "Buyer"). RECITALS WHEREAS, Seller owns that certain tract of land being more particularly described on Exhibit "A" and depicted on Exhibit "B", both attached hereto and made a part hereof for all purposes, being located in Denton County, Texas (the "Land"); and WHEREAS, Seller desires to sell to Buyer, and Buyer desires to buy from Seller, the Land, together with any and all rights or interests of Seller in and to adjacent streets, alleys and rights of way and together with all and singular the improvements and fixtures thereon and all other rights and appurtenances to the Land (collectively, the "Property"); and WHEREAS, unless expressly provided otherwise in this Contract, all obligations of Seller are the joint and several obligations of each of them. ARTICLE I SALE OF PROPERTY For the consideration hereinafter set forth, and upon the terms, conditions and provisions herein contained, and subject to the reservations herein, Seller agrees to sell and convey to Buyer, and Buyer agrees to purchase from Seller, the Property. Seller, subject to the limitation of such reservation made herein, shall reserve, for themselves, their heirs, devisees, successors and assigns all oil, gas and other minerals in, on and under and that may be produced from the Property. Seller, their heirs, devisees, successors and assigns shall not have the right to use or access the surface of the Property, in any way, manner or form, in connection with or related to the reserved oil, gas, and other minerals andlor related to exploration and/or production of the oil, gas and other minerals reserved herein, including without limitation, use or access of the surface of the Property for the location of any well or drill sites, well bores, whether vertical or any deviation from vertical, water wells, pit areas, seismic activities, tanks or tank batteries, pipelines, roads, electricity or other utility infrastructure, and/or for subjacent or lateral support for any surface facilities or well bores, or any other infrastructure or improvement of any lcind or type in connection with or related to the reserved oil, gas and other minerals, and/or related to the exploration or production of same. As used herein, the term "minerals" shall include oil, gas and all associated hydrocarbons, and shall exclude (i) all substances (except oil, gas and all associated hydrocaxbons) that any reasonable extraction, mining or other exploration and/or production method, operation, process or procedure would consume, deplete or destroy the surface of the Property; and (ii) all substances (except oil and gas) which are at or near the surface of the Property. The intent of the parties hereto is that the meaning of the term "minerals" as utilized herein, shall be in accordance with that set forth in Reed v. Wylie, 597 S.W.2d 743 (Tex. 1980). As used herein, the term "surface of the Property" shall include the area from the surface of the earth to a depth of five hundred feet (500') below the surface of the earth and a11 areas above the surface of the earth. ARTICLE II PURCHASE PRICE AND EARNEST MONEY 2.01 Purchase Price. The Purchase Price to be paid jointly to Seller for the Property is the sum of One Hundred Five Thousand and No/100 Dollars ($105,000.00) (the "Purchase Price"). 2.02 Earnest Money. Buyer shall deposit the sum of One Thousand and No/100 Dollars ($1,000.00), as Earnest Money (herein so called) with Title Resources, LLC, 525 South Loop 288 , Suite 125, Denton, Texas, 76205 (the "Title Company"), as escrow agent, within fourteen (14) calendar days of the Effective Date hereo£ All interest earned thereon shall become part of the Earnest Money and shall be applied or disposed of in the same manner as the original Earnest Money deposit, as provided in this Contract. If the purchase contemplated hereunder is consummated in accordance with the terms and the provisions hereof, the Earnest Money, together with all interest earned thereon, shall be applied to the Purchase Price at Closing. In all other events, the Earnest Money, and the interest accrued thereon, shall be disposed of by the Title Company as provided in this Contract. 2.03 Independent Contract Consideration. Within fourteen (14) calendar days after the Effective Date, Buyer shall deliver to the Title Company, payable jointly to and for Contract of Sale the beneiit of Seller, a check in the amount of One Hundred and No/100 Dollars ($100.00� (the "Independent Contract Consideration"), which amount the parties hereby acknowledge and agree has been bargained for and agreed to as consideration for Seller's execution and delivery of the Contract. The Independent Contract Consideration is in addition to, and independent of any other consideration or payment provided in this Contract, is non-refundable, and shall be retained by Seller notwithstanding any other provision of this Contract. ARTICLE III TITLE AND SURVEY 3.01 Title Commitment. (a) Within twenty (20) calendar days after the Effective Date, Seller shall cause to be furnished to Buyer a current Commitment for Title Insurance (the "Title Commitment") for the Property, issued by Title Company. The Title Commitment shall set forth the state of title to the Property, including a list of liens, mortgages, security interests, encumbrances, pledges, assignments, claims, charges, leases (surface, space, mineral, or otherwise), conditions, restrictions, options, severed mineral or royalty interests, conditional sales contracts, rights of first refusal, restrictive covenants, exceptions, easements (temporary or permanent), rights-of-way, encroachments, or any other outstanding claims, interests, estates or equities of any nature (each of which are referred to herein as an "Exception"). (b) Along with the Title Commitment, Seller shall also cause to be delivered to Buyer, at Buyer's sole cost and expense, true and correct copies of all instruments that create or evidence Exceptions (the "Exception Documents"), including those described in the Title Commitment as exceptions to which the conveyance will be subject and/or which are required to be released or cured at or prior to Closing. 3.02 Survey. Within thirty (30) calendar days after the Effective Date, Seller shall cause to be prepared at Buyer's expense, a current on the ground survey of the Property (the "Survey"). The contents of the Survey shall be prepared by a surveyor selected by Buyer and sha11 include the matters prescribed by Buyer, which may include but not be limited to, a depiction of the location of all roads, streets, easements and rights of way, both on and adjoining the Property, water courses, 100 year flood plain, fences and improvements and structures of any kind. The Survey shall describe the size of the Property, in acres, and contain a metes and bounds description thereo£ Seller shall furnish or cause to be furnished any affidavits, certificates, assurances, and/or resolutions as required by the Title Company in order to amend the survey exception as required by Section 3.05 below. The description of the Property as set forth in the Survey, at the Buyer's election, shall be used to describ,e the Property in the deed to convey the Property to Buyer and shall be the description set forth in the Title Policy. 3.03 Review of Title Commitment, Survey and Exception Documents. Buyer sha11 Contract of Sale have a period of fifteen (15) calendar days (the "Title Review Period") commencing with the day Buyer receives the last of the Title Commitment, the Survey, and the Exception Documents, in which to give written notice to Seller, specifying Buyer's objections to one or more of the items ("Objections"), if any. All items set forth in the Schedule C of the Title Commitment, and all other items set forth in the Title Commitment which are required to be released or otherwise satisfied at or prior to Closing, shall be deemed to be Objections without any action by Buyer. 3.04 Seller's Obligation to Cure; Buyer's Right to Terminate. The Seller sha11, within twenty (20) calendar days after Seller is provided notice of Objections, either satisfy the Objections at Seller's sole cost and expense or promptly notify Buyer in writing of the Objections that Seller cannot or will not satisfy at Se11er's expense. Notwithstanding the foregoing sentence, Seller shall, in any event, be obligated to cure those Objections or Exceptions that have been voluntarily placed on or against the Property by Seller after the Effective Date. If Seller fails or refuses to satisfy any Objections that Seller is not obligated to cure within the allowed twenty (20) calendar day period, and if Buyer does not agree in writing to an extension of that period, said extension to not exceed an additional thirty (30) calendar days, then Buyer has the option of either: (a) waiving the unsatisfied Objections by, and only by, notice in writing to Seller prior to Closing, in which event those Objections shall become Permitted Exceptions (herein so called), or (b) terminating this Contract by notice in writing prior to Closing and receiving back the Earnest Money, in which latter event Seller and Buyer shall have no further obligations, one to the other, with respect to the subject matter of this Contract. 3.04.A Additional Title Commitment. Due to the fact that the effective period of the Title Commitment shall expire prior to Closing, Seller shall cause to be furnished to Buyer, no earlier than ninety one (91) calendar days after the Effective Date and no later than one hundred ten (110) calendar days after the Effective Date, a Title Commitment ("Updated Commitment"), in the form of the Title Commitment prescribed by Section 3.01, above. Buyer shall have fifteen (15) calendar days to review and provide Objections, if any, to the items in the Updated Commitment in the same manner as prescribed by Section 3.03 related to the Title Commitment. All time periods related to review and cure of the Objections, waiver of uncured Objections and termination of this Contract, as set forth in Article III, above, shall be applicable to the Objections by Buyer to the Updated Commitment, if any, and Closing shall be so extended to accommodate such review and cure period. 3.05 Title Policy. At Closing, Seller, at Buyer's sole cost and expense, shall cause a standard Texas Owner's Policy of Title Insurance ("Title Policy") to be furnished to Buyer. The Title Policy sha11 be issued by the Title Company, in the amount of the Purchase Price and insuring that Buyer has indefeasible fee simple title to the Property, subject only to the Permitted Exceptions. The Title Policy may contain only the Contract of Sale Permitted Exceptions and shall contain no other exceptions to title, with the standard printed or common exceptions amended or deleted as follows: (a) survey exception must be amended if required by Buyer to read "shortages in area" only (although Schedule C of the Title Commitment may condition amendment on the presentation of an acceptable survey and payment, to be borne solely by Buyer, of any required additional premium); (b) no exception will be permitted for "visible and apparent easements" or words to that effect (although reference may be made to any specific easement or use shown on the Survey, if a Permitted Exception); (c) no exception will be permitted for "rights of parties in possession"; (d) no liens will be shown on Schedule B. Notwithstanding the enumeration of the following exceptions, amendments and/or deletions, Buyer may obj ect to any Exception it deems material, in its sole discretion. ARTICLE IV FEASIBILITY REVIEW PERIOD 4.01 Review Period. Any term or provision of this Contract notwithstanding, the obligations of Buyer specified in this Contract are wholly conditioned on Buyer's having determined, in Buyer's sole and absolute discretion, during the period commencing with the Effective Date of this Contract and ending sixty (60) calendar days thereafter (the "Absolute Review Period"), based on such tests, examinations, studies, investigations and inspections of the Property the Buyer deems necessary or desirable, including but not limited to studies or inspections to determine the existence of any environmental hazards or conditions, performed at Buyer's sole cost, that Buyer finds the Property suitable for Buyer's purposes. Buyer is granted the right to conduct engineering studies of the Property, and to conduct a physical inspection of the Property, including inspections that invade the surface and subsurface of the Property. If Buyer determines, in its sole judgment, that the Property is not suitable, for any reason, for Buyer's intended use or purpose, the Buyer may terminate this Contract by written notice to the Seller, as soon as reasonably practicable, but in any event prior to the expiration of the Absolute Review Period, in which case the Earnest Money will be returned to Buyer, and neither Buyer nor Seller shall have any further duties or obligations hereunder. In the event Buyer elects to terminate this Contract pursuant to the terms of this Article IV, Section 4.01, Buyer will provide to Se11er copies of (i) any and all non-confidential and non-privileged reports and studies obtained by Buyer during the Absolute Review Period; and (ii) the Survey. Contract of Sale ARTICLE V REPRESENTATIONS, WARRANTIES. COVENANTS AND AGREEMENTS 5.01 Representations and Warranties of Seller. To induce Buyer to enter into this Contract and consummate the sale and purchase of the Property in accordance with the terms and provisions herewith, Seller, unless provided otherwise herein, represents and warrants to Buyer as of the Effective Date and as of the Closing Date, except where specific reference is made to another date, that: (a) The descriptive information concerning the Property set forth in this Contract is complete, accurate, true and correct. (b) There are no adverse or other parties in possession of the Property or any part thereof, and no party has been granted any license, lease or other right related to the use or possession of the Property, or any part thereof, except those described in the Leases, as defined in Article V, Section 5.02(a). (c) The Seller has good and marketable fee simple title to the Property, subject only to the Permitted Exceptions. (d) The Seller has the full right, power, and authority to sell and convey the Property as provided in this Contract and to carry out Seller's obligations hereunder. (e) The Seller has not received notice of, and has no other knowledge or information of, any pending or threatened judicial or administrative action, or any action pending or threatened by adjacent landowners or other persons against or affecting the Property. (fj The Seller has disclosed to Buyer in writing of any and all facts and circumstances relating to the physical condition of the Property that may materially and adversely affect the Property and operation or intended operation thereof, or any portion thereof, of which Seller has knowledge. (g) The Seller has paid all real estate and personal property taxes, assessments, excises, and levies that are presently due, if any, which are against or are related to the Property, or will be due as of the Closing, and the Property will be subj ect to no such liens. (h) Seller has not contracted or entered into any agreement with any real estate broker, agent, finder, or any other party in connection with this transaction or taken any action which would result in any real estate brolcer commissions or finder's fee or other fees payable to any other party with respect to the transactions contemplated by this Contract. (i) To the best of Seller's knowledge, there has not occurred the disposal or release Contract of Sale of any Hazardous Substance to, on or from the Property. As used in this Contract, "Hazardous Substance" means and includes a11 hazardous and toxic substances, waste or materials, chemicals, and any pollutant or contaminant, including without limitation, PCB's, asbestos, asbestos- containing material, petroleum products and raw materials, that are included under or regulated by any Environmental Law or that would or may pose a health, safety or environmental hazard. As used in this Contract, "Environmental Law" means and includes all federal, state, and local statutes, ordinances, regulations and rules presently in force or hereafter enacted relating to environmental quality, contamination, and clean-up of Hazardous Substances, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. 9601, et seq.), as amended by the Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and Recovery Act (42 U.S.C. 6901, et seq.), as amended, Toxic Substance Control Act, 15 U.S.C. 2601, et seq., and state superlien and environmental clean-up statutes and all rules and regulations presently or hereafter promulgated under or related to said statutes, as amended. (j) All Leases, as defined in Article V, Section 5.02(a), shall have expired or otherwise terminated and, subject to applicable law and the Relocation Ordinance, as defined below, any and all tenants or parties occupying the Property pursuant to the Leases shall have permanently abandoned and vacated the Property on or before the date of Closing. (k) The Seller is not a"foreign person" as defined in Section 1445 of the Internal Revenue Code of 1986, as amended. 5.02 Covenants and Agreements of Seller. Seller covenants and agrees with Buyer as follows: (a) Unless stated otherwise, within ten (10) calendar days after the Effective Date, Seller, at Seller's sole cost and expense, shall deliver to Buyer, with respect to the Property, true, correct, and complete copies of the following: (i) All lease agreements and/or occupancy agreements and/or licenses of any kind or nature (if oral, Seller shall provide to Buyer in writing all material terms thereo fl relating to the possession of the Property, or any part thereof, including any and all modifications, supplements, and amendments thereto (the "Leases"). (ii) All environmental audits, soil tests and engineering and feasibility reports, including any and all modifications, supplements and amendments thereto, with respect to the Property that Seller possesses or has the right to receive. Contract of Sale (iii) Shirley F. Moon, Trustee of the Moon Family Living Revocable Trust (the "Trust"), shall (a) deliver to Buyer, a true, correct and complete copy of the trust agreement of the Trust identifying the "true owner" of the Property; and (b) identify the "true owner" of the Property to Buyer, all in accordance with Section 2252.092 of the Texas Government Code. (b) From the Effective Date until the date of Closing or earlier termination of this Contract, Seller shall: (i) Not enter into any written or oral contract, lease, easement or right of way agreement, conveyance or any other agreement of any kind with respect to, or affecting, the Property that will not be fully performed on or before the Closing or would be binding on Buyer or the Property after the date of Closing. (ii) Advise the Buyer promptly of any litigation, arbitration, or administrative hearing concerning or affecting the Property. (iii) Not take, or omit to take, any action that would result in a violation of the representations, warranties, covenants, and agreements of Seller. (iv) Not sell, assign, lease or convey any right, title or interest whatsoever in or to the Property, or create, grant or permit to be attached or perfected, any lien, encumbrance, or charge thereon. (c) Seller shall indemnify and hold Buyer harmless, to the extent permitted by law, from all loss, liability, and expense, including, without limitation, reasonable attorneys' fees, arising or incurred as a result of any liens or claims resulting from labor or materials furnished to the Property under any written or oral contracts arising or entered into prior to Closing. 5.03 Survival Beyond Closing. Notwithstanding anything to the contrary contained in this Contract, the representations, waxranties, covenants and agreements of Seller contained in this Contract shall survive the Closing, and shall not, in any circumstance, be merged with the Special Warranty Deed, as described in Article VII, Section 7.02(a). ARTICLE VI CONDITIONS PRECEDENT TO PERFORMANCE 6.01 Performance of Seller's Obligations. Buyer is not obligated to perform under this Contract unless, within the designated time periods, all of the following shall have occurred: (a) Seller has performed, furnished, or caused to be furnished to Buyer all items required to be so performed or furnished under other sections of this Contract; and Contract of Sale (b) Seller cures or Buyer waives in writing, within the time periods specified in Article III, all of Buyer's objections made in accordance with Article III. 6.02 Breach of Seller's Representations, Warranties, Covenants and Agreements. Buyer is not obligated to perform under this Contract unless all representations, warranties, covenants and agreements of Seller contained in this Contract are true and correct or have been performed, as applicable, as of the Closing Date, except where specific reference is made to another date. 6.03 Adverse Change. Buyer is not obligated to perform under this Contract, if on the date of Closing, any portion of the Property has been condemned by an entity other than Buyer, or is the subject of condemnation, eminent domain, or other material proceeding initiated by an entity other than Buyer, or the Property, or any part thereof, has been materially or adversely impaired in any manner. 6.04 Review Period. Buyer is not obligated to perform under this Contract if Buyer delivers notice to Seller pursuant to Article IV, Section 4.01 that Buyer has determined that the Property is unsuitable to or for Buyer's purposes. 6.05 Buyer's Right to Waive Conditions Precedent. Notwithstanding anything contained in this Contract to the contrary, Buyer may, at Buyer's option, elect to waive any of the conditions precedent to the performance of Buyer's obligations under this Contract by giving to the Seller, at any time prior to Closing, a written waiver specifying the waived condition precedent. 6.06 Buyer's Termination if Conditions Precedent Not Satisfied or Waived. If any of the conditions precedent to the performance of Buyer's obligations under this Contract have not been satisfied by Seller or waived by the Buyer, the Buyer may, by giving written notice to Seller, terminate this Contract. On Buyer's termination, the Earnest Money shall be immediately returned to Buyer by the Title Company. The Seller shall, on written request from Buyer, promptly issue the instructions necessary to instruct the Title Company to return to Buyer the Earnest Money and, thereafter, except as otherwise provided in this Contract, Buyer and Seller shall have no further obligations under this Contract, one to the other. ARTICLE VII CLOSING 7.01 Date and Place of Closing. The Closing (herein so called) shall take place in the offices of the Title Company and shall be accomplished through an escrow to be established with the Title Company, as escrowee. The Closing Date (herein sometimes called), shall be one hundred and eighty (180) calendar days after the Effective Date, unless otherwise mutually agreed upon by Buyer and Seller. Contract of Sale 7.02 Items to be Delivered at the Closing. (a) Seller. At the Closing, Seller shall deliver or cause to be delivered to Buyer or the Title Company, at the expense of the party designated herein, the following items: (i) The Title Policy, in the form specified in Article III, Section 3.05; (ii) The Special Warranty Deed, substantially in the form as attached hereto as Exhibit "C", subject only to the Permitted Exceptions, if any, duly executed by Seller and acicnowledged; (iii) Other items reasonably requested by the Title Company as administrative requirements for consummating the Closing. (b) Buver• At the Closing, Buyer shall deliver jointly to Seller or the Title Company, the following items: (i) The sum required by Article II, Section 2.O1, less the Earnest Money and interest earned thereon, in the form of a check or cashier's check or other immediately available funds; (ii) Other items reasonably requested by the Title Company as administrative requirements for consummating the Closing. 7.03 Adjustments at Closing. Notwithstanding anything to the contrary contained in this Contract and without limiting the general application of the provisions of Section 5.03, above, the provisions of this Article VII, Section 7.03 shall survive the Closing. The following item shall be adjusted or prorated between Seller and Buyer with respect to the Property: (a) Ad valorem taxes relating to the Property for the calendar year in which the Closing shall occur shall be prorated between Seller and Buyer as of the Closing Date. If the actual amount of t�es for the calendar year in which the Closing shall occur is not known as of the Closing Date, the proration at Closing shall be based on the amount of taxes due and payable with respect to the Property for the preceding calendar year. As soon as the amount of taxes levied against the Property for the calendar year in which Closing shall occur is known, Seller and Buyer shall readjust in cash the amount of taxes to be paid by each party with the result that Seller shall pay for those taxes attributable to the period of time prior to the Closing Date (including, but not limited to, subsequent assessments for prior years due to change of land usage or ownership occurring prior to the Closing Date) and Buyer shall pay for those taxes attributable to the period of time commencing with the Closing Date. Contract of Sale 7.04 Possession at Closing. Possession of the Property shall be delivered to Buyer at Closing. 7.05 Costs of Closing. Each party is responsible for paying the legal fees of its counsel, in negotiating, preparing, and closing the transaction contemplated by this Contract. Seller is responsible for paying fees, costs and expenses identified herein as being the responsibility of Seller. Buyer is responsible for paying fees, costs and expenses identified herein as being the responsibility of Buyer. If the responsibility for such costs or expenses associated with closing the transaction contemplated by this Contract are not identified herein, such costs or expenses shall be allocated between the parties in the customary manner for closings of real property similar to the Property in Denton County, Texas. ARTICLE VIII DEFAULTS AND REMEDIES 8.01 Seller's Defaults and Buyer's Remedies. (a) Seller's Defaults. Seller is in default under this Contract on the occurrence of any one or more of the following events: (i) Any of Seller's warranties or representations contained in this Contract are untrue on the Closing Date; or (ii) Seller fails to meet, comply with or perform any covenant, agreement, condition precedent or obligation on Seller's part required within the time limits and in the manner required in this Contract; or (iii) Seller fails to deliver at Closing, the items specified in Article VII, Section 7.02(a) of this Contract for any reason other than a default by Buyer or termination of this Contract by Buyer pursuant to the terms hereof prior to Closing. (b) Buyer's Remedies. If Seller is in default under this Contract, Buyer as Buyer's sole and exclusive remedies for the default, may, at Buyer's sole option, do any of the following: (i) Terminate this Contract by written notice delivered to Seller in which event the Buyer shall be entitled to a return of the Earnest Money, and Seller shall, promptly on written request from Buyer, execute and deliver any documents necessary to cause the Title Company to return to Buyer the Earnest Money; (ii) Enforce specific performance of this Contract against Seller, requiring Seller to convey the Property to Buyer subject to no liens, encumbrances, exceptions, and conditions other than those shown on the Title Contract of Sale Commitment, whereupon Buyer shall waive title objections, if any, and accept such title without reduction in Purchase Price on account of title defects and shall be entitled to assert any rights for damages based on Seller's representations, warranties and obligations that are not waived by Buyer by its acceptance of Seller's title; and (iii) Seek other recourse or relief as may be available to Buyer at or by law, equity, contract or otherwise. 8.02 Buyer's Default and Seller's Remedies. (a) Buyer's Default. Buyer is in default under this Contract if Buyer fails to deliver at Closing, the items specified in Article VII, Section 7.02(b) of this Contract for any reason other than a default by Seller under this Contract or termination of this Contract by Buyer pursuant to the terms hereof prior to Closing. (b) Seller's Remedy. If Buyer is in default under this Contract, Seller, as Seller's sole and exclusive remedies for the default, may, at Seller's sole option, do either one of the following: (i) Terminate this Contract by written notice delivered to Buyer in which event the Seller shall be entitled to a return of the Earnest Money, and Buyer shall, promptly on written request from Seller, execute and deliver any documents necessary to cause the Title Company to return to Seller the Earnest Money; or (ii) Enforce specific performance of this Contract against Buyer. ARTICLE IX MISCELLANEOUS 9.01 Notice. All notices, demands, requests, and other communications required hereunder shall be in writing, delivered, unless expressly provided otherwise in this Contract, by telephonic facsimile, by hand delivery or by United States Mail, and shall be deemed to be delivered and received, upon the earlier to occur of (a) the date provided if provided by telephonic facsimile or hand delivery, and (b) the date of the deposit of, in a regularly maintained receptacle for the United States Mail, registered or certified, return receipt requested, postage prepaid, addressed as follows: Contract of Sale SELLER: Shirley F. Moon, individually and as Trustee of the Moon Family Living Revocable Trust Telecopy: Copies to: For Seller: Telecopy: BUYER: City of Denton Paul Williamson Real Estate and Capital Support 901-A Texas Street Denton, Texas 76209 Telecopy: (940) 349-8951 For Buver: Richard Casner, Deputy City Attorney City Attorney's Office 215 E. McKinney Denton, Texas 76201 Telecopy: (940) 382-7923 9.02 Governing Law and Venue. This Contract is being executed and delivered and is intended to be performed in the State of Texas, the laws of Texas governing the validity, construction, enforcement and interpretation of this Contract. THIS CONTRACT IS PERFORMABLE IN, AND THE EXCLUSIVE VENUE FOR ANY ACTION BROUGHT WITH RESPECT HERETO, SHALL LIE 1N DENTON COUNTY, TEXAS. 9.03 Entirety and Amendments. This Contract embodies the entire agreement between the parties and supersedes all prior agreements and understandings, if any, related to the Property, and may be amended or supplemented only in writing executed by the party against whom enforcement is sought. 9.04 Parties Bound. This Contract is binding upon and inures to the benefit of Seller and Buyer, and their respective successors and assigns. If requested by Buyer, Seller agrees to execute, acknowledge and record a memorandum of this Contract in the Real Property Records of Denton County, Texas, imparting notice of this Contract to the public. 9.05 Risk of Loss. If any damage or destruction to the Property shall occur prior to Closing, or if any condemnation or any eminent domain proceedings are threatened or initiated by an entity or party other than Buyer that might result in the taking of any portion of the Property, Buyer may, at Buyer's option, do any of the following: (a) Terminate this Contract and withdraw from this transaction without cost, obligation or liability, in which case the Earnest Money shall be immediately returned to Buyer; or Contract of Sale (b) Consummate this Contract, in which case Buyer, with respect to the Property, shall be entitled to receive any (i) in the case of damage or destruction, all insurance proceeds; and (ii) in the case of eminent domain, proceeds paid for the Property related to the eminent domain proceedings. Buyer shall have a period of up to ten (10) calendar days after receipt of written notification from Seller on the final settlement of all condemnation proceedings or insurance claims related to damage or destruction of any improvement located on the Property, in which to make Buyer's election. In the event Buyer elects to close prior to such final settlement, then the Closing shall take place as provided in Article VII, above, and there shall be assigned by Seller to Buyer at Closing all interests of Seller in and to any and all insurance proceeds or condemnation awards which may be payable to Seller on account of such event. In the event Buyer elects to close upon this Contract after final settlement, as described above, Closing shall be held five (5) business days after such final settlement. 9.06 Further Assurances. In addition to the acts and deeds recited in this Contract and contemplated to be performed, executed and/or delivered by Seller and Buyer, Seller and Buyer agree to perform, execute andlor deliver, or cause to be performed, executed and/or delivered at the Closing or after the Closing, any further deeds, acts, and assurances as are reasonably necessary to consummate the transactions contemplated hereby. Notwithstanding anything to the contrary contained in this Contract and without limiting the general application of the provisions of Section 5.03, above, the provisions of this Article IX, Section 9.06 shall survive Closing. 9.07 Time is of the Essence. It is expressly agreed between Buyer and Seller that time is of the essence with respect to this Contract. 9.08 Exhibits. The Exhibits which are referenced in, and attached to this Contract, are incorporated in and made a part of, this Contract for all purposes. 9.09 Delegation of Authority. Authority to take any actions that are to be, or may be, taken by Buyer under this Contract, including without limitation, adjustment of the Closing Date, are hereby delegated by Buyer, pursuant to action by the City Council of Denton, Texas, to Franlc Payne, P.E., City Engineer of Buyer, or his designee. 9.10 Contract Execution. This Contract of Sale may be executed in any number of counterparts, all of which taken together shall constitute one and the same agreement, and any of the parties hereto may execute this Agreement by signing any such counterpart. 9.11 Business Days. If the Closing Date or the day of performance required or permitted under this Contract falls on a Saturday, Sunday or Denton County holiday, then the Closing Date or the date of such performance, as the case may be, shall be the next following regular business day. Contract of Sale 9.12 Relocation. Relocation advisory services and relocation applicable pursuant to Ordinance No. 2012-073 (the "Relocatio administered as provided by the Relocation Ordinance, asid transaction contemplated by this Contract. Executed by Seller on the SELLER: financial assistance, if n Ordinance"), shall be e and apart from the Shirley F. Moon, individually Shirley F. Moon, Trustee of the Moon Family Living Revocable Trust day of BUYER: 2012. By: GEORGE C. CAMPBELL, CITY MANAGER Executed by Buyer on the �4�� day of , 2012. ATTEST: JENNIFER WALTERS, CITY SECRETARY BY: _ . APPROVED AS TO LEGAL FORM: ANITA BURGESS, CITY ATTORNEY , BY: Contract of Sale RECEIPT OF AGREEMENT BY TITLE COMPANY By its execution below, Title Company acicnowledges receipt of an executed copy of this Contract. Title Company agrees to comply with, and be bound by, the terms and provisions of this Contract and to perform its duties pursuant to the provisions of this Contract and comply with Section 6045(e) of the Internal Revenue Code of 1986, as amended from time to time, and as further set forth in any regulations or forms promulgated thereunder. TITLE COMPANY: Title Resources, LLC 525 South Loop 288, Suite 125 Denton, Texas 76205 Telephone: (940) 3 81-1006 Telecopy: (940) 898-0121 : Printed Name: Title: Contract receipt date: , 2012 Contract of Sale EXHIBIT "A" to Contract of Sale rthur Sur�eying Co., I nc. �xofessinz��.�Y L�d Sux-v'�,g�oxs P.O. Box 54 � Lewisville, Texas 75067 Of�oe: (972) 221-9439 --- Fax: (972) 221-4675 EXHIBIT "A" MAYHILL ROAD RIGHT-OF-WAY PARCEL M116 1.198 Acres City of Denton, Denton Counfy, Texas BEING all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. Company Survey, Abstract Number 927, Denton County, Texas, and being part of that certa3n t�•act of land described by deed to Richard Moon and wife, Shu•ley Moon, recorded in Volume 479, Page 431, Deed Records, Denton County, Texas (D.R.D.C.T.), and being all that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 505, Page 216, D.R.D,C.T., and being more particularly described as follows: BEGINNING at a"PK" nail set in Mayhill Road for the northeast corner of said Moon tract (Vol, 505, Pg. 216), same point being in the east line of a traet of land described by deed to Leroy Barber and wife, Lucy Barber, recorded in Volume 465, Page 110, D,R.D.C.T.; THENCE South �2 degrees 35 minutes 02 seconds West, with the east line of said Moon tract (Vol. 505, Pg. 216) and with Mayhill Road, a distance of 98.00 feet to a"PK" nail set in Mayhill Road for the southeast comer of said Moon tract (Vol. 505, Pg. 216) and the northeast corner of said Moon tract (Vol. 479, Pg. 431); THENCE South 02 degrees 56 minutes 41 seconds West, with the east line of said Moon tract (Vol, 479, Pg. 431) and with Mayhill Road, a distance of 132.16 feet to a"PK" nail set in Mayhill Road for tha northeast corner of a tract of land described by deed to Ralph B. Bridgas, recorded in Volume 1716, Paga 548, D,R.D,C.T,, same point being in the east line of said Moon tract (Vol. 479, Pg. 431); THENCE South 89 degrees 27 minutes 31 seconds West,. over and across said Moon iract (Vol. 479, Pg. 431), with the north line of said Bridges ri•act, a distance of 308.00 feet to a 1/2 ineh 'vron rod with yellow cap stamped "A.rthur Surveying Company" {A5C) set for the northwest corner of said Bridges tract, same point being in the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of a tract of land described by deed to Ralph W. Bridges, recorded under County Clerk's File Number 97-9760, Real Froperty Records, Denton County, Texas; THENCE North 02 degrees 16 minutes 22 seconds �ast, with the west line of said Moon tract (Vol, 474, Pg, 431) and the east line of said Bridges tract (CC# 97-9760), a distance of 131,22 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the northwest comer of said Moon tract (Vol, 479, Pg. 431) and the southwest corner of said Barber lxact, same point being in the east line of a t�•act of land described by �deed to C.B. Wilson, recorded in Volume 690, Page 117, D.R.D.C.T.; THENCE North 89 degrees 18 minutes 02 seconds East, with the north line of said Moon tract (Vol. 479, Pg, 431) and the south line of saad Barber tract, a distance of 143,90 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the southwest corner of said Moon tract (Vol. 505, Pg. 216), same point being in the south line of said Barber tract and the north line of said Moon tract (Vol. 479, Pg. 431); (continued) C1107131-33 Parcel M116 EXHIBIT "A" to Contract of Sale r�hur Surveying Co., I nc. �ro�f'essian�.rY .�.an�d Sux°��,yor� P.O. Box 54 �• Lewisville, Texas 75067 Office: (972) 221-9439 -� Faa: (972) 221-4675 THENCE North 45 degrees 39 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distanca of 51,41 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENC� North 40 degrees 31 minutes 33 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg, 216), a distance of 67.16 feet to a 1/2 inc� 'v�on rod with yellow cap stamped "ASC" set for corner; THENCE North 75 degrees 37 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 48.92 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 88 degrees 40 minutes 02 seconds East, with the north Line of said Moon tract (Vol. 505, Pg. 216), a distance of 13.30 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 89 degrees 03 minutes 42 seconds East, with the north line of said Moon tract (Vol, 505, Pg. 216), a distance of 29.02 feet to the POINT OF BEGIi�TNING and containing 1.198 acres of land, of which 0. ] 50 acre lie within the existing Mayhill Road. �`�`ti C1 107 13 1-33 Pazcel M116 C.B. Wilson Volume 890, Pg. 117 EXHIBIT "B" to Contract of Sale Laroy Barber & wite, Lucy Barber Volume 486, 1'age 110 (remainder) L2 I.R.F. (C.M.)� � I�� , � � �M� �.� :� oM Z �I II li I� L3 � LS � n ' �„ � o w� 0 N iQ� 0 50 1�� SCALE: 1" = t00' Bearings shown hareon based on the City of Denton C'rIS Network. NOT�S: . I.R.F. = 5/8" Tron Rod Found I Riehard Moon�& �n � • I.R.5. = 1/2" Iron Rod Set with I.R.S. �o °p 'd yellaw cap stamped "Arthur � wife, Sh[rley M on � „ i ' N a Surveying Company N89°18'02"E L1 ! Volume 606, Pag� 218 �o �, . All improvements not shown hereon. i i� 143.90' � _ _ "PK" Nall ;� l.R,S. •�� - - — �et � W 1 � �� ry- 1 Richard Moon & �� b � T_�wife, Shirley Moon �.S lh N �� Votume 479, Page 4ai �`^ New Ri ght-of-wa y 1.048 ac. (45,63'7 sq. ft.) ry � (remainder) °i 1�`1 "' z � ^� �r� Existing Implied Dedication 0.150 ac. (6,536 sq. ft.) ' ' 1.198 Acres (52,173 sq. ft.) I.R.S. ��..�� ,.�� "PK" Nail Right-of-Way s89 2731 w 3os.00 set parcel M116 � ' � ��• 9?°� Ralph H. Hridges � Ralph W. Bridges �a�, �$ Volume 1718, Page 648 � I CC� 97-9780 Q� + I �� I P� c�, � � I � �' �x� �� ' �,� h � i o� � � y �oo � � ��Q��os°v��; ��°�� f�j�` �� o , a N89'36'02'W � ��(3L1�5 L.. AM�'�4�OBR sesoo 586.60� --.---------� �o��.o ��57 �� '9a�"�s -------- V �1��,�U ��e�' � "X" Fnd. (C.M.) a—• EXHIBIT "B" Ma yhill Road, Ri ht-of-T�ay Parcel M116 1.198 Acres M.E.P. & P.R.R. Co. Survey, Abstract Number 927 City of Denton Denton County, Texas -- 2012 -- LnvE xaBLE Ll N45°39'02"E 51.41' L2 N40°31'33 "E 67.16' L3 N75°37'02"E 48.92' IA� N88°40'02"E 13.30' LS N89°03'42"E 29.02' � y I�•� �� t rthur Surveying Co,, I nc. FinfessYVaat .La.ua surr.eyors P.O.Hog 84 - Lewiaville, Texae 75067 Office: (972) 221-9439 Fax: (972) 221-4876 Eatabliehed 1988 NOTICE OF CONFIDENTIALITY RIGHTS: IF YOU ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. SPECIAL WARRANTY DEED STATE OF TEXAS § COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS That Shirley F. Moon, individually and as Trustee of the Moon Family Living Revocable Trust (herein collectively called "Grantor"), for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00), and other good and valuable consideration to Grantor in hand paid by the City of Denton, Texas, a Texas Home Rule Municipal Corporation (herein called "Grantee"), 215 E. McKinney, Denton, Texas 76201, the receipt and sufficiency of which are hereby acknowledged and confessed, subject to the reservations set forth below, has GRANTED, SOLD and CONVEYED, and by these presents does GRANT, SELL and CONVEY, unto Grantee all the real property in Denton County, Texas being particularly described on Exhibit "A", and depicted on Exhibit "B", both attached hereto and made a part hereof for all purposes, and being located in Denton County, Texas, together with any and all rights or interests of Grantor in and to adjacent streets, alleys and rights of way and together with all and singular the improvements and fixtures thereon and all other rights and appurtenances thereto (collectively, the "Property"). Grantor, subject to the limitation of such reservation made herein, reserves, for themselves, their heirs, devisees, successors and assigns all oil, gas and other minerals in, on and under and that may be produced from the Property. Grantor, their heirs, devisees, successors and assigns shall not have the right to use or access the surface of the Property, in any way, manner or form, in connection with or related to the reserved oil, I I gas, and other minerals and/or related to exploration and/or production of the oil, gas and other minerals reserved herein, including without limitation, use or access of the surface of the Property for the location of any well or drill sites, well bores, whether vertical or any deviation from vertical, water wells, pit areas, seismic activities, tanks or tank batteries, pipelines, roads, electricity or other utility infrastructure, and/or for subjacent or lateral support for any surface facilities or well bores, or any other infrastructure or improvement of any kind or type in connection with or related to the reserved oil, gas and other minerals, and/or related to the exploration or production of same. As used herein, the term "minerals" shall include oil, gas and all associated hydrocarbons, and shall exclude (i) all substances (except oil, gas and all associated hydrocarbons) that any reasonable extraction, mining or other exploration and/or production method, operation, process or procedure would consume, deplete or destroy the surface of the Property; and (ii) all substances (except oil and gas) which are at or near the surface of the Property. The intent of the parties hereto is that the meaning of the term "minerals" as utilized herein, shall be in accordance with that set forth in Reed v. Wylie, 597 S.W.2d 743 (Tex. 1980). As used herein, the term "surface of the Property" shall include the area from the surface of the earth to a depth of five hundred feet (500') below the surface of the earth and all areas above the surface of the earth. This conveyance is subject to the following: 1. Easement executed by H.V. HENNEN to LONE STAR GAS COMPANY, a Texas Corporation filed August 24, 1925, recorded in Volume 199, page 616, Deed Records of Denton County, Texas. 2. Easement executed by W.H. BENTLEY and wife, MAYE A. BENTLEY to SINCLAIR REFINING COMPANY, a Maine Corporation filed December 20, 1947, recorded in Volume 341, Page 265, Deed Records of Denton County, Texas. As affected by Assignment to SINCLAIR PIPE LINE COMPANY, a Delaware corporation filed January 22, 1951, recorded in Volume 367, Page 242, Deed Records of Denton County, Texas and recorded in Volume 362, Page 524, Deed Records of Denton County, Texas. Contract of Sale Page 2 of 4 3. Easement executed by W.H. BENTLEY to LONE STAR GAS COMPANY, a Corporation filed May 27, 1955, recorded in Volume 410, Page 173, Deed Records of Denton County, Texas. Partial Release of Easement filed January 23, 1969, recorded in Volume 113, Page 130, Deed Records of Denton County, Texas. 4. Easement executed by CARL M. HAGGARD and wife, OLEVA HAGGARD to LONE STAR GAS COMPANY, a Corporation filed May 27, 1955, recorded in Volume 410, Page 177, Deed Records of Denton County, Texas. 5. Mineral lease granted by W.H. BENTLEY and wife, MRS. W.H. BENTLEY to MARTIN REAGON and ELDER DAVIS described in instrument filed April 5, 1937, recorded in Volume 264, Page 234, Deed Records of Denton County, Texas. 6. Mineral lease granted by CAR. M. HAGGARD and wife, OLEVA HAGGARD to STANDARD OIL COMPANY OF TEXAS described in instrument filed April 8, 1955, recorded in Volume 405, Page 451, Deed Records of Denton Count y, Texas. W.T. Evers Gas Unit No. 2 Declaration of Pool filed March 1, 1960, recorded in Volume 454, Page 189, Real Property Records of Denton County, Texas. Amendment to Declaration of Pool filed August 19, 1960, recorded in Volume 458, Page 647, Deed Records of Denton County, Texas. Release of Interests in Unitized Oil and Gas Production filed May 10, 1967, recorded in Volume 105, Page 569, Deed Records of Denton County, Texas. TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantee and Grantee's successors and assigns forever; and Grantor does hereby bind Grantor and Grantor's successors and assigns to WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee and Grantee's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof when the claim is by, through, or under Grantor but not otherwise. EXECUTED the ICJ day of , 2012 , mdividu Mey' Sh' ey F. M n, stee of Moon amily Livi Revocable st Contract of Sale Page 3 of 4 I it ACKNOWLEDGMENT THE STATE OF 14a.5 § COUNTY OF § This instrument was acknowledged before me on , 2012 by Shirley F. Moon. I-- - 9 Notary Public, State of Texas i [-X-A AS ~ My commission expires: T, r? 10- i 00-2.0 1 ACKNOWLEDGMENT THE STATE OF~ § COUNTY OF § i This instrument was acknowledged before me on ARV44~t LS , 2012 by Shirley F. Moon as Trustee of the Moon Family Living Revocab Trust. Notary Public, State of Texas i, , My commission expires: A .,J Upon Filing Return To: Send Tax Billing Statements To: The City of Denton-Engineering The City of Denton Attn: Paul Williamson Attn: Finance Department 901-A Texas Street 215 East McKinney Street Denton, TX 76209 Denton, Texas 76201 i Contract of Sale Page 4 of 4 rthur Surveying Co., Inc. ~x°o~ess~ori~Y ~,~a~,d <S~sz°~~yaaxs P.O. Box 54 Lewisville, Texas 75067 Office: (972) 221-9439 Fax: (972) 221-4675 EXHIBIT "A" MAYHILL ROAD RIGHT-OF-WAY PARCEL M116 1.198 Acres City of Denton, Denton County, Texas BEING all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. Company Survey, Abstract Number 927, Denton County, Texas, and being part of that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 479, Page 431, Deed Records, Denton County, Texas (D.R.D.C.T.), and being all that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 505, Page 216, D.R.D.C.T., and being more particularly described as follows: BEGINNING at a "PK' nail set in Mayhill Road for the northeast corner of said Moon tract (Vol. 505, Pg. 216), same point being in the east line of a tract of land described by deed to Leroy Barber and wife, Lucy Barber, recorded in Volume 465, Page 110, D.R.D.C.T.; THENCE South 02 degrees 35 minutes 02 seconds West, with the east line of said Moon tract (Vol. 505, Pg. 216) and with Mayhill Road, a distance of 98.00 feet to a "PK" nail set in Mayhill Road for the southeast corner of said Moon tract (Vol. 505, Pg. 216) and the northeast comer of said Moon tract (Vol. 479, Pg. 431); THENCE South 02 degrees 56 minutes 41 seconds West, with the east line of said Moon tract (Vol. 479, Pg. 431) and with Mayhill Road, a distance of 132.16 feet to a "PK" nail set in Mayhill Road for the northeast corner of a tract of land described by deed to Ralph B. Bridges, recorded in Volume 1716, Page 548, D.R.D.C.T., same point being in the east line of said Moon tract (Vol. 479, Pg. 431); THENCE South 89 degrees 27 minutes 31 seconds West, over and across said Moon tract (Vol. 479, Pg. 431), with the north lipe of said Bridges tract, a distance of 308.00 feet to a 1/2 inch iron rod with yellow cap stamped "Arthur Surveying Company" (ASC) set for the northwest comer of said Bridges tract, same point being in the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of a tract of land described by deed to Ralph W. Bridges, recorded under County Clerk's File Number 97-9760, Real Property Records, Denton County, Texas; THENCE North 02 degrees 16 minutes 22 seconds East, with the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of said Bridges tract (CC# 97-9760), a distance of 131.22 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the northwest corner of said Moon tract (Vol. 479, Pg. 431) and the southwest corner of said Barber tract, same point being in the east line of a tract of land described by deed to C.B. Wilson, recorded in Volume 690, Page 117, D.R.D.C.T.; THENCE North 89 degrees 18 minutes 02 seconds East, with the north line of said Moon tract (Vol. 479, Pg. 431) and the south line of said Barber tract, a distance of 143.90 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the southwest corner of said Moon tract (Vol. 505, Pg. 216), same point being in the south line of said Barber tract and the north line of said Moon tract (Vol. 479, Pg. 431); (continued) C1107131-33 Parcel M116 Arthur Surveying Co., Inc. ~a ®~~ss~eox~ X L..-zxi d Sux-~4eyc rs P.O. Box 54 Lewisville, Texas 75067 Office: (972) 221-9439 Fax: (972) 221-4675 THENCE North 45 degrees 39 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 51.41 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 40 degrees 31 minutes 33 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 67.16 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 75 degrees 37 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 48.92 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 88 degrees 40 minutes 02 seconds East, with the north line of said Moon tract (Vol. 505, Pg. 216), a distance of 13.30 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for comer; THENCE North 89 degrees 03 minutes 42 seconds East, with the north line of said Moon tract (Vol. 505, Pg. 216), a distance of 29.02 feet to the POINT OF BEGINNING and containing 1.198 acres of land, of which 0.150 acre lie within the existing Mayhill Road. AoP S . , C1107131-33 Parcel M116 Ili I.R.F. I N I I 3 I ~ Leroy Barber & ' o I wife, Lucy BarberM Volume 465, Page 110 (remainder) o 100 0 50 100 Dro!nage Easement Z I Vol. 5024, Pg. SB1 I C.B. 'Wilson I Vol. 5329, Pg. 2193 I I I Po O R SCALE: 1" = 100' 1 • • J,J • Bearings shown hereon based on the City of Volume 690, Pg. 117 I L3 L4 L5fi Denton GIS Network. % I PK" NOTES: TemPorar Construction Easement Nail • I.R.F. = 5/8" Iron Rod Found o!. 5024, Pg. ss1 1. R. S. 1,R, LR.S Set O~ . I.R.S. = 1/2" Iron Rod Set with Vol. 5329, Pg. 2193 L - "or I _ o/ yellow cap stamped"Arthur I L2 ~ loo w cd Surveying Company" Richard Moon h o n I.R.S. IM oo zy All improvements not shown hereon. wife, Shirley M on N CN Blanket easements recorded in Vol. N89018'02'E L;~ Volume 505, Pagg 216 ro 199, Pg. 616, Vol. 341, Pg. 265 143.901 "PK"Nail 50 assigned in Vol. 367, Pg. 242 & Vol. R. S. J~-- ~ - - - - .9 existing ggt 362, Pg. 524, Vol. 410, Pg. 173 I.R.S. budding 1 affected by Vol. 113, Pg. 130, Vol. p4 1 1 410, Pg. 177 include this tract. cv NNN 1 Richard Moon & existing I 1 ^ b ~I • Easements recorded in Vol. 316, Pg. N wife, Shirley Moon trailer y c ,o r~ e~-1 10, Vol. 398, Pg. 612 & Vol. 470, Pg. o MMV Volume 479, Page 431 I v k I a o 17 do not affect this tract to the best Z (remainder) 0 jb xisting ~1 0 j ~ of my knowledge. u ilding I , I.R.S. d'~r'~'~~ New Right-of-way 1.048 ac. (45,63 7 sq. ft.) S89°27'31 "W 308.00' PK" Nail Se Existing Implied Dedication 0.150 ac. (6,536 sq. ft.) Ralph W. Bridges I C)7" Ralph H. Bridges 1.198 Acres (52,173 sq. ft.) CC# 97-9760 {Q, ~ef Volume 1716, Page 548 , I Right-of-Way ' I Parcel M116 K LO C. I I JOHN nt -iSELL 401, I ~~~35~. `A• N8936'02'W I "X" Fnd. 586.60' (C.M.) 0---------------- SURVEYORS CERTIFICATION: EXHIBIT "B " L 1 N45LINE TABLE T undersigned thiTitle °39'02"E 51.41' Resources urces (G.F. No. 1026 102623) 3) that that this s survey was this day made on the ground of the property legally L2 N40°319YE 67.16' described hereon and is correct and to the best of Ma hill Road my knowledge, there are visible discrepancies, L3 N75°37'02 'E 48.92' conflicts, shortages in area, , boundary line conflicts, L4 N88°40'02"E 13.30' en~achments,overlapping ofimprovements, Right- of -Way L5 N89°0342"E 29.02' easementsoofexceptassho nherrebeenadvised of except as shown hereon. Parcel M116 1.198 Acres M.E.P. & P.R.R. Co. Survey, Arthur Surveying Co., Inc. Abstract Number 927 Professional rs,ria smVeyors City of Denton P.O.Box 54 - Lewisville, Texas 75067 Office: (972) 221-9439 Fax: (972) 221-4675 Denton County, Texas Established 1986 2012-- C1107131-33-Parcel M116 Denton County Cynthia Mitchell County Clerk Denton, TX 76202 ~a zoi z ooososse Instrument Number: 2012-90395 As Recorded On: August 15, 2012 Warranty Deed Parties: MOON FAMILY LIVING REVOCABLE TRUST Billable Pages: 8 To Number of Pages: 8 Comment: ( Parties listed above are for Clerks reference only ) Examined and Charged as Follows: Warranty Deed 44.00 Total Recording: 44.00 I DO NOT REMOVE. THIS PAGE IS PART OF THE INSTRUMENT Any provision herein which restricts the Sale, Rental or use of the described REAL PROPERTY because of color or race is invalid and unenforceable under federal law. File Information: Record and Return To: Document Number: 2012-90395 Receipt Number: 938901 TITLE RESOURCES Recorded Date/Time: August 15, 2012 03:34:16P WILL CALL DENTON TX 76202 User / Station: C Robinson - Cash Station 1 % THE STATE OF TEXAS} ours, COUNTY OF DENTON } I hereby certify that this instrument was FILED In the File Number sequence on the dateltime printed heron, and was duly RECORDED in the Official Records of Denton County, Texas. County Clerk je4C''~ Denton County, Texas LOU TITLE RESOURCES DATE : August 29, 2012 I I GF NO: 102623 TO : CITY OF DENTON, TEXAS-ENGINEERING DEPARTMENT 901-A TEXAS STREET ATTN: PAUL WILLIAMSON DENTON, Texas 76209 RE : Owner's Title Policy (Texas Form T-1) regarding the property described in the above referenced file as MEP & PRR CO. TR. 69,73, Abstract #927, Denton County, Texas and being commonly known as 1150 S MAYHILL ROAD, DENTON, TEXAS 76208 ("Property"). We are pleased to enclose an Owner's Title Policy No. 91143-8234 from TITLE RESOURCES GUARANTY COMPANY, issued in connection with the purchase of the property described in the Title Policy. The enclosed Title Policy is an important legal document, so please safeguard it with your other important papers. TITLE RESOURCES appreciates the opportunity to be of service to you and hope that you will remember us should you have a future need for the services of a title company. I Please call if you have any further questions or if we can be of further assistance. Thank you again for letting TITLE RESOURCES help you with the purchase of your property. Gail Green Policy Processor ORIGINAL gail@trnt.net MED C LSED Enclosure 525 South Loop 288 Suite #125 * Denton, Texas 76205 * Office (940) 381-1006 * Metro (940) 243-2913 * Fax (940) 898-0121 i I File No.: 102623 Policy No. 91143 - 8234 Premium: $913.50 OWNER'S POLICY OF TITLE INSURANCE Issued by Title Resources Guaranty Company Any notice of claim and any other notice or statement in writing required to be given the Company under this Policy must be given to the Company at the address shown in Section 18 of the Conditions. COVERED RISKS SUBJECT TO THE EXCLUSIONS FROM COVERAGE, THE EXCEPTIONS FROM COVERAGE CONTAINED IN SCHEDULE B AND THE CONDITIONS, TITLE RESOURCES GUARANTY COMPANY, a Texas corporation (the "Company") insures, as of Date of Policy and, to the extent stated in Covered Risks 9 and 10, after Date of Policy, against loss or damage, not exceeding the Amount of Insurance, sustained or incurred by the Insured by reason of: 1. Title being vested other than as stated in Schedule A. 2. Any defect in or lien or encumbrance on the Title. This Covered Risk includes but is not limited to insurance against loss from: (a) A defect in the Title caused by: (i) forgery, fraud, undue influence, duress, incompetency, incapacity or impersonation; (ii) failure of any person or Entity to have authorized a transfer or conveyance; (iii) a document affecting Title not properly created, executed, witnessed, sealed, acknowledged, notarized or delivered; (iv) failure to perform those acts necessary to create a document by electronic means authorized by law; (v) a document executed under a falsified, expired or otherwise invalid power of attorney; (vi) a document not properly filed, recorded or indexed in the Public Records including failure to perform those acts by electronic means authorized by law; or (vii) a defective judicial or administrative proceeding. (b) The lien of real estate taxes or assessments imposed on the Title by a governmental authority due or payable, but unpaid. (c) Any encroachment, encumbrance, violation, variation, or adverse circumstance affecting the Title that would be disclosed by an accurate and complete land survey of the Land. The term "encroachment" includes encroachments of existing improvements located on the Land onto adjoining land, and encroachments onto the Land of existing improvements located on adjoining land. (d) Any statutory or constitutional mechanic's, contractor's, or materialman's lien for labor or materials having its inception on or before Date of Policy. 3. Lack of good and indefeasible Title. 4. No right of access to and from the Land. 5. The violation or enforcement of any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting or relating to: (a) the occupancy, use or enjoyment of the Land; (b) the character, dimensions or location of any improvement erected on the Land; (c) subdivision of land; or (d) environmental protection if a notice, describing any part of the Land, is recorded in the Public Records setting forth the violation or intention to enforce, but only to the extent of the violation or enforcement referred to in that notice. 6. An enforcement action based on the exercise of a governmental police power not covered by Covered Risk 5 if a notice of the enforcement action, describing any part of the Land, is recorded in the Public Records, but only to the extent of the enforcement referred to in that notice. 7. The exercise of the rights of eminent domain if a notice of the exercise, describing any part of the Land, is recorded in the Public Records. 8. Any taking by a governmental body that has occurred and is binding on the rights of a purchaser for value without Knowledge. 9. Title being vested other than as stated in Schedule A or being defective: (a) as a result of the avoidance in whole or in part, or from a court order providing an alternative remedy, of a transfer of all or any part of the title to or any interest in the Land occurring prior to the transaction vesting Title as shown in Schedule A because that prior transfer constituted a fraudulent or preferential transfer under federal bankruptcy, state insolvency or similar creditors' rights laws; or (b) because the instrument of transfer vesting Title as shown in Schedule A constitutes a preferential transfer under federal bankruptcy, state insolvency or similar creditors' rights laws by reason of the failure of its recording in the Public Records: (1) to be timely, or (ii) to impart notice of its existence to a purchaser for value or a judgment or lien creditor. 10. Any defect in or lien or encumbrance on the Title or other matter included in Covered Risks 1 through 9 that has been created or attached or has been filed or recorded in the Public Records subsequent to Date of Policy and prior to the recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. The Company will also pay the costs, attorneys' fees and expenses incurred in defense of any matter insured against by this Policy, but only to the extent provided in the Conditions. any` cueti.I4 Title Resotirces Guaranly Company c L~_K c L By: P"~ 777 2Z- An71tp►1xi Re,' Executive Vice President 7 Nisi s P 625 S. Loop 69 Ste 126r~s Q~•#~napAdN~f1►TX 76205.4516 SecretaryForm T-1: Owner's PGn,y®N7bu.a.wo t. Ui Uac -,..y u. .0-GJ Effective 2/01/2040 TLTA T-1 OWNER'S POLICY (2/1/10) Policy No.: 91143-8234 TITLE RESOURCES GUARANTY COMPANY SCHEDULE A i Name and Address of Title Insurance Company: TITLE RESOURCES GUARANTY COMPANY File No.: 102623 Policy No.: 91143-8234 Amount of Insurance: $105,000.00 Premium: $913.50 Date of Policy: August 15, 2012 1. Name of Insured: j CITY OF DENTON, TEXAS, a Texas Home Rule Municipal Corporation 2. The estate or interest in the Land that is insured by this policy is: Fee Simple 3. Title is insured as vested in: CITY OF DENTON, TEXAS, a Texas Home Rule Municipal Corporation 4. The Land referred to in this policy is described as follows: I Being all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. COMPANY SURVEY, Abstract Number 927, Denton County, Texas, and being more particularly described on Exhibit "A" attached hereto and made a part hereof for all purposes. i i I I I File No.: 102623 Page 1 of 3 08 TLTA - T-1 Owner's Policy EXHIBIT "A" BEING all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. Company Survey, Abstract Number 927, Denton County, Texas, and being part of that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 479, Page 431, Deed Records, Denton County, Texas (D.R.D.C.T), and being all that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 505, Page 216, D.R.D.C.T., and being more particularly described as follows: BEGINNING at -a "PK" nail set in Mayhill Road for the northeast corner of said Moon tract (Vol. 505, Pg. 216), same point being in the east line of a tract of land described by deed to Leroy Barber and wife, Lucy Barber, recorded in Volume 465, Page 110, D.R.D.C.T.; THENCE South 02 degrees 35 minutes 02 seconds West, with the east line of said Moon tract (Vol. 505, Pg. 216) and with Mayhill Road, a distance of 98.00 feet to a "PK" nail set in Mayhill Road for the southeast comer of said Moon tract (Vol. 505, Pg. 216) and the northeast corner of said Moon tract (Vol. 479, Pg. 431); THENCE South 02 degrees 56 minutes 41 seconds West, with the east line of said Moon tract (Vol. 479, Pg. 431) and with Mayhill Road, a distance of 132.16 feet to a "PK" nail set in Mayhill Road for the northeast corner of a tract of land described by deed to Ralph B. Bridges, recorded in Volume 1716, Page 548, D.R.D.C.T., same point being in the east line of said Moon tract (Vol. 479, Pg. 431); THENCE South 89 degrees 27 minutes 31 seconds West, over and across said Moon tract (Vol. 479, Pg. 431), with the north line of said Bridges tract, a distance of 308.00 feet to a 1 /2 inch iron rod with yellow cap stamped "Arthur Surveying Company" (ASC) set for the northwest corner of said Bridges tract, same point being in the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of a tract of land described by deed to Ralph W. Bridges, recorded under County Clerk's File Number 97-9760, Real Property Records, Denton County, Texas; THENCE North 02 degrees 16 minutes 22 seconds East, with the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of said Bridges tract (CC# 97-9760), a distance of 131.22 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the northwest corner of said Moon tract (Vol. 479, Pg. 431) and the southwest corner of said Barber tract, same point being in the east line of a tract of land described by deed to C.B. Wilson, recorded in Volume 690, Page 117, D.R.D.C.T.; THENCE North 89 degrees 18 minutes 02 seconds East, with the north line of said Moon tract (Vol. 479, Pg. 431) and the south line of said Barber tract, a distance of 143.90 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the southwest corner of said Moon tract (Vol. 505, Pg. 216), same point being in the south line of said Barber bract and the north line of said Moon tract (Vol. 479, Pg. 431); THENCE North 45 degrees 39 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 51.41 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 40 degrees 31 minutes-33 seconds East, with the northwesterly fine of said Moon tract (Vol. 505, Pg. 216), a distance of 67.16 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 75 degrees 37 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 48.92 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 88 degrees 40 minutes 02 seconds East, with the north line of said Moon tract (Vol. 505, Pg. 216), a distance of 13.30 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 89 degrees 03 minutes 42 seconds East, with the north line of said Moon-tract (Vol. 505, Pg. 216), a distance of 29.02 feet to the POINT OF BEGINNING and containing 1.198 acres of land, of which 0.150 acre lie within the existing Mayhill Road. Note: The Company is prohibited from insuring the area or quantity of the land described herein. Any statement in the above legal description of the area or quantity of land is not a representation that such area or quantity is correct, but is made only for informational and/or identification purposes and does not override Item 2 of Schedule B hereof. TLTA T-1 OWNER'S POLICY (2/1/10) Policy No.: 91143-8234 TITLE RESOURCES GUARANTY COMPANY SCHEDULE B EXCEPTIONS FROM COVERAGE This policy does not insure against loss or damage (and the Company will not pay costs, attorneys' fees or expenses) that arise by reason of the terms and conditions of the leases and easements, if any shown in Schedule A, and the following matters: 1. The following restrictive covenants of record itemized below (the Company must either insert specific recording data or delete this exception): Item No. 1 is hereby deleted. 2. Shortages in area. 3. Homestead or community property or survivorship rights, if any, of any spouse of any Insured. 4. Any titles or rights asserted by anyone, including but not limited to, persons, the public, corporations, governments or other entities, a. to tidelands, or lands comprising the shores or beds of navigable or perennial rivers and streams, lakes, bays, gulfs or oceans, or b. to lands beyond the line of the harbor or bulkhead lines as established or changed by any government, or c. to filled-in lands, or artificial islands, or d. to statutory water rights, including riparian rights, or e. to the area extending from the line of mean low tide to the line of vegetation, or the right of access to that area or easement along and across that area. 5. Standby fees, taxes and assessments by any taxing authority for the year 2012, and subsequent years; and subsequent taxes and assessments by any taxing authority for prior years due to change in land usage or ownership, but not those taxes or assessments for prior years because of an exemption granted to a previous owner of the property under Section 11. 13, Texas Tax Code, or because of improvements not assessed for a previous tax year. 6. The following matters and all terms of the documents creating or offering evidence of the matters (The Company must insert matters or delete this exception): a. Easement executed by H.V. HENNEN to LONE STAR GAS COMPANY, a Texas Corporation filed August 24, 1925, recorded in Volume 199, page 616, Deed Records of Denton County, Texas.(Blanket Easement) b. Easement executed by W.H. BENTLEY and wife, MAYE A. BENTLEY to SINCLAIR REFINING COMPANY, a Maine Corporation filed December 20, 1947, recorded in Volume 341, Page 265, Deed Records of Denton County, Texas. As affected by Assignment to SINCLAIR PIPE LINE COMPANY, a Delaware corporation filed January 22, 1951, recorded in Volume 367, Page 242, Deed Records of Denton County, Texas and recorded in Volume 362, Page 524, Deed Records of Denton County, Texas. (Blanket Easement) c. Easement executed by W.H. BENTLEY to LONE STAR GAS COMPANY, a Corporation filed May 27, 1955, recorded in Volume 410, Page 173, Deed Records of Denton County, Texas. Partial Release of Easement filed January 23, 1969, recorded in Volume 113, Page 130, Deed Records of Denton County, Texas. File No.: 102623 Page 2 of 3 08 TLTA-T-1 Owner's Policy I TLTA T-1 OWNER'S POLICY (2/1/10) Policy No.: 91143-8234 d. Easement executed by CARL M. HAGGARD and wife, OLEVA HAGGARD to LONE STAR GAS COMPANY, a Corporation filed May 27, 1955, recorded in Volume 410, Page 177, Deed Records of Denton County, Texas.(Blanket Easement) e. Mineral lease granted by W.H. BENTLEY and wife, MRS. W.H. BENTLEY to MARTIN REGON and ELDER DAIVS described in instrument filed April 5, 1937, recorded in Volume 264, Page 234, Deed Records of Denton County, Texas. (Title to said interest not checked subsequent thereto.) f. Mineral lease granted by CA1NI. HAGGARD and wife, OLEVA HAGGARD to STANDARD OIL COMPANY OF TEXAS described in instrument filed April 8, 1955, recorded in Volume 405, Page 451, Deed Records of Denton County, Texas. W.T. Evers Gas Unit No. 2 Declaration of Pool filed March 1, 1960, recorded in Volume 454, Page 189, Real Property Records of Denton County, Texas. Amendment to Declaration of Pool filed August 19, 1960, recorded in Volume 458, Page 647, Deed Records of Denton County, Texas. Release of Interests in Unitized Oil and Gas Production filed May 10, 1967, recorded in Volume 105, Page 569, Deed Records of Denton County, Texas. (Title to said interest not checked subsequent thereto.) g. Mineral Estate and Interest described in instrument filed August 15, 2012, CC# 2012-90395, Real Property Records of Denton County, Texas. (Title to said interest not checked subsequent thereto.) I III i I File No.: 102623 Page 3 of 3 08 TLTA-T-1 Owner's Policy EXCLUSIONS FROM COVERAGE The following matters are expressly excluded from the coverage of this policy and the Company will not pay loss or damage, costs, attorneys' fees or expenses that arise by reason of: 1. (a) Any law, ordinance, permit, or governmental regulation (including those relating to building and zoning) restricting, regulating, prohibiting or relating to: (i) the occupancy, use, or enjoyment of the Land; (ii) the character, dimensions or location of any improvement erected on the Land; (iii) subdivision of land; or (iv) environmental protection; or the effect of any violation of these laws, ordinances or governmental regulations. This Exclusion 1(a) does not modify or limit the coverage provided under Covered Risk 5. (b) Any governmental police power. This Exclusion 1(b) does not modify or limit the coverage provided under Covered Risk 6. 2. Rights of eminent domain. This Exclusion does not modify or limit the coverage provided under Covered Risk 7 or 8. 3. Defects, liens, encumbrances, adverse claims or other matters: (a) created, suffered, assumed or agreed to by the Insured Claimant; (b) not Known to the Company, not recorded in the Public Records at Date of Policy, but Known to the Insured Claimant and not disclosed in writing to the Company by the Insured Claimant prior to the date the Insured Claimant became an Insured under this policy; (c) resulting in no loss or damage to the Insured Claimant; (d) attaching or created subsequent to Date of Policy (however, this does not modify or limit the coverage provided under Covered Risk 9 and 10); or (e) resulting in loss or damage that would not have been sustained if the Insured Claimant had paid value for the Title. 4. Any claim, by reason of the operation of federal bankruptcy, state insolvency, or similar creditors' rights laws, that the transaction vesting the Title as shown in Schedule A. is: (a) a fraudulent conveyance or fraudulent transfer; or (b) a preferential transfer for any reason not stated in Covered Risk 9 of this policy. 5. Any lien on the Title for real estate taxes or assessments imposed by governmental authority and created or attaching between Date of Policy and the date of recording of the deed or other instrument of transfer in the Public Records that vests Title as shown in Schedule A. 6. The refusal of any person to purchase, lease or lend money on the estate or interest covered hereby in the land described in Schedule A because of Unmarketable Title. CONDITIONS 1. DEFINITION OF TERMS. The following terms when used in this policy mean: (a) "Amount of Insurance": the amount stated in Schedule A, as may be increased or decreased by endorsement to this policy, increased by Section 8(b), or decreased by Sections 10 and 11 of these Conditions. (b) "Date of Policy": The date designated as "Date of Policy" in Schedule A. (c) "Entity": A corporation, partnership, trust, limited liability company or other similar legal entity. (d) "Insured": the Insured named in Schedule A. (i) The term "Insured" also includes: (A) successors to the Title of the Insured by operation of law as distinguished from purchase, including heirs, devisees, survivors, personal representatives or next of kin; (B) successors to an Insured by dissolution, merger, consolidation, distribution or reorganization; (C) successors to an Insured by its conversion to another kind of Entity; (D) a grantee of an Insured under a deed delivered without payment of actual valuable consideration conveying the Title; (1) If the stock, shares, memberships, or other equity interests of the grantee are wholly-owned by the named Insured, (2) If the grantee wholly owns the named Insured, (3) If the grantee is wholly-owned by an affiliated Entity of the named Insured, provided the affiliated Entity and the named Insured are both wholly- owned by the same person or Entity, or (4) If the grantee is a trustee or beneficiary of a trust created by a written instrument established by the Insured named in Schedule A for estate planning purposes. (ii) With regard to (A), (B), (C) and (D) reserving, however, all rights and defenses as to any successor that the Company would have had against any predecessor Insured. (e) "Insured Claimant": an Insured claiming loss or damage. (f) "Knowledge" or "Known": actual knowledge, not constructive knowledge or notice that may be imputed to an Insured by reason of the Public Records or any other records that impart constructive notice of matters affecting the Title. (g) "Land": the land described in Schedule A, and affixed improvements that by law constitute real property. The term "Land" does not include any property beyond the lines of the area described in Schedule A, nor any right, title, interest, estate or easement in abutting streets, roads, avenues, alleys, lanes, ways or waterways, but this does not modify or limit the extent that a right of access to and from the Land is insured by this policy. (h) "Mortgage": mortgage, deed of trust, trust deed, or other security instrument, including one evidenced by electronic means authorized by law. (i) "Public Records": records established under state statutes at Date of Policy for the purpose of imparting constructive notice of matters relating to real property to purchasers for value and without Knowledge. With respect to Covered Risk 5(d), "Public Records" shall also include environmental protection liens filed in the records of the clerk of the United States District Court for the district where the Land is located. Q) "Title": the estate or interest described in Schedule A. (k) "Unmarketable Title": Title affected by an alleged or apparent matter that would permit a prospective purchaser or lessee of the Title or lender on the Title to be released from the obligation to purchase, lease or lend if there is a contractual condition requiring the delivery of marketable title. 2. CONTINUATION OF INSURANCE. Form T-1: Owner's Policy of Title Insurance (For Use Only in Texas) Effective 2/01/2010 I The coverage of this policy shall continue in force as of Date of Policy in favor of an Insured, but only so long as the Insured retains an estate or interest in the Land, or holds an obligation secured by a purchase money Mortgage given by a purchaser from the Insured, or only so long as the Insured shall have liability by reason of warranties in any transfer or conveyance of the Title. This policy shall not continue in force in favor of any purchaser from the Insured of either (1) an estate or interest in the Land, or (ii) an obligation secured by a purchase money Mortgage given to the Insured. 3. NOTICE OF CLAIM TO BE GIVEN BY INSURED CLAIMANT. The Insured shall notify the Company promptly in writing (i) in case of any litigation as set forth in Section 5(a) below, or (ii) in case Knowledge shall come to an Insured hereunder of any claim of title or interest that is adverse to the Title, as insured, and that might cause loss or damage for which the Company may be liable by virtue of this policy. If the Company is prejudiced by the failure of the Insured Claimant to provide prompt notice, the Company's liability to the Insured Claimant under the policy shall be reduced to the extent of the prejudice. When, after the Date of the Policy, the Insured notifies the Company as required herein of a lien, encumbrance, adverse claim or other defect in Title insured by this policy that is not excluded or excepted from the coverage of this policy, the Company shall promptly investigate the charge to determine whether the lien, encumbrance, adverse claim or defect or other matter is valid and not barred by law or statute. The Company shall notify the Insured in writing, within a reasonable time, of its determination as to the validity or invalidity of the Insured's claim or charge under the policy. If the Company concludes that the lien, encumbrance, adverse claim or defect is not covered by this policy, or was otherwise addressed in the closing of the transaction in connection with which this policy was issued, the Company shall specifically advise the Insured of the reasons for its determination. If the Company concludes that the lien, encumbrance, adverse claim or defect is valid, the Company shall take one of the following actions: (i) institute the necessary proceedings to clear the lien, encumbrance, adverse claim or defect from the Title as insured; (ii) indemnify the Insured as provided in this policy; (iii) upon payment of appropriate premium and charges therefor, issue to the Insured Claimant or to a subsequent owner, mortgagee or holder of the estate or interest in the Land insured by this policy, a policy of title insurance without exception for the lien, encumbrance, adverse claim or defect, said policy to be in an amount equal to the current value of the Land or, if a loan policy, the amount of the loan; (iv) indemnify another title insurance company in connection with its issuance of a policy(ies) of title insurance without exception for the lien, encumbrance, adverse claim or defect; (v) secure a release or other document discharging the lien, encumbrance, adverse claim or defect; or (vi) undertake a combination of (i) through (v) herein. 4. PROOF OF LOSS. In the event the Company is unable to determine the amount of loss or damage, the Company may, at its option, require as a condition of payment that the Insured Claimant furnish a signed proof of loss. The proof of loss must describe the defect, lien, encumbrance or other matter insured against by this policy that constitutes the basis of loss or damage and shall state, to the extent possible, the basis of calculating the amount of the loss or damage. 5. DEFENSE AND PROSECUTION OF ACTIONS. (a) Upon written request by the Insured, and subject to the options contained in Sections 3 and 7 of these Conditions, the Company, at its own cost and without unreasonable delay, shall provide for the defense of an Insured in litigation in which any third party asserts a claim covered by this policy adverse to the Insured. This obligation is limited to only those stated causes of action alleging matters insured against by this policy. The Company shall have the right to select counsel of its choice (subject to the right of the Insured to object for reasonable cause) to represent the Insured as to those stated causes of action. It shall not be liable for and will not pay the fees of any other counsel. The Company will not pay any fees, costs or expenses incurred by the Insured in the defense of those causes of action that allege matters not insured against by this policy. (b) The Company shall have the right, in addition to the options contained in Sections 3 and 7, at its own cost, to institute and prosecute any action or proceeding or to do any other act that in its opinion may be necessary or desirable to establish the Title, as insured, or to prevent or reduce loss or damage to the Insured. The Company may take any appropriate action under the terms of this policy, whether or not it shall be liable to the Insured. The exercise of these rights shall not be an admission of liability or waiver of any provision of this policy. If the Company exercises its rights under this subsection, it must do so diligently. (c) Whenever the Company brings an action or asserts a defense as required or permitted by this policy, the Company may pursue the litigation to a final determination by a court of competent jurisdiction and it expressly reserves the right, in its sole discretion, to appeal from any adverse judgment or order. I 6. DUTY OF INSURED CLAIMANT TO COOPERATE. (a) In all cases where this policy permits or requires the Company to prosecute or provide for the defense of any action or proceeding and any appeals, the Insured shall secure to the Company the right to so prosecute or provide defense in the action or proceeding, including the right to use, at its option, the name of the Insured for this purpose. Whenever requested by the Company, the Insured, at the Company's expense, shall give the Company all reasonable aid (i) in securing evidence, obtaining witnesses, prosecuting or defending the action or proceeding, or effecting settlement, and (ii) in any other lawful act that in the opinion of the Company may be necessary or desirable to establish the Title or any other matter as insured. If the Company is prejudiced by the failure of the Insured to furnish the required cooperation, the Company's obligations to the Insured under the policy shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation, with regard to the matter or matters requiring such cooperation. (b) The Company may reasonably require the Insured Claimant to submit to examination under oath by any authorized representative of the Company and to produce for examination, inspection and copying, at such reasonable times and places as may be designated by the authorized representative of the Company, all records, in whatever medium maintained, including books, ledgers, checks, memoranda, correspondence, reports, e-mails, disks, tapes, and videos whether bearing a date before or after Date of Policy, that reasonably pertain to the loss or damage. Further, if requested by any authorized representative of the Company, the Insured Claimant shall grant its permission, in writing, for any authorized representative of the Company to examine, inspect and copy all of these records in the custody or control of a third party that reasonably pertain to the loss or damage. All information designated as confidential by the Insured Claimant provided to the Company pursuant to this Section shall not be disclosed to others unless, in the reasonable judgment of the Company, it is necessary in the administration of the claim. Failure of the Insured Claimant to submit for examination under oath, produce any reasonably requested information or grant permission to secure reasonably necessary information from third parties as required in this subsection, unless prohibited by law or governmental regulation, shall terminate any-liability of the Company under this policy as to that claim. (c) If the Insured demands that the Company accept a settlement offer that is not greater than the Amount of Insurance or if the Insured expressly agrees that a settlement offer should be accepted, the Company has a right to be reimbursed if it has timely asserted its reservation of rights and notified the Insured that it intends to seek reimbursement if it pays to settle or defend a claim that is not covered by the policy. 7. OPTIONS TO PAY OR OTHERWISE SETTLE CLAIMS; TERMINATION OF LIABILITY. I Form T-1: Owner's Policy of Title Insurance (For Use Only in Texas) Effective-2/0112010 In case of a claim under this policy, the Company shall have the following additional options: (a) To Pay or Tender Payment of the Amount of Insurance. To pay or tender payment of the Amount of Insurance under this policy together with any costs, attorneys' fees and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment or tender of payment and that the Company is obligated to pay. Upon the exercise by the Company of this option, all liability and obligations of the Company to the Insured under this policy, other than to make the payment required in this subsection, shall terminate, including any liability or obligation to defend, prosecute, or continue any litigation. (b) To Pay or Otherwise Settle With Parties Other than the Insured or With the Insured Claimant. (i) to pay or otherwise settle with other parties for or in the name of an Insured Claimant any claim insured against under this policy. In addition, the Company will pay any costs, attorneys' fees and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company is obligated to pay; or (ii) to pay or otherwise settle with the Insured Claimant the loss or damage provided for under this policy, together with any costs, attorneys' fees and expenses incurred by the Insured Claimant that were authorized by the Company up to the time of payment and that the Company Is obligated to pay. Upon the exercise by the Company of either of the options provided for in subsections (b)(i) or (ii), the Company's obligations to the Insured under this policy for the claimed loss or damage, other than the payments required to be made, shall terminate, including any liability or obligation to defend, prosecute or continue any litigation. 8. DETERMINATION AND EXTENT OF LIABILITY. This policy is a contract of indemnity against actual monetary loss or damage sustained or incurred by the Insured Claimant who has suffered loss or damage by reason of matters insured against by this policy. (a) The extent of liability of the Company for loss or damage under this policy shall not exceed the lesser of: (i) the Amount of Insurance; or (ii) the difference between the value of the Title as insured and the value of the Title subject to the risk insured against by this policy. (b) If the Company pursues its rights under Section 3 or 5 and is unsuccessful in establishing the Title, as insured, (!)the Amount of Insurance shall be increased by 10%, and (ii) the Insured Claimant shall have the right to have the loss or damage determined either as of the date the claim was made by the Insured Claimant or as of the date it is settled and paid. (c) In addition to the extent of liability under (a) and (b), the Company will also pay those costs, attorneys' fees and expenses incurred in accordance with Sections 5 and 7 of these Conditions. 9. LIMITATION OF LIABILITY. (a) If the Company establishes the Title, or removes the alleged defect, lien or encumbrance, or cures the lack of a right of access to or from the Land, all as insured, or takes action in accordance with Section 3 or 7, in a reasonably diligent manner by any method, including litigation and the completion of any appeals, it shall have fully performed its obligations with respect to that matter and shall not be liable for any loss or damage caused to the Insured. (b) In the event of any litigation, including litigation by the Company or with the Company's consent, the Company shall have no liability for loss or damage until there has been a final determination by a court of competent jurisdiction, and disposition of all appeals, adverse to the Title, as insured. (c) The Company shall not be liable for loss or damage to the Insured for liability voluntarily assumed by the Insured in settling any claim or suit without the prior written consent of the Company. 10. REDUCTION OF INSURANCE; REDUCTION OR TERMINATION OF LIABILITY. All payments under this policy, except payments made for costs, attorneys' fees and expenses, shall reduce the Amount of Insurance by the amount of the payment. 11. LIABILITY NONCUMULATIVE. The Amount of Insurance shall be reduced by any amount the Company pays under any policy insuring a Mortgage to which exception is taken in Schedule B or to which the Insured has agreed, assumed, or taken subject or which is executed by an Insured after Date of Policy and which is a charge or lien on the Title, and the amount so paid shall be deemed a payment to the Insured under this policy. 12. PAYMENT OF LOSS. When liability and the extent of loss or damage have been definitely fixed in accordance with these Conditions, the payment shall be made within 30 days. 13. RIGHTS OF RECOVERY UPON PAYMENT OR SETTLEMENT. (a) Whenever the Company shall have settled and paid a claim under this policy, it shall be subrogated and entitled to the rights of the Insured Claimant in the Title and all other rights and remedies in respect to the claim that the Insured Claimant has against any person or property, to the extent of the amount of any loss, costs, attorneys' fees and expenses paid by the Company. If requested by the Company, the Insured Claimant shall execute documents to evidence the transfer to the Company of these rights and remedies. The Insured Claimant shall permit the Company to sue, compromise or settle in the name of the Insured Claimant and to use the name of the Insured Claimant in any transaction or litigation involving these rights and remedies. If a payment on account of a claim does not fully cover the loss of the Insured Claimant, the Company shall defer the exercise of its right to recover until after the Insured Claimant shall have recovered its loss. (b) The Company's right of subrogation includes the rights of the Insured to indemnities, guaranties, other policies of insurance or bonds, notwithstanding any terms or conditions contained in those instruments that address subrogation rights. 14. ARBITRATION. Either the Company or the Insured may demand that the claim or controversy shall be submitted to arbitration pursuant to the Title Insurance Arbitration Rules of the American Land Title Association ("Rules"). Except as provided in the Rules, there shall be no joinder or consolidation with claims or controversies of other persons. Arbitrable matters may include, but are not limited to, any controversy or claim between the Company and the Insured arising out of or relating to this policy, any service in connection with its issuance or the breach of a policy provision, or to any other controversy or claim arising out of the transaction giving rise to this policy. All arbitrable matters when the Amount of Insurance is $2,000,000 or less shall be arbitrated at the option of either the Company or the Insured, unless the Insured is an individual person (as distinguished from an Entity). All arbitrable matters when the Amount of Insurance is in excess of $2,000,000 shall be arbitrated only when agreed to by both the Company and the Insured. Arbitration pursuant to this policy and under the Rules shall be binding upon the parties. Judgment upon the award rendered by the Arbitrator(s) may be - entered in any court of competent jurisdiction. 15. LIABILITY LIMITED TO THIS POLICY; POLICY ENTIRE CONTRACT. i I Form T-1: Owner's Policy of Title Insurance - (For Use Only.in-Texas) Effective 2/01/201.0 , I (a) This policy together with all endorsements, if any, attached to it by the Company is the entire policy and contract between the Insured and the Company. In interpreting any provision of this policy, this policy shall be construed as a whole. (b) Any claim of loss or damage that arises out of the status of the Title or by any action asserting such claim, shall be restricted to this policy. (c) Any amendment of or endorsement to this policy must be in writing and authenticated by an authorized person, or expressly incorporated by Schedule A of this policy. (d) Each endorsement to this policy issued at any time is made a part of this policy and is subject to all of its terms and provisions. Except as the endorsement expressly states, it does not (i) modify any of the terms and provisions of the policy, (ii) modify any prior endorsement, (iii) extend the Date of Policy or (iv) increase the Amount of Insurance. Each Commitment, endorsement or other form, or provision in the Schedules to this policy that refers to a term defined in Section 1 of the Conditions shall be deemed to refer to the term regardless of whether the term is capitalized in the Commitment, endorsement or other form, or Schedule. Each Commitment, endorsement or other form, or provision in the Schedules that refers to the Conditions and Stipulations shall be deemed to refer to the Conditions of this policy. 16. SEVERABILITY. In the event any provision of this policy, in whole or in part, is held invalid or unenforceable under applicable law, the policy shall be deemed not to include that provision or such part held to be invalid and all other provisions shall remain in full force and effect. 17. CHOICE OF.LAW; FORUM. (a) Choice of Law: The Insured acknowledges the Company has underwritten the risks covered by this policy and determined the premium charged therefor in reliance upon the law affecting interests in real property and applicable to the interpretation, rights, remedies or enforcement of policies of title insurance of the jurisdiction where the Land is located. Therefore, the court or an arbitrator shall apply the law of the jurisdiction where the Land is located to determine the validity of claims against the Title that are adverse to the Insured, and in interpreting and enforcing the terms of this policy. In neither case shall the court or arbitrator apply its conflicts of laws principles to determine the applicable law. (b) Choice of Forum: Any litigation or other proceeding brought by the Insured against the Company must be filed only in a state or federal court within the United States of America or its territories having appropriate jurisdiction. 18. NOTICES, WHERE SENT. Any notice of claim and any other notice or statement in writing required to be given the Company under this Policy must be given to the Company at 8111 LBJ Freeway, Suite 1200, Dallas, Texas 75251. III I Form T-1: Owner's Policy•of Title .lnsurance "(For Use Only in Texas): Effective 2/0112010 -i FT (6/2001) File No.: 102623 TITLE RESOURCES, LLC Privacy Policy Notice PURPOSE OF THIS NOTICE Title V of the Gramm-Leach-Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, from sharing nonpublic personal information about you with a nonaffiliated third party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this document, which notifies you of the privacy policies and practices of TITLE RESOURCES, LLC. ("TITLE RESOURCES"). We may collect nonpublic personal information about you from the following sources: • Information we receive from you, such as on applications or other forms. • Information about your transactions we secure from our files, or from our affiliates or others. • Information we receive from a consumer-reporting agency. • Information that we receive from others involved in your transaction, such as the real estate agent or lender. Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional nonpublic personal information will be collected about you. I, We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. We also may disclose this information about our customers or former customers to the following types of nonaffiliated companies that perform marketing services on our behalf or with whom we have joint marketing agreements: • Financial service providers such as companies engaged in banking, consumer finance, securities and insurance. • Non-financial companies such as envelope stuffers and other fulfillment service providers. WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY LAW. We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that. comply, with federal regulations to guard your _ nonpublic personal information. i FT (6/2001) File No. 102623 TITLE RESOURCES GUARANTY COMPANY Privacy Policy Notice PURPOSE OF THIS NOTICE Title V of the Gramm-Leach-Bliley Act (GLBA) generally prohibits any financial institution, directly or through its affiliates, from sharing nonpublic personal information about you with a nonaffiliated third party unless the institution provides you with a notice of its privacy policies and practices, such as the type of information that it collects about you and the categories of persons or entities to whom it may be disclosed. In compliance with the GLBA, we are providing you with this document, which notifies you of the privacy policies and practices of. We may collect nonpublic personal information about you from the following sources: • Information we receive from you, such as on applications or other forms. • Information about your transactions we secure from our files, or from our affiliates or others. • Information we receive from a consumer reporting agency. • Information that we receive from others involved in your transaction, such as the real estate agent or lender. I Unless it is specifically stated otherwise in an amended Privacy Policy Notice, no additional nonpublic personal information will be collected about you. We may disclose any of the above information that we collect about our customers or former customers to our affiliates or to nonaffiliated third parties as permitted by law. We also may disclose this information about our customers or former customers to the following types of nonaffiliated companies that perform marketing services on our behalf or with whom we have joint marketing agreements: • Financial service providers such as companies engaged in banking, consumer finance, securities and insurance. • Non-financial companies such as envelope stuffers and other fulfillment service providers. WE DO NOT DISCLOSE ANY NONPUBLIC PERSONAL INFORMATION ABOUT YOU WITH ANYONE FOR ANY PURPOSE THAT IS NOT SPECIFICALLY PERMITTED BY LAW. We restrict access to nonpublic personal information about you to those employees who need to know that information in order to provide products or services to you. We maintain physical, electronic, and procedural safeguards that comply with federal regulations to guard your nonpublic personal information. i G.F. Number 102623 IMPORTANT NOTICE To obtain information or make a complaint: 1. You may contact your title insurance agent at (940) 381-1006. 2. You may call TITLE RESOURCES GUARANTY COMPANY's toll-free telephone number for information or to make a complaint: (insert underwriter information). 3. You may also write to TITLE RESOURCES GUARANTY COMPANY at (insert underwriter information). 4. You may contact the Texas Department of Insurance to obtain information on companies, coverages, rights or complaints at 1-800-252-3439. 5. You may write the Texas Department of Insurance, P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@.tdi.state.tx.us PREMIUM OR CLAIM DISPUTES: Should you have a dispute concerning your premium or about a claim you should contact the title insurance agent first. If the dispute is not resolved, you may contact the Texas Department of Insurance. ATTACH THIS NOTICE TO YOUR POLICY: This notice is for information only and does not become a part or condition of the attached document. AVISO IMPORTANTE Para obtener informacion o pars someter una queja: 1. Puede comunicarse con su agente de seguro de titulo al (940) 381-1006. 2. Usted puede Ilamar al numero de telefono gratis de TITLE RESOURCES GUARANTY COMPANY's para informacion o para someter una queja al (insert underwriter information). 3. Usted tambien puede escribir a TITLE RESOURCES GUARANTY COMPANY: (insert underwriter information). 4. Puede comunicarse con el Departamento de Seguros de Texas para obtener informacion acerca de companias, coberturas, derechos o quejas al: 1-800-252-3439 5. Puede escribir al Departamento de Seguros de Texas: P.O. Box 149104 Austin, TX 78714-9104 Fax: (512) 475-1771 Web: http://www.tdi.state.tx.us E-mail: ConsumerProtection@tdi.state.tx.us DISPUTAS SOBRE PRIMAS O RECLAMOS: Si tiene una disputa concerniente a su prima o a un reclamo, debe comunicarse con el agente de seguro de titulo primero. Si no se resuelve la disputa, puede entonces comunicarse con el departamento (TDI). UNA ESTE AVISO A SU POLIZA: Este aviso es solo para proposito de informacion y no se convierte en parte o condicion del documento adjunto. i II G) EXHIBIT "C" to Contract of Sale NOTICE OF CONFIDENTIALITY RIGHTS: IF Y�U ARE A NATURAL PERSON, YOU MAY REMOVE OR STRIKE ANY OR ALL OF THE FOLLOWING INFORMATION FROM ANY INSTRUMENT THAT TRANSFERS AN INTEREST IN REAL PROPERTY BEFORE IT IS FILED FOR RECORD IN THE PUBLIC RECORDS: YOUR SOCIAL SECURITY NUMBER OR YOUR DRIVER'S LICENSE NUMBER. SPECIAL WARRANTY DEED STATE OF TEXAS § COUNTY OF DENTON § KNOW ALL MEN BY THESE PRESENTS That Shirley F. Moon, individually and as Trustee of the Moon Family Living Revocable Trust (herein collectively called "Grantor"), for and in consideration of the sum of TEN AND NO/100 DOLLARS ($10.00), and other good and valuable consideration to Grantor in hand paid by the City of Denton, Texas, a Texas Home Rule Municipal Corporation (herein called "Grantee"), 215 E. McKinney, Denton, Texas 76201, the receipt and sufficiency of which are hereby acknowledged and confessed, subject to the reservations set forth below, has GRANTED, SOLD and CONVEYED, and by these presents does GRANT, SELL and CONVEY, unto Grantee all the real property in Denton County, Texas being particularly described on Exhibit "A", and depicted on Exhibit "B", both attached hereto and made a part hereof for all purposes, and being located in Denton County, Texas, together with any and all rights or interests of Crrantor in and to adjacent streets, alleys and rights of way and together with all and singular the improvements and fixtures thereon and all other rights and appurtenances thereto (collectively, the "Property"). Grantor, subject to the limitation of such reservation made herein, reserves, for Contract of Sale themselves, their heirs, devisees, successors and assigns all oil, gas and other minerals in, on and under and that may be produced from the Property. Grantor, their heirs, devisees, successors and assigns shall not have the right to use or access the surface of the Property, in any way, manner or form, in connection with or related to the reserved oil, gas, and other minerals and/or related to exploration and/or production of the oil, gas and other minerals reserved herein, including without limitation, use or access of the surface of the Property for the location of any well or drill sites, well bores, whether vertical or any deviation from vertical, water wells, pit areas, seismic activities, tanlcs or tank batteries, pipelines, roads, electricity or other utility infrastructure, and/or for subj acent or lateral support for any surface facilities or well bores, or any other infrastructure or improvement of any kind or type in connection with or related to the reserved oil, gas and other minerals, and/or related to the exploration or production of same. As used herein, the term "minerals" shall include oil, gas and all associated hydrocarbons, and sha11 exclude (i) all substances (except oil, gas and all associated hydrocarbons) that any reasonable extraction, mining or other exploration and/or production method, operation, process or procedure would consume, deplete or destroy the surface of the Property; and (ii) all substances (except oil and gas) which are at or near the surface of the Property. The intent of the parties hereto is that the meaning of the term "minerals" as utilized herein, shall be in accordance with that set forth in Reed v. Wylie, 597 S.W.2d 743 (Tex. 1980). As used herein, the term "surface of the Property" shall include the area from the surface of the earth to a depth of five hundred feet (500') below the surface of the earth and a11 areas above the surface of the earth. This conveyance is subject to the following: [Insert Permitted Exceptions, if any] TO HAVE AND TO HOLD the Property, together with all and singular the rights and appurtenances thereto in anywise belonging unto Grantee and Grantee's successors Contract of Sale and assigns forever; and Grantor does hereby bind Grantor and Grantor's successors and assigns to WARRANT AND FOREVER DEFEND all and singular the Property unto Grantee and Grantee's successors and assigns, against every person whomsoever lawfully claiming or to claim the same or any part thereof when the claim is by, through, or under Grantor but not otherwise. EXECUTED the day of , 2012 Shirley F. Moon, individually Shirley F. Moon, Trustee of the Moon Family Living Revocable Trust ACKNOWLEDGMENT THE STATE OF § COUNTY OF § This instrument was acknowledged before me on , 2012 by Shirley F. Moon. Notary Public, State of Texas My commission expires: ACKNOWLEDGMENT THE STATE OF § COUNTY OF § This instrument was acknowledged before me on , 2012 by Shirley F. Moon as Trustee of the Moon Family Living Revocable Trust. Notary Public, State of Texas My commission expires: Contract of Sale Upon Filing Return To: The City of Denton-Engineering Attn: Paul Williamson 901-A Texas Street Denton, TX 76209 Contract of 3ale Send Tax Billing Statements To: The City of Denton Attn: Finance Department 215 East McKinney Street Denton, Texas 76201 EXHIBIT "A" to Special Warranty Deed rthur Sur�reying Co., I nc. Pxof�esszox�e�Y .L,�ed Sux°ve.�'oxs P.p. Boa 54 � Lewisville, TexAS 75067 Ofiice: (972) 221-9439 -� FA�.: (972) 221-4675 EXHII3TT "A" MAYHILL ROAD RIGHT-OF-'WAY PARCEL M116 1.1�8 Acres City of Denton, Denton County, Texas B�IN'G all that certain lot, tract or parcel of land situated in the M.E.P. & P.R.R. Company Survey, Abstract Number 927, Denton County, Texas, and being part of that certain tract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 479, Page 431, Deed Records, Denton County, Texas (D.R.D.C.T.), and being all that cei�tain iract of land described by deed to Richard Moon and wife, Shirley Moon, recorded in Volume 505, Page 216, D.R.D.C.T,, and being more particularly described as follows: BEGINNING at a"PK" nail set in Mayhill Road for the northeast corner of said Moon tract (Vol, 505, Pg. 216), same point being in the east line of a tract of land described by deed to Leroy Barber and wife, Lucy Barbex, recorded in Volume 465, Page 110, D.R.D.C.T.; THENCE South 02 degrees 35 minutes 02 seconds West, with the east line of said Moon tract (Vol. 505, Pg. 216) and with Mayhill Road, a distance of 98.00 feet to a"PK" nail set in Mayhill Road for the southeast corner of said Moon ixact (Vol. 505, Pg. 216) and the northeast corner of said Moon tract (Vol. 479, Pg. 431); THENCE South 02 degrees 56 minutes 41 seconds West, with the east line of said Moon tract (Vol. 479, Pg. 431) and with Mayhill Road, a distance of 132.16 feet to a"PK" nail set in Mayhill Road for the northeast corner o� a tract of land described by deed to Ralph B, Bridges, recarded in Volume 1716, Page 548, D.R.D,C.T., same point being in the east line of said Moon tract (Vol. 479, Pg. 431); THENCE South 89 degrees 27 minutes 31 seconds West,. over and across said Moon tract (Vo1. 479, Pg. 431), with the north line of said Bridges n�act, a distance of 308.00 feet to a 1/2 ineh iron rod with yellow cap stamped "Aithur Surveying Company" (ASC) set foc the northwest corner of said Bridges tract, same point being in the west line of said Moon tract (Vol. 479, Pg. 431) and the east line of a tract of land described by deed to Ralph W. Bridges, recorded under County Clerk's File Number 97-9760, Real Froperty Records, Denton County, Texas; THENCE North 02 degrees 16 minutes 22 seconds East, with the west line of said Moon tract (Vol, 479, Pg. 431) and the east line o£ said Bridges tract (CC# 97-9760), a distance of 131,22 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the northwest coiner of said Moon tract (Vol, 479, Pg. 431) and the southwest corner of said Barber tract, same point being in the east line of a hact of land described by �deed to C.B. Wilson, recorded in Volume 690, Paga 117, D,R,D.C.T.; THENCE North 89 degrees 18 minutes 02 seconds East, with the north line of said Moon tract (Vol. 479, Pg. 431) and the south line of said Barber tract, a distance of 143,90 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for the southwest corner of said Moon tract (Vol, 505, Pg. 216), same point being in the south line of said Barber tract and the north line of said Moon tract (Vol. 479, Pg, 431); (continued) C1107131-33 Parcel M116 EXHIBIT "A" to Special Warranty Deed � r�hur Surveying Co., I nc. Fro�'�ss.i�acs�.Y L��d SuxQr�,�ors P.O_ Box 54 � Lewisville, Texas 75067 Of£ce: (972) 221-9439 --- Faa: (972) 221-4675 THENCE North 45 degrees 39 minutes 02 seconds East, with the northwesterly line of said Moon t�act (Vol. 505, Pg. 216), a distance of 51,41 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; T�3ENCE North 40 degrees 31 minutes 33 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 67.16 feet to a 1/2 inch iron rod with yellovv cap stamped "ASC" set for corner; THENCE North 75 degrees 37 minutes 02 seconds East, with the northwesterly line of said Moon tract (Vol. 505, Pg. 216), a distance of 48.92 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 88 degrees 40 minutes 02 seconds East, with the north line of said Moon tract (Vol. 505, Pg. 216), a distance of 13.30 feet to a 1/2 inch iron rod with yellow cap stamped "ASC" set for corner; THENCE North 89 degrees 03 minutes 42 seconds East, with the north line of said Moon tract (Vol. 505, Pg. 216), a distance of 29.02 feet to the POINT OF .BEGINNING and containing 1.198 acres of land, of which 0.150 acre lie within the existing Mayhill Road. �`.� C1107131-33 Pazcel M116 I I I I i i C.H. Wilsnn I Volume 890, Pg. 117 I i � i t I.R.S. _ � ' .- 'r 0 o "' z 1. R. S. ( �EXHIBIT "B" to Special Warranty Deed Leroy Harber & arife, Lucy Barber Volume 466, Page 110 (remainder) I.R.F. (C, M.) Q 1 � II 3 � I � M � d�^ � OM z ii i II I� I� L3 � LS ^ l. R, S, �. R. S. L2 � 1. R. S. � � Richard Moon & . I.R.S� �fe, Shirley M on N89°18'02"E Ll� voiume 606, Pag 218 143.90' � "PK" Na� il ��w��—__'-----.' f . 1.R.S. � a .� I Riohard Moon & A i wtfe, 3hirley Moon � .� Volume 479, Pe e 431 (remainder� � � � --'�---z�'31 � w 3os.-----� � ��. ,�� I � Ralph W. Br[dges � 9 Relph H. Brtdgee � CC� 97-9780 �� Volume 1718, Page 548 � I �q� � � �y �� I ` �" C� � I I �,�'�� r�n , A1�(�'` .�y � ,'^„ n �gi)9 I Mf� �� I � I I I 1 � N89'3S'02'W i "X„ Fnd. 586,60' _ _ J (Ca ) ---------�/'—�------ � EXHIB IT "B " Mayhill Road Ri ht-of-Way Parcel M116 1.198 Acres M.E.P. & P.R.R. Co. Survey, Abstract Number 927 City of Denton Denton County, Texas -- 2012 -- K" 9 �I o w a�' 0 � ro � � � � � 100 0 50 100 SCALE; 1"= 100' Bearings shown hereon based on the City of Denton GIS Network. NOTES: • I.R.F. = 5/8" Tron Rod Found • I.R.S. = 1/2" Iron Rod Set with yellow cap stamped "Arthur Surveying Company" • All improvements not shown hereon. C�O ~ � o � �-+ New Right-of-way 1.048 ac. (45,637 sq. ft.) ��xisting Implied Dedication 0.150 ac. (6,536 sq, ft.) 1.198 Acres (s2,173 sq. ft.) ��P Set o�� Right-of-Way Parcel M116 LINE TABLE LI N45°39'02"E 51.41' L2 N40°31'33"E 67.16' L3 N75°37'02"E 48.92' L4 N88°40'02"E 13.30' L5 I�89°03'42"E 29.02' �� e @'� vg� ��°a6�� oo� 3eoae�.e..��11.�0�,,.. g.oe< �C�L.A5 L. Ai�TO�UR 000��o��.,.e�3�v� � t,.o, �� , ��Ci._„ � (.3 � �. �, I��' �� rthur Surveying Co., Inc. ��S�o�r �a s�•e,y� P,O.Hog 84 – Lewiaville, Tesas 75067 Office: (972) 221-9439 Fax: (972) 221-487G Eatablished 1988 ------------------------------------------------ ------------------------------------------------ DECLARATION OF TRUST made as of �c>N -c (D 2001 by RICHARD L. MOON and SHIRLEY E MOON Grantors and RICHARD L. MOON and S�RLEY F. MOON Trustees Name Of Trust: MOON FAMILY LIVING REVOCASLE TRUST, datedu��G 2001 ARTICLE FIRST SECOND THIRD FOURTH FIFTH SIXTH SEVENTH EIGHTH NINTH TENTH TABLE OF CONTENTS TITLE IDENTIFICATION BENEFICIAItiES AND DISTRIBUTIONS SURVIVING GRANTOR'S TRUST MARITAL TRUST FAMII�Y TRUST TRUSTEE APPOINTMENTS ADNIINISTRATIVE PROVI5IONS TRUSTEE PROVISIONS CONTINGENT TRUSTS NIISCELLAI�TEOUS PROVISIONS THE STATE OF TEXAS § § COUNTY OF DENTON § �� THIS TRUST AGREEMENT is entered into on �cJ�vE �o , 2001, between RICHARD L. MOON (the "Husband") and SHIRLEY F. MOON (the "Wife"), of Denton County, Texas, as Grantors (the "Grantors"), and RICHARD L. MOON and SHIRLEY F. MOON, of Denton County, Texas, as initial Co-Trustees (the "Trustee"). WITNES SETH: The Crrantors desire to create a trust to be held, administered and distributed in accordance withthe provisions ofthis Trust Agreement. Accordingly, the Crrantors have transferred to the Trustee, and the Trustee acknowledges receipt from the Grantors of the sum of one dollar in cash. This property, 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 bythe 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 "MOON FAMILY LIVING REVOCABLE TRUST." ARTICLE I - IDENTIFICATION The Grantors have three children, their sons, RICHARD A. MOON, JOEL B. MOON, and HAROLD N. MOON. All references in this Trust Agreement to the "Grantors' sons" are to them. ARTICLE II - BENEFICIARIES AND DISTRIBUTIONS A. Character of Propertv. Property transferred to this trust which consists of the Grantors' community property (hereinafter referred to as the "Community Estate") shall retain its character as community property and shall be accounted for separately by the Trustees so that it can be returned to the Grantors as their community property if this instrument is completely or partially revoked. The powers of the Trustee over the Community Estate sha11 be no more extensive than those possessed from time to time by either Grantor over the Grantors' community property. Property transferred to this trust which consists of a Grantor's separate property (hereinafter referred to as such Grantor's "Separate Estate") shall retain its character as separate property and shall be accounted for separately by the Trustee so that it can be returned to such Grantor as his or her separate property if this instrument is completely or partially revolced. B. 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 Grantors in such amounts as the Grantors may direct. All trust net income not otherwise appointed by the Grantors shall be accumulated and invested. C. Distributions If Either Grantor Incapacitated. In the eventthat one or both of the Grantors become severely ill, incapacitated ar unable to communicate with the Trustee, as determined by a licensed physician in writing or by the Trustee in the Trustee's absolute and uncontrolled judgment (or by the successor Trustee named herein), then the Trustee shall distribute such amounts of income and principal of the trust created by this Article for the comfort, health, support, maintenance or other needs of the Grantors as the Trustee shall determine, in the Trustee's absolute and uncontrolled discretion, to be necessary or appropriate to maintain the Grantors in accordance with the Grantors' accustomed standard of living at the time of the execution of this Trust Agreement. D. Termination. Following the death of the first Grantor to die, the Trustee shall _ divide all of the then remaining trust property into two separate shares, which may be unequal in value. One of such shares shall initially contain that portion of the trust property which constitutes a one-half interest in the Community Estate and that portion of the trust property that constitutes all of the Separate Estate of the survivmg Grantor (heremafter referred to as the "surviving Grantor") and for purposes of this Article shall be known as the "surviving Grantor's share." Following the death of the first Grantor to die, the surviving Grantor's share (including any additions pursuant to Article II, Section E) shall be distributed by the Trustee of this trust to the Surviving Grantor's Trust created under Article III hereof to be held, administered and distributed for the benefit of the surviving Grantor as provided therein. The other share shall initially contain that portion of the trust property which constitutes a one-half interest in the Comrnunity Bstate and that portion of the trust property that constitutes all of the Separate Estate of the deceased Grantor (hereinafter referred to as the "deceased Grantor") and for purposes of this Article, shall be knov�n as the "deceased Grantor's share." E. Additions Following Death of Deceased Grantor. The Trustee shall add to the deceased Grantor's share all property which was owned by the deceased Grantor and which is received by the Trustee under the deceased Grantor's Will, under this Trust Agreement or otherwise. In addition, 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 a Grantor) which are payable to the Trustee hereunder shall be allocated as follows: that portion of such payments and proceeds which represents the community and/or separate property of the surviving Grantor shall be allocated to the surviving Grantor's share and that portion of such payments and proceeds which represents the comrnunity and/or separate property of the deceased Grantor shall be allocated to the deceased Grantor's share. F. Survivorshin Provisions. For purposes of this Trust Agreement, including the marital deduction gift to the trust created under Article IV, no person shall be presumed to have survived a Grantor if such person should die within 90 days of such Grantor's death. G. Distributions Upon Termination. Following the death of the deceased Grantor and following any additions to the deceased Grantor's share under Article II, Section F, the Trustee shall distribute the personal property listed on the deceased Crrantor's Exhibit "A" as therein directed and all of the rernainder of the deceased Grantor's share as follows: (a) The Trustee shall transfer from the deceased Grantor's share to thP trust created under Article IV such an amount of property as will be equal to the maximum marital deduction (allowable under Section 2056 of the Code in determining the Federal estate tax on the deceased Grantor's gross estate) d'uninished by the value for Federal estate tax purposes of all other items in the deceased Grantor's gross estate which qualify for the marital deduction and which pass or have passed to the surviving Grantor under other provisions of this Trust Agreement, under the deceased Crrantor's Will or otherwise; provided, however, this gift shall be reduced by an amount, if any, needed to increase the deceased Grantor's t�able estate as determined for Federal estate tax purposes to the largest amount which, after taking into account all other deductions allowed to the deceased Grantor's estate for federal estate tax purposes and all allowable credits; will result in the least amount of Federal estate tax being imposed on the deceased Grantor's estate. However, any state death tax credit shall only be taken into account to the extent it does not increase the amount of tax payable to any state. In making the computations necessary to determine the amount of this gift, the final determinations of the Federal estate tax proceedings of the deceased Grantor's estate shall control. The Trustee shall transfer to the trust created under Article IV pursuant to this Section only those properties in the deceased Grazltor's share which qualify for the marital deduction and shall value each such property at the date of its distribution to such trust. The gift to the trust under Article IV far the benefit of the surviving Grantor as set forth in this subsection (a) is intended to entitle the deceased Grantor's estate to the unlimited marital deduction (except as limited above). Any provision in this Trust Agreement which may conflict with or fail to satisfy these intentions shall either be disregarded or else shall be reconciled or amplifiedto accomplish this objective. References inthis subsection to "marital deduction" are to the deduction allowed under Section 2056 of the Code or under any corresponding statute hereinafter in effect. (b) The Trustee shall transfer from the deceased Grantor's share to the Family Trust created under Article V the property which remains after the transfers provided in subsection (a) above, to be held and adxninistered in accordance with the provisions of that Article. The Trustee shall pay from the property transferred to the Family Trust the difference between all taxes which must be paid by reason of the deceased Grantor's death and those taxes which would be payable by reason of the deceased Grantor's death had such property not been includable in the deceased Grantor's gross estate for the purpose of calculating such taxes. The Trustee, in such Trustee's discretion, may pay from such property all or any part of the deceased Grantor's funeral expenses, claims which are legally enforceable against the deceased Grantor's estate (including estate and inheritance taxes) and reasonable expenses of administration of the deceased Grantor's estate, but the Trustee shall not make any such payments that are not in the best interest of the surviving Grantor. The Trustee may make such payments directly or may pay over the amounts thereof to the duly qualified executor of the deceased Grantor's estate. Written statements by the executor of the deceased 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 under no duty to see to the application of any such payments. ARTICLE III - SURVIVING GR.ANTOR'S TRUST A. Distributions. The Trustee shall hold, manage, sell, exchange, invest and reinvest the trust property of the trust created by this Article, collect all income and, after deducting such expenses as are properly payable, shall accumulate and distribute the income and principal as provided in this Article. The trust created by this Article shall be known as the "Surviving Grantor's Trust." While the surviving Grantor is living, the Trustee shall distribute the income and principal of the Surviving Grantor's Trust to the surviving Grantor in such amounts as the surviving Grantor may direct. All trust income not otherwise appointed by the surviving Grantor shall be accumulated and invested. B. Distributions If Surviving Grantor Incapacitated. In the event that the surviving Grantor becomes severely ill, incapacitated or unable to communicate with the Trustee, as determined by a licensed physician in writing or by the Trustee in the Trustee's absolute and uncontrolled judgment (or if the surviving Grantor is serving as Trustee, by the successor named herein), then the Trustee shall distribute such amounts of income and principal of the surviving Grantor's Trust for the comfort, health, support, maintenance or other needs of the surviving Grantor as the Trustee shall deternune, in the Trustee's absolute and uncontrolled discretion, to be necessary or appropriate to maintain the surviving Grantor in accordance with the surviving Grantor's accustomed standard of living at the time of the death of the deceased Grantor. C. Payments Upon Death of Survivin� Grantor. Following the death of the surviving Grantor, the Trustee of the Surviving Grantor's Trust shall pay from the income and principal of such trust the difference between all taxes which must be paid by reason of the surviving Grantor's death and those taxes which would be payable by reason of the surviving Grantor's death had such trust property not been includable in the surviving Grantor's gross estate for the purpose of calculating such taxes. The Trustee, in such Trustee's discretion, may pay from such trust all or any part of the surviving Grantor's funeral expenses, claims which are legally enforceable against the surviving Grantor's estate (including estate and inheritance taxes) and reasonable expenses of administration of the surviving Grantor's estate, but such Trustee shall not make any such payments 3 that are not in the best interests of any person having a beneficial interest in the remaining property of such trust upon termination. The Trustee may make such payments directly or may pay over the j' amounts thereof to the duly qualified executor of such surviving Grantor's estate. Written statements by the executor of the surviving Grantor's estate of the sums that may be paid under this Section shall be sufficient evidence of thei� amounts, and the Trustee shall be under no duty to see to the application of any such payments. D. Additions Followin� Death of Surviving Grantor. Following the death of the surviving Grantor, the Trustee shall add to the Surviving Grantor's Trust all property which was owned by the surviving Grantor and which is received by such Trustee under the surviving Grantor's Will and all non-probate assets (which sha11 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 surviving Grantor) which are payable to the Trustee hereunder. E. T'ermination. Nine months after the death of the surviving Grantor, the trust created by this Article shall terminate. Upon such termination, the personal property listed on the surviving Grantor's Exhibit "A" shall be distributed as therein directed and the remaining principal of the trust created by this Article shall, if the trust created by Article V does not terminate upon the death of the surviving Grantor, be added to the principal and administered as a part of the trust created by Article V, or if the trust created by Article V terminates upon the death of the surviving Grantor, the remaining principal of the trust created by this Article sha11 be distributed per stirpes, as follows: 33 1/3% to RICHARD A. MOON, Grantor's son, 33 1/3% to JOEL B. MOON, Grantor's son, and 33 1/3% to HA120LD N.IVIOON, Grantor's son; provided, however, if no descendant of the surviving Grantor survives the surviving Grantor, such remaining principal shall be distributed to the heirs of the Husband and the Wife, with one-half of such property being distributed to the heirs of each. ARTICLE IV - MARITAL TRUST A. Disclaimer. The surviving Grantor, acting alone and without the joinder of any other person, may disclaim all or any part of the gift t� the trust created by this Article and the portion of any such gift so disclaimed, if any, shall be allocated to the trust created by Article V; provided, however, any such disclaimer shall be made within the time and evidenced in the manner provided by law for disclaimers of outright gifts. The Trustee shall hold the property transferred to this trust as a single trust for the sole benefit of the surviving Grantor. The trust created by this Article shall be known as the "MOQN MARITAL TRUST." B. Distributions. The Trustee shall distribute the net income of the trust created under this Article to the surviving Grantor at least quarterly. The Trustee shall also distribute to the surviving Grantor such amounts of trust principal of the trust created under this Article as are necessary, when added to the funds reasonably available to the surviving Grantor from all other sources known to the Trustee (excluding the trust created by Article V) to provide for the surviving Grantor's health, support, maintenance and education in order to maintain the surviving Grantor liberally in accordance with the standard of living to which the surviving Grantor was accustomed at the time of the deceased Grantor's death. During the surviving Grantor's lifetime, no portion of the trust under this Article shall be distributed to any person other than the surviving Grantor. The surviving Grantor shall have the power to require that any unproductive property in the trust under this Article be converted into productive property within a reasonable time. C. Power of A�pointment. The surviving Grantor shall have the special testamentary power to appoint (outright, in trust or otherwise) all or any part of the principal of the trust created under this Article to any one or more of the deceased Grantor`s descendants or to any charity or charities; provided however, such power shall be exercisable only by specific reference in the surviving Grantor's Will. � D. Payments Upon Death of Surviving Grantor. Unless the surviving Grantor directs otherwise in the surviving Grantor's Will, upon the death of the surviving Grantor, the Trustee shall pay from the unappointed principal of the trust created under this Article in the manner set forth below the difference between all taxes which must be pa.id by reason of the surviving Grantor's death and those taxes which would be payable by reason of the surviving Grantor's death had such unappointed principal not been includable in the surviving Grantor's gross estate for the purpose of calculating such taxes. The Trustee, in the Trustee's discretion, may pay from such unappointed principal all or any part of the surviving Grantor's funeral expenses, claims which are legally enforceable against the surviving Grantor's estate (including estate and inheritance taxes) and reasonable expenses of administration of the surviving Grantor's estate, but the Trustee shall nbt riyalce any such payments that are not in the best interests of any person having a beneficial interest in the remaining unappointed principal of such trust upon tertnination. The Trustee shall make any payments required by this Section first from the trust, if any, which is subject to the generation skipping transfer tax under Chapter 13 of the Code and, if such trust is insufficient, then any excess shall be paid from the remaining assets of any other trust administered under this Article. The Trustee may make such payments directly or may pay over the amounts to the duly qualified executor of the surviving Grantor's estate. Written statements by the executor of the surviving Grantor's estate of the sums that may be paid under this S'ection shall be sufficient evidence of their amounts and the Trustee shall be under no duty to see to the application of any such payments. E. Termination. The trust created under this Article shall terminate upon the death of the surviving Grantor. Upon termination, the personal property listed on the surviving Grantor's Exhibit "A" shall be distributed as therein directed, and any accrued but unpaid net income of such trust shall be distributed to the surviving Grantor's estate. The remaining unappointed principal of the trust created by this Article shall, if the trust created by Article V does not terminate upon the death of the surviving Grantor, be added to the principal and administered as a part of the trust created by Article V, or if the trust created by Article V terminates upon the death of the surviving Grantor, the remaining unappointed principal of the trust created by this Article shall be distributed per stirpes, as follows: 331/3% to RICHARD A. MOON, Grantor's son, 331/3% to JOEL B. MOON, Grantor's son, and 33 1/3% to HAROLD N. MOON, Grantor's son; provided, however, if no descendant of the deceased iJranior is then living, such remaining principal shall be distributed to the heirs of the Husband and the Wife, with one-half of such property being distributed to the heirs of each. ARTICLE V - FAMILY TRUST A. A�plicabilitv. The Trustee shall hold the properry transferred to this trust as a single trust for the primary benefit of the surviving Grantor. The trust created by this Article shall be known as the "MOON FAMILY TRUST." B. Distributions. The Trustee shall distribute to the surviving Grantor such amounts of the income and principal of the trust created by this Article as are necessary, when added to the funds reasonably available to the surviving Grantor from all other sources known to the Trustee (which shall include, but not be limited to, the trust created by Article N), to provide for the surviving Grantor's health, support, maintenance and education, taking into consideration the surviving Grantor's age, education and station in life. In addition, the Trustee, in the Trustee's discretion, may distribute to any one or more of the deceased Grantor's descendants such amounts of the income and principal of the trust created by this Article as are necessary, when added to the funds reasonably available to the deceased Grantor's descendants from all other sources known to the Trustee, to provide for their health, support, maintenance and education, taking into consideration their age, education and station in life. The Grantors desire that each of their descendants be afforded the opportunity to obtain as complete an education, including attendance at graduate, professional and special trade schools, as such descendants may reasonably desire and be qualified to obtain. C. Special Power of Apnointment. The surviving Grantor shall have the special power to appoint (outright, in trust or otherwise) all or any part of the income and principal of the trust created by this Article to any one or more of the deceased Grantor's descendants or to any charity or charities. Such power shall be exercisable by acknowledged instruments delivered to the Trustee during the surviving Grantor's lifetime or by specific reference in the surviving Grantor's Will. D. Termination. This trust shall terminate wheri the surviving Grantor dies. Upon termination, the personal property listed on the surviving Grantor's Exhibit "A" shall be distributed as therein directed, and the remaining unappointed trust property shall be distributed per stirpes, as follows: 33 1/3% to RICHARD A. MOON, Grantor's son, 33 1/3% to JOEL B. MOON, Grantor's. son, and 33 1/3 % to HAROLD N. MOQN, Grantor's son; provided, however, if no descendant of the Grantors is then living, such remaining unappointed trust property shall be distributed to the heirs of the Husband and the Wife, with one-half of such property being distributed to the heirs of each. ARTICLE VI - TRUSTEE APPOINTMENTS A. Successor Trustee. If both RICHARD L. MOON and SHIRLEY F. MOON fail to serve or cease to serve as Co-Trustees of a trust created under this Trust Agreement and the Grantors fail to appoint a successor Trustee within 60 days as provided in Article VI, Section D, then HAROLD N. MOON and JOEL B. MOON shall become Co-Trustees of such trust. B. Removal of Trustee Under Articles II and III. Prior to the death of the deceased Grantor, the Grantors (acting jointly) may at any time or from time to time remove the Trustee of the trust created under Article II, 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. After ihe death of the deceased Grantor, the surviving Grantor may at any time or from time to time remove the Trustee of the trust created by Article III of this Trust Agreement, 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. C. Removal of Trustee Under Articles IV and V. The surviving Grantor may at any time remove the Trustee of any trust created by Articles IV or V, 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. D. Re�i�natior� of Trusiee. 1-�ny Trustee may resign by giving notice to the Grantors, while they or either of them is living, and thereafter to the Beneficiary or V�ard of such trust. While either of the Grantors is living, if the trusteeship of any trust should become vacant for- any reason, and 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, in succession, by the Husband and Wife (acting j omtly, or by the surviving Grantor acting alone) for a period of 60 days, and by the Grantors' sons (acting by majority, or by the survivor acting alone) for an additiona130 days should both the Husband and the Wife fail timely to appoint a successor. After the death of both Grantors, if the trusteeship of a trust should become vacant for any reason, and 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 a maj ority of the adult beneficiaries or the Ward of such trust for a period of 90 days. If no successor Trustee has otherwise been appointed within 90 days of such vacancy or such notice of resignation, then upon written request of any interested party, any judge of Denton County, Texas, acting as an individual and not in any judicial capacity, shall have the power to appoint a successor. E. Expenses and Compensation. Every Trustee shall be reimbursed for the reasonable costs and expenses incurred in connection with such Trustee's duties. No Trustee shall receive any compensation for serving under this Trust Agreement. _ 6 _ F. 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 thereof, the power to appoint an ancillary Trustee for such property (as well as any successor ancillary Trustee) shall be exercisable by the Grantors acting �ointly, or the surviving Grantor acting alone, or by the Trustee if the Grantors are both not living or are both not competent to act. An ancillary Trustee appointed pursuant to this Section may be an individual or corporate Trustee. G. Uneconomical Trusts. With regard to any trust created by this Trust Agreement, if in the opinion of a corporate Trustee (named and eligible to serve or already serving) it is or becomes uneconomical for such Trustee to serve or continue to serve because of the size of such trust, then if a Co-Trustee is serving it may resign or refuse to serve, or if no Co-Trustee is serving, such Trustee may resign or refuse to serve and appoint an alternate or successor Trustee. Furthermore, after the death of the last to die of the Grantors, if such corporate Trustee is serving and such trust has a net asset value (on the boolcs of such Trustee) less than the amount that would have had the same purchasing power as $100,000 had on the Janua.ry 1 st following the date of this Trust Agreement (based on the U.S. Consumer Price Index for All Urban Consumers applicable to Dallas, Texas), such corporate Trustee may terminate such trust by complete distribution to the Ward of such trust. H. "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 provided in this Trust Agreement, if two or more Trustees are named or serving hereunder and any one or more, but not all, decline or cease to serve for any reason, then the remaining Trustee or Co-Trustees, as the case may be, shall continue to serve in such capacity. In all matters relating to each trust created under this Trust Agreement, the decision of a majority of the Trustees then serving shall control. Any writing signed by the persons whose decision shall control shall be valid and effective for all purposes as if signed by all such Trustees. I. "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 $10,000,000 (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 c�rporate 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 sha11 contain the acceptance of the corporate Trustee so appointed evidenced on it. If a corporate Trustee is serving as a Co-Trustee, it sha11 have exclusive custody of the properties, books and records of the trust as to which it is serving, but shall inalce such properties, books and records available for inspection and copying by every other Trustee of such irust. ARTICLE VII - ADMINISTRATIVE PROVISIONS A. Revocation While Soth Grantors Livin . While both of the Grantors are living, either Grantor may revoke the trust created under Article II in whole or in part as to any part of such Grantor's share of the Community Estate and such Grantor's respective Separate Estate. If the trust created under Article II is revoked as to the Community Estate, the assets of the Community Estate (or the revoked portion) shall be distributed to the Grantors as community property, and if such trust is revoked as to a Grantor's Separate Estate, the assets of such Grantor's Separate Estate (or the revoked portion) shall be distributed to such Grantor as his or her separate property. While 7 both of the Grantors are living, this Trust Agreement may be amended only by the Grantors acting jointly, provided, however, each of the Grantor's reserves the right to direct the distribution of said ' Grantor's personal property by executing their Exhibit "A" attached to this Agreement. B. Revocation�y Survivin� Grantor. Afterthe death ofthe deceased Grantor, then except for the Surviving Grantor's Trust created under Article III and the surviving Grantor's Exhibit "A", the trusts created under this Trust Agreement shall become irrevocable, and the surviving Grantor shall thereafter be without power to revoke or amend any of the provisions of such trusts. With regaxd to the Surviving Grantor's Trust created under Article III, the surviving Grantor may revoke or amend such trust in whole or in part, and if the Surviving Grantor's Trust created under Article III is revoked, its assets (or the revoked portion) shall be distributed to the surviving Grantor. C. Formalitv of Revocation or Amendment. Any revocation or amendment made pursuant to this Article shall be made by acknowledged instrument delivered to.the Trustee and, while both Grantors are living and if only one Grantor is exercising the power of revocation as to the trust created under Article II, also delivered to the other Crrantor. D. Right To Use Principal Residence. The Grantors shall have the right to use and occupy residential property owned by the trust created hereunder as the Grantors' principal residence rent free and without charge until the death of the last to die of both Grantors or until this Trust Agreement is revoked or terminated, whichever occurs first. Further, any such properiy (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 Grantors' intentions to qualify such property as the Grantors' residential homestead for ad valorem tax purposes by causing the trust which owns such property to be a "qualifying trust" as defined and described in Section 11.13(j) ofthe Texas Tax Code. This intention shall be overriding and sha11 control if it conflicts with the literal language of this section. E. Mer�er of Trusts. If after the death of the last to die of the Grantors, any trust created under this Trust Agreement has the same beneficiaries, the same Trustees and substantially similar terms to any other trust created by the Grantors, and the Trustee determines, in such Trustee's discretion, that it is more economical or desirable to combine such trusts into a single trust, then the Trustee may combine such trusts at any time, without any liability or obligation to any beneficiary thereof (whether a direct or contingent beneficiary). In no event shall a person who is a Trustee and who is also a beneficiary have the authority to combine any trust created by this Trust Agreement with any trust over which such person holds a general power of appointment as defined in Section 2041 of the Code. F. 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 Grantors, the descendants of the Husbands' parents, the descendants of the , Wife's parents and the descendants of the Grantors who are living at the time of the execution of this Trust Agreement, and upon such termination the remaining property of each such trust shall be distributed to the Beneficiary thereof. If the Trustee at any time merges and administers as one trust any trust or trusts created hereunder and any trust or trusts under any other instrument, such merged trust shall not continue beyond the date on which either of such trusts would, without regard to such merger, have been required to expire under the rule against perpetuities or other applicable law governing the maximum duration of trusts. If any trust or trusts (including a merged 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 or Ward thereof. G. QTIP Election. The Trustee of the trust created by Article II sha11 do all things necessary in order to assist the deceased Grantor's executor in malcing the election to have the property passing to the trust created in Article IV qualify as "qualified terminable interest properly" _�_ pursuant to the provisions of Section 2056(b)(7) of the Code, unless or to the extent the survivi�g Grantor (or his or her executor, if he or she is legally incompetent or deceased) requests in writing, - prior to the due date of the deceased Grantor's Federal estate tax return, that such election not be ' made. The Trustee shall not make any adjustments in the inierests of any beneficiaries as the result of any such election and shall incur no liability far assisting the deceased Grantor's executor in making such election. H. Support Obligation. Notwithstanding anything to the contrary in this Trust Agreement, the Trustee, other than a.n 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. I. Allocation of GST Exemption. The Trustee, in the Trustee's discretion, may assist the executor of the estate of either of the Grantors in allocating any remaining portion of such Grantor's GST exemption amount to any property as to which such Grantor is the transferor, including any property transferred by such Grantor during life as to which such Grantor did not make an allocation prior to such 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 tmder 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)(1) 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 VIII - TRUSTEE PROVISIONS A. Powers. The Trustee shall have all of the powers conferred upon trustees by the Texas Trust Code, and by any axnendments to the Texas Trust Code or any corresponding statute, except for any uistance in whieh the Texas Trust Code or any such other statutory provisions may conflict with the express provisions of this Trust Agreement, in which case the express provisions of this Trust Agreement shall control. In addition to such powers, the Trustee is specifically authorized: (1) To refain, in the absolute and uncontrolled discretion of the Trustee without duty to diversify investments, any property transferred to the Trustee by the Grantors or any other person, including securities of any corporate Trustee, 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 instrument) 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 each of the trust estates in any l�ind of property whatsoever, real or personal (including oil, gas and other mineral leases, royalties, overriding royalties and other interests), whether or not productive of income and without regard to the proportion that such property or property of a similar character - held may beaa• to the entire trust estate; provided, however, that the Grantors may L•� 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 Grantors 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 tlie assets of any trust, and to delegate to said manager investment discretion and such appointrnent shall include the power to acquire and dispose of such asse#s; 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 cariy 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 purpose of exercising any such option, right or privilege; and to vote any stock which may be held in the trusts; (7) To enter into any iransaction 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 instrument is also a trustee; (ii) an estate of which any Trustee under this instrument is also an executor or administrator; (iii) a business or trust controlled by any Trustee under this instrument 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 Grantors, any other beneficiary or any Trustee under this instrument acting individually; (8) To make, in the Trustee's absolute and uncontrolled discretion, any distribution required or permitted to be mad� to any beneficiary under any trust established by this trust instrument, in any of the following ways when such beneficiary is a minor or a person who is incapacitated in the absolute and uncontrolled judgment of the Trustee by reason of legal incapacity or physical or mental illness or infirmity: (i) to such beneficiary directly; (ii) to the guardian of such beneficiary's person or estate; (iii) by utilizing the same, directly and without the interposition of any guardian, for the health, support, maintenance, or education of such beneficiary; (iv) to a person or financial institution serving as Custodian for such minor beneficiary under the Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act of any state; or (v) by reimbursing the person who is actually taking care of such beneficiary (even though such person is not the legal guaxdian) for expenditures made by such person for the benefit of such beneficiary; 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 either of the Grantors at its fair market value and to retain any properiy so acquired without liability for depreciation or loss occasioned by such purchase and retention; 10 (10) To lend money to the testamentary estate of either of the Grantors upon adequate security and for adequate interest; (11) To invest the trust assets in any life insurance policy or policies (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 make divisions or distributions in rnoney or in kind, or partly in each, whenever required or permitted to divide or distribute all or any part of any trust; and, in making any such division or distributions, the judgment of the Trustee in the selection and valuation of the assets to be so divided or distributed shall be binding and conclusive; and, further, the Trustee shall be authorized to malce distributions from the trusts created by this Trust Agreement on a non-pro rata basis; (13) To release, in the absolute and uncontrolled discretion of the Trustee, anv fiduciarv nower at anv time, in whole or in part, temporarilv or permanentiv, wnenever tne i rusiee may aeem ii aavisanie, oy an msirument in writing execuiea ana acknowledged by the Trustee; (14) To invest and reinvest all or part of the assets of any trust in any common trust fund of any corporate Trustee; (15) To continue any business (whether a proprietorship, corporation, partnership, limited partnership or other business entity) which n�ay 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 ta the continuance, management, saie 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; (16) To execute lease, pooling or unitization agreements (including agreements of such nature extending beyond the terms of the trusts) with respect to any mineral or royalty interest held or acquired by the trusts; to drill or contract for the drilling of wells for oil, gas or other minerals; to make dry hole or bottom hole contributions; to enter into any operating agreements with reference to any mineral leases or properties held or acquired by the trusts; and generally, with reference to oil, gas and other mineral properties and operations, to enter into such agreements and to do all such other things (whether or not presently recognized as common or proper practice by those engaged in the business of prospecting for, developing, producing, processing, transporting or marketing oil, gas or other minerals) as the Trustee may deem to be advantageous; (17) To determine, in the discretion of the Trustee, the allocation or apportionment of all receipts and disbursements between income and principal, including whether or not (a11d to what extent) to establish reserves for depreciation or depletion. In exercising this discretion, the Trustee may consider the provisions of the Texas Trust Code but shall not be bound by those provisions; 11 (18) 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; (19) To hold stock in any corporation which has elected to be taxed as an S corporation (as defined in Section 1361(a) of the Code) in a separate trust (referred to herein as an "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: (i) such primary beneficiary shall be sole beneficiary of the S corparation trust created for him or her under this subsection, and no income or principal shall be distributed to any person other than the primary beneficiary; (ii) 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 sha11 be distributed to such primary beneficiary's estate; (iii) such amounts of the principal of the S corporation trust as are necessary for the reasonable health, support, maintenance and education of the primary beneficiary shall be distributed to such primary beneficiary; (iv) each S corporation trust created under this subsection shall terminate in accordance with the termination provisions of the trust from which the S corporation stock was set aside and, upon such ternunation, all of the remaining principal of such S corporation trust shall be distributed in the same manner as the remaining principal of the trust from which the S corporation stocic was set aside; (v) the election under Section 1361(d)(2) of the Code shall be made in the manner and within the time required by said Section; (vi) such S corporation stock sha11 be set aside within the time period prescribed by Section 1361(c) of the Code. Any trust established by this subsection is intended to constitute a qualified subchapter S trust, as defined in Section 1361(d)(3) 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; and (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. B. Inspection. All properties, books of account and records of each trust shall be made available for inspection at all times during nortnal business hours by the Grantors, or by any person or persons designated by the Grantors. The Trustee shall furnish written statements (which shall be deemed correct and binding one year after receipt) at least annually showing the itemized receipts and disbursements of income and principal of each trust, and otherwise reflecting its condition, to the Grantors. C. Notice to Fiduciaries. Any notice required or permitted to be given by or to a Trustee acting under this Trust Agreement must be given by acicnowledged instrument actually delivered to the person or Trustee to whom it is required or permitted to be given. Any notice required or permitted.to be given to a minor or an incompetent shall be given to such minor's parents 12 �' or guardian or to such incompetent's guardian. 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 or an incompetent shall be taken by such minor's parent or guardian or by such incompetent's guardian. D. Acts of Prior Trustees. Each Trustee shall be relieved of any duty to exainine 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, sha11 be vested with all of the estates, titles, rights, powers, duties, immunities and discretions granted to the prior Trustee. E. Reliance on Legal Opinion. In acting or declining to act, each Trustee may rely upon the written opinion of a competent attomey, any facts stated in any instrument in writing and believed true or any other evidence deemed sufficient. Each Trustee shall be saved harmless from any liability for any action taken, or for the failure to take any action, if done in good faith and without gross negligence. F. 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. G. Undistributed Income. At the end of the accounting year of a trust where the income is not required to be distributed, any undistributed income sha11 be added to principal; provided, however, any distributions from 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 IX - CONTINGENT TRUSTS A. Applicabilitv. Any share of trust property that is to be distributed to RICHARD A. MOON shall be held in a special need trust. Said trust shall comply with all the rules and regulations then in effect for the agency providia�g support for RICHARD A. MOQN. Any share of trust property that is to be distributed to a person who is under age 25 or who is, in the discretion of the Trustee, incapacitated by reason of legal incapacity or physical or mental illness or infirmity (such person is referred to as the "Ward"), shall be held by the Trustee as a separate trust for the benefit of such Ward. B. Disiributians. The Trustee shall utilize such amounts of the income and principal of the Ward's trust as the Trustee, in the Trustee's discretion, deems desirable from time to time to provide for the Ward's health, support, maintenance or education, directly and without the interposition of any guardian; provided, however, the Trustee may distribute to the Ward all or any part of the income of such trust as the Trustee deems desirable, without regard to any standard or other sources of support. C. Termination. Each trust created by this Article for a Ward who is under age 25 shall terminate when such Waxd attains that age. Each trust created by this Article for a person who is incapacitated shall terminate when the Ward of such trust, in the discretion of the Trustee, is legally, mentally and physically capable of receiving the outright ownership of the property of such trust. Upon the termination of a trust created by this Article, the remaining property of such trust shall be distributed to the Ward of such trust, but if a Ward dies before the termination of such Ward's trust, then upon such Ward's death the remaining properry of such trust shall be distributed to such Ward's estate. 13 ARTICLE X - MISCELLANEOUS PROVISIONS A. Additions To Trust. The Grantors, 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 becorne a part of any trust hereby created and, subj ect 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. B. Power of Ap�ointment. Notwithstanding anything to the contrary contained in this Trust Agreement, the special power of appointment granted to any person under this Trust Agreement shall not be exercisable in favor of such person, such person's creditors, such person's estate or the creditors of such person's estate. The exercise of any special power of appointment by any holder thereof shall supersede the power of the Trustee over #he trust property so appointed; provided, however, the exercise of such power shall not affect any distributions of trust property previously made by the Trustee. C. Spendthrift Provisions. Prior to the actual receipt of trust property by any beneficiary, no properry (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 atternpted transfer or encumbrance of any interest in such property by any beneficiary hereunder prior to distribution shall be void. D. Inclusian Ratio and GST Exemntion Amount. References to "inclusion ratio" shall have the same meaning as that term is defined in Section 2642(a) of the Code. References to a Grantor's "GST exemption amount" shall be the maximum amount of the Grantor's GST exemption, as defined in Section 2631 of the Code, ava.ilable to such Grantor and such Crrantor's estate at the time of such Grantor's death, after taking into account all allocations of such Grantor's GST exemption made by such Grantor pursuant to Section 2632(a) ofthe Code during such Grantor's lifetime, all deemed allocations to any direct skips (as defined in Section 2632(b)(1) of the Code) made by such Grantor during such Grantor's lifetime and to any direct skips occurring at such Grantor's death. In satisfying any distributions of such Grantor's GST exemptian amaunt, the Trustee may malce distributions in cash or in kind, or partly in each and shall value each such propertS.� at the date of its distribution. E. 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 Agreemeni, descendants who have been conceived at any specific point in time relevant to such provision and who thereafter survive birth; and provided, further, except as hereinafter provided in this Section, an adopted child and such adopted child's lineal descendants by blood or adoption sha11 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, except that any person who is adopted after reaching the age of fourteen and any person who is a lineal descendant (whether by blood or adoption) of such person who is adopted after reaching the age of fourteen shall specifically not be included in the definition of "descendant" or "descendants" under this Trust Agreement. F. Internal Revenue Code. References to various Sections of the "Code" are to such designated Sections of the Internal Revenue Code of 1986, as amended. G. Fleirs. References to "heirs" are to those persons who would inherit sepaxate personal property from the person designated under the statutes of descent and distribution of Texas, if such person died intestate and single at such time. 14 _ H. TEXAS LAW APPLIES. THIS TRUST AGREEMENT HAS BEEN ;' EXECUTED 1N THE STATE OF TEXAS, AND ALL QUESTIONS PERTAINING TO ITS VALIDITY, CONSTRUCTION AND ADMINISTRATION SHALL BE DETERMINED IN ACCORDANCE WITH THE LAWS OF THAT STATE. IN WITNES S WHEREOF, the Grantors and the Trustee have hereunto set their hands as of the date first above written. _ ., 15 THE STATE OF TEXAS COUNTY OF l��Q,� BEFORE ME, the undersigned authority, on this daypersonally appeared RICHARD L. MOON and SHIRLEY F. MOON, known to me to be the persons whose names are subscribed to the foregoing instrument as Grantors, and acknowledged to me that they executed the same for the purposes and consideration therein expressed. GIVEN IJNDER MY HAND AND SEAL OF OFFICE, on � J��,✓� lp , 2001. �� RANDALL V BRINSON �� MOTARY_pUBIICSTATEDFTE!(AS .� �� COANI$SION EXPIRES: ,N►I�IJARY 31, 2006 THE STATE OF TEXAS COUNTY OF� ,�,,,� NO ARY PUBLIC AND FOR THE STATE OF TEXAS Notary's printed name: ��,¢C_c, �.�J,sv.�.� My commission expires: �- 3 r- p�' 0 BEFORE ME, the undersigned authority, on this day personally appeared RICHARD L. MOON and SHIRLEY F. MOON, known to me to be the persons whose names are subscribed to the foregoing instrument as Co-Trustees, and acknowledged to me that they executed the same for the purposes and consideration therein expressed and in the capacities therein stated. GNEN UN�Ek IVIY HAND AND SEAL OF OFFICE, on �J �� , 2001. ,�""� RANDALL Y BRIN30p � � * �ora�vruaucsr�r�.oFrew�s '�hp�tE��,I COMNI$g�ON ERPIRES; JANUqqY 31, 200C fFM J N ARY PUBLIC IN AND FOR THE STATE OF TEXAS Notary's printed name: ,�¢�c. �/�.��✓S�� My commission expires: ,- 3/- C� 16