Appendix — Ginther v. Ginther Trusts

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APPENDIX A — PER CURIAM OPINION OF THE

UNITED STATES COURT OF APPEALS FOR THE

FIFTH CIRCUIT DATED AND

FILED JANUARY 29, 2001

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-20593

(Summary Calendar)

In the Matter of: THE GINTHER TRUSTS,

A Texas Joint Venture,

Debtor,

FERGUS M. GINTHER; ADRIANA N. GINTHER

Appellants,

versus

THE GINTHER TRUSTS, A Texas Joint Venture;

REDSTONE EL DORADO ACQUISITION, L.P.,

Appellees,

Appeal from the United States District

Court for the Southern District of Texas

Before HIGGINBOTHAM, WIENER, and BARKSDALE,

Circuit Judges.

2a

Appendix A

PER CURIAM:

Appellants Fergus and Adriana Ginther contend that the

District Court erred in dismissing as moot their appeal of

the bankruptcy court’s authorization of the sale of the

undivided interest of the Ginther Trusts, a Texas joint venture

(“the Venture”), in the El Dorado Ranch (“the Ranch”) to

Redstone E] Dorado Acquisition, L.P. (“Redstone”). The

Venture owned, in the aggregate, approximately 51% of the

undivided interest in the Ranch, a real estate development

in Texas, and joined all other owners of fractional interests

in selling the Ranch to Redstone. As the Venture was then a

debtor in bankruptcy, it did not sell its fractional interest in

the Ranch until after it obtained authorization from the

bankruptcy court pursuant to 11 U.S.C. § 363(b). Appellants

contended in bankruptcy court that the sale should not have

been authorized because, inter alia, the Venture lacked

standing to become a debtor in bankruptcy. Appellants also

asserted — for the first time on appeal to the district court

— that Redstone was not a good faith purchaser. Because,

however, (1) the sale was authorized by the bankruptcy court,

and (2) Appellants were unable to obtain a stay of the sale,

we affirm the district court’s dismissal of this appeal as moot.

1. Facts and Proceedings

In the 1950s, Noble C. and Minnie Lee Ginther, husband

and wife, acquired the Ranch, a 2033 acre tract of Texas

real property. Thereafter, it was developed into the el Dorado

Ranch and E] Dorado Country Club. They sold factional

interests in the Ranch, retaining approximately 51 percent

in undivided ownership.

3a

Appendix A

In the mid-1980s, the Ginthers (“grantors”) created the

Ginther Revocable Trust, a revocable inter vivos trust, to

which they transferred their interest in the Ranch. The trust

agreement provided that, on the death of the first grantor to

die, the trustee would divide the assets of the trust into two

separate shares, not necessarily equal in value, one share to

hold the property of the surviving grantor, the other share to

hold the property of the deceased grantor.

In accordance with that provision of the trust agreement,

on the death of Noble C. Ginther in 1989, the trust’s 51

percent interest in the Ranch was divided into two separate

shares: The decedent’s undivided 24.7 percent interest went

into the Noble C. Ginther Grantor Trust and the survivor’s

undivided 26.7 percent interest went to the Minnie Lee

Ginther Grantor Trust. These trust shares — actually sub

trusts — were then placed under the fiduciary control of the

Advent Trust Company, as successor trustee of the two

grantor trusts that resulted (collectively the “Ginther Trusts”).

In 1998, the Venture, referring to itself as a Texas joint

venture, voluntarily filed for relief under Chapter 11 of the

bankruptcy code. In response to a challenge mounted by a

number of creditors to the Venture’s standing to file for

bankruptcy, the bankruptcy court found that the Venture

constituted a de facto joint venture under Texas law, that it

owned a fractional interest of some 51% to 53% in the Ranch,

and that it did have standing as a debtor in bankruptcy court.

The Venture and the other owners of the Ranch entered

into an agreement to sell the Ranch to Redstone, subject to

the Venture’s obtaining the bankruptcy court’s approval of

4a

Appendix A

the sale of its interests. Appellants challenged the Venture’s

record title to the Ranch and attempted to block the sale.

They did not, however, challenge Redstone’s status as a good

faith purchaser until they appealed to the district court.

The bankruptcy court proceeded to approve the

Venture’s sale of its interest in the Ranch to Redstone as

good faith purchaser. Appellants appealed that decision to

the district court and then to us, and they sought a stay of

the sale pending each appeal. Like the bankruptcy court,

however, the district court — and ultimately this court —

refused to grant a stay and the sale of the Ranch to Redstone

was consummated.

Despite their failure to obtain a stay of the sale,

Appellants prosecuted their appeal of the bankruptcy court’s

authorization of the sale to the district court, which dismissed

their appeal as moot because the sale had already been closed.

That dismissal is now before us on appeal.

II. Analysis

A. Standard of Review

We review de novo the district court’s dismissal of an

appeal from the bankruptcy court as moot.!

B. Failure to Obtain a Stay

After the bankruptcy court authorized the sale of the

Venture’s interest in the Ranch to Redstone pursuant to

1. Inre GWI PCS 1 Inc., 230 F.3d 788, 800 (Sth Cir. 2000).

Sole tape rnetied epbepe” Pays Paw TON 4

Sa

Appendix A

11 U.S.C. § 363(b), Appellants were unsuccessful in their

attempts to obtain a stay of the sale, and it closed. 11 U.S.C.

§ 363(m) provides that a bankruptcy court’s authorization

of the sale of property under 11 U.S.C. § 363(b) “to an entity

that purchased ... such property in good faith, whether or

not such entity knew of the pendency of the appeal, unless

such authorization and such sale or lease were stayed pending

appeal” cannot be reversed or modified.’

Appellants contended, for the first time on appeal to the

district court, that Redstone was not a good faith purchaser

of the Ranch, making § 363(m) inapplicable. As Redstone’s

status as a good faith purchaser was not challenged in the

bankruptcy court, however, we need not address this issue.

“It is well established that we do not consider arguments or

claims not presented to the bankruptcy court.”’ We

nevertheless note in passing that our thorough review of the

record, Appellants’ arguments, and the bankruptcy court’s

well-reasoned opinion, convinces us that if we were to

address the good faith purchaser issue we would likely agree

with the bankruptcy court’s determination that Redstone was

a good faith purchaser as a matter of law.

C. Subject Matter Jurisdiction

Appellants also challenge the subject matter jurisdiction

of the bankruptcy court by urging that the Venture was not a

2. 11 U.S.C. § 363(m) (West 2000).

3. Gilchrist v. Westcott, (In Matter of Gilchrist), 891 F.2d 559,

561 (5th Cir. 1990) (citing Moody v. Empire Life Ins. Co. (In re Moody),

849 F.2d 902, 905 (Sth Cir.), cert. denied, 488 U.S. 967 (1988)).

6a

Appendix A

debtor with standing in bankruptcy court. This contention is

irrelevant to the instant inquiry, however. In Jn re Gilchrist,‘

we adopted the Seventh Circuit’s interpretation of § 363(m)

that a failure to obtain a stay is fatal to a challenge of a

bankruptcy court’s authorization of the sale of property,

notwithstanding any questions as to that court’s jurisdiction.

As the Seventh Circuit had earlier held in Jn re Sax,°

[t]he appellants raise the jurisdictional argument

as if it somehow negates or excuses their failure

to obiain a stay. It does not. This appeal is moot

because [the appellants] failed to obtain a stay,

so we cannot reach the question of whether the

bankruptcy court had jurisdiction to order and

approve the sale... . The bankruptcy court made

the determination that it had jurisdiction; an issue

which it had jurisdiction to decide.... That

decision stands unless it is appealed properly. . . .

Despite the maxim that [‘subject matter jurisdiction

can be raised at any time,’ valid procedural rules

cannot be ignored just because the jurisdictional

decision is being challenged rather than the

decision on the merits.°

Moreover, we are persuaded, as was the bankruptcy court,

that the Venture’s resulting co-ownerships following the

4. 891 F.2d 559 (Sth Cir. 1990).

5. 796 F.2d 994 (7th Cir. 1986).

6. Id. at 561 (quoting Jn re Sax, 796 F.2d at 998).

haa tiie

7a

Appendix A

division of the original trust on the death of the first settlor

to die is a de facto joint venture under Tex. Civ. Code Ann.

§ 6132b. Such joint ventures are clearly “persons” entitled

to be debtors in bankruptcy court.’

III. Conclusion

Because Appellants failed to obtain a stay of the sale of

the Venture’s interest in the Ranch to Redstone, the district

court dismissed Appellant’s appeal as moot. The decision

of the district court is therefore

AFFIRMED.

7. 11 U.S.C. § 109(b) (West 2000).

8a

APPENDIX B — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN DISTRICT

OF TEXAS, HOUSTON DIVISION DISMISSING THE

APPEAL AS MOOT DATED AND

ENTERED JUNE 27, 2000

IN THE UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CIVIL ACTION NO. 00-1295

FERGUS M. GINTHER and ADRIANA N. GINTHER,

Appellants,

versus

THE GINTHER TRUST, A TEXAS JOINT VENTURE

and REDSTONE EL DORADO ACQUISITION, L.P.,

Appellees.

ORDER

IT IS HEREBY ORDERED that Appellees’ Motion to

Dismiss Appeal (Instrument No. 11) is GRANTED.

The Clerk shall enter this Order and provide a copy to

all parties.

SIGNED on this the 27th day of June, 2000, at Houston,

Texas.

s/ Vanessa D. Gilmore

VANESSA D. GILMORE

UNITED STATES DISTRICT

JUDGE

9a

APPENDIX C — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE FIFTH CIRCUIT

DENYING MOTION FOR STAY PENDING APPEAL

DATED AND FILED MARCH 22, 2000

IN THE UNITED STATES COURT OF APPEALS

FOR THE FIFTH CIRCUIT

No. 00-20216

o

In The Matter Of: GINTHER TRUSTS,

a Texas Joint Venture

Debtor

FERGUS M. GINTHER; ADRIANA N. GINTHER

Appellants

V.

THE GINTHER TRUSTS, a Texas Joint Venture;

CREDITORS COMMITTEE, The Official Committee of

Unsecured Creditors; REDSTONE EL DORADO

ACQUISITION LP; TEBEAR INVESTMENTS INC;

NUCORP INC

Appellees

CA-00-925

Appeal from the United States District Court for the

Southern District of Texas, Houston

cele

10a

Appendix C

Before HIGGINBOTHAM, DeMOSS, and STEWART,

Circuit Judges.

BY THE COURT:

IT IS ORDERED that appellants’ motion for stay

pending appeal is DENIED.

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APPENDIX D — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN DISTRICT

OF TEXAS, HOUSTON DIVISION DENYING

MOTION FOR STAY PENDING APPEAL

DATED MARCH 17, 2000

COURTROOM MINUTES :

JUDGE Vanessa D. Gilmore PRESIDING

COURTROOM CLERK B..E. Mares

COURT REPORTER Bruce Slavin

LAW CLERK Sorcha Landau

MORNING

SESSION 10:30, 12:18

* * *

DATE: 3-17-00

CA H-00-925

Fergus Ginther et al

V.

The Ginther Trusts

12a

Appendix D

DOCKET ENTRY

(VG) Motion Hearing (Rptr — B. Slavin)

(Proceeding)

x * x

Movant’s Motion to Stay Pending Appeal is

DENIED for reasons as stated on the record.

l3a

APPENDIX E — FINAL JUDGMENT OF THE UNITED

STATES BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION DATED

MARCH 1, 2000 AND ENTERED MARCH 2, 2000

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CASE NO. 98-32663-H4-11

(Chapter 11)

IN RE

THE GINTHER TRUSTS,

A TEXAS JOINT VENTURE

Debtor

ADVERSARY NO. 99-3058

THE GINTHER TRUSTS,

A TEXAS JOINT VENTURE

Plaintiff

V.

NOBLE C. GINTHER, JR., ET AL.

Defendants

14a

Appendix E

FINAL JUDGMENT

On January 27, 2000, trial was held on 1) the Complaint

filed by the Debtor, The Ginther Trusts, a Texas Joint

Venture, against Noble C. Ginther, Jr.; Stuart Douglas

Ferrell; Stuart Douglas Ferrell, Trustee; Noble C. Ginther,

III, Trustee for the Fallon Renee Ginther Trust; Noble C.

Ginther, III, Trustee for the Chelsea Leigh Ginther Trust;

Esther Duff, Executor of the Estate of Gordon A. Duff; Esther

Duff, Successor Trustee; Mercantile Bank of Southern

Illinois, Successor Trustee of the W:fe’s Trust and the

Residuary Trust Under the Last Will dated October 6, 1987

of Gordon A. Duff; Edmond Lee “Pat” Ginther; Barbara A.

Ginther Nelson; John N. Randall; Rosanne Van Dorn

Ginther; Marilyn Deshong; Nucorp, Inc.; Bobbie Bayless,

Receiver; Advent Trust Company, Successor Corporate

Trustee of the NCG Trust; Advent Trust Company, Successor

Corporate Trustee of the Noble C. Ginther Trust, and the

Minnie L. Ginther Trust; Tri-Texas Realty, Inc.; Ferrell

Realty Corp.; Fergus M. Ginther; Adriana Ginther; Erin Lee

Ginther; and Stone Mountain Petroleum, LLC (the

“Defendants”’); and 2) Debtor’s Motion for Authority to Sell

Property Free and Clear of Liens and Encumbrances Pursuant

to 11 U.S.C. § 363. The Debtor appeared by and through its

authorized representative and through counsel. The

Defendant Nucorp, Inc. appeared by and through its

authorized representative and through counsel. The

Defendants Noble C. Ginther, Jr., Fergus M. Ginther, and

Adriana Ginther appeared through counsel. The Official

Committee of Unsecured Creditors and Amber Ginther

intervened in this proceeding and appeared through counsel.

Bobbie Bayless, Receiver of the Estate of Noble C. Ginther,

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Appendix E

Sr., Deceased, having no affirmative opposition to the sale,

at the request of her counsel was given permission by the

Court not to attend the trial. In addition, Tebear Investments,

Inc., appeared by and through its counsel of record. Redstone

Properties, LLC (“Redstone Properties”) and Redstone

El] Dorado Acquisition L.P. (“Redstone Acquisition”)

appeared by and through their authorized representative and

through counsel. After consideration of all evidence,

objections, pleadings, memoranda and arguments of counsel,

the Court makes the following findings of fact and

conclusions of law and enters this Final Judgment

accordingly. To the extent that any findings of fact are

deemed to be conclusions of law, they are hereby adopted as

such. To the extent that any conclusion of law are deemed to

be findings of fact, they are hereby adopted as such:

1. On March 11, 1998, the Debtor filed a voluntary

petition for relief under Chapter 11 of the United States

Bankruptcy Code, 11. U.S.C. § 101, et seq. (the “Code”).

Since the Petition Date, the Debtor has continued to

operate its affairs as a debtor in possession pursuant to

sections 1107 and 1108 of the Code.

2. As reflected by this Court’s Order On Motion to

Dismiss, entered June 24, 1998, the Debtor is a de facto

joint venture composed solely of the Noble C. Ginther

Grantor Trust a/k/a N.C. Ginther Grantor Trust, and the

Minnie Lee Ginther Grantor Trust, a/k/a M.L. Ginther

Grantor Trust (such trusts herein being collectively

called the “Grantor Trusts”). The only property of the

joint venture comprising Debtor’s bankruptcy estate is

its ownership interests contributed by the Grantor Trusts

l6a

Appendix E

in or relating to the El Dorado Golf Club, Inc., d/b/a

El Dorado Country Club (“EDCCI”) and the real estate

known as the El Dorado Ranch (the “Ranch”’) (together

with certain personal property and certain claims and

causes of action, including but not limited to avoidance

actions). The Ranch consists of approximately 2,011

acres of developed and undeveloped real property located

in Harris County, Texas.

3. Advent Trust Company, as Successor Trustee of the

Noble C. Ginther Grantor Trust a/k/a N.C. Ginther

Grantor Trust, owns, of record, a 24.7246639656902765%

undivided interest in the surface estate of the Ranch.

Advent Trust Company, as Successor Trustee of the

Minnie Lee Ginther Grantor Trust a/k/a M.L. Ginther

Grantor Trust, owns, of record, a 26.7246639656902765%

undivided interest in the surface estate of the Ranch.

Together these two interests constitute approximately

an undivided 51% interest in the surface estate of the

Ranch. That 51% undivided interest has been contributed

to The Ginther Trusts, A Texas Joint Venture, which is

the Debtor, and constitutes property of the Debtor’s

estate. The Debtor has the authority to deal with that

interest in the Ranch, as well as the equitable title in the

Ranch of the persons who are the beneficiaries of the

two trusts.

4. The remaining undivided interest in the surface estate

of the Ranch is owned of record by approximately fifteen

(15) other owners (collectively the “Record Title

Co-Interest Owners”), all of whom are Defendants

herein. The respective record ownership interests of the

17a

Appendix E

Record Title Co-Interest Owners in the Ranch are

reflected on the Commitments for Title Insurance

attached hereto as Exhibit “A” and incorporated herein.

Intervenor, Amber Ginther does not own a record

ownership interest in the Ranch, but claims an ownership

interest as well as a homestead interest in the Ranch.

Erin Leigh Ginther owns an interest in the mineral estate

of the Ranch. For purposes of this Final Judgment, the

term “Co-Interest Owners” means Amber Ginther, Erin

Leigh Ginther, and the parties listed in Item 3 of

Schedule A on each of the Commitments for Title

Insurance attached hereto as Exhibit “A” and

incorporated herein (such parties listed in such Item 3

being the Record Title Co-Interest Owners). The Debtor

and the Co-Interest Owners own undivided interests in

the Ranch, as tenants in common, joint tenants, or tenants

by the entirety. Debtor and the Co-Interest Owners own

all of the surface estate of the Ranch and all or

substantially all of the outstanding oil, gas and other

minerals with respect to the Ranch.

5. All or a portion of the Ranch is leased to EDCCI,

which operates the E] Dorado Country Club on a portion

of the Ranch.

6. In the summer of 1998, Jerry Crawford made a bid

to purchase the Ranch at a purchase price of

$11,300,000.00. The bid was accepted by the Debtor,

subject to bankruptcy court approval and other

conditions contained in such bid. Prior to execution of

an earnest money contract reflecting the proposed sale,

Mr. Crawford assigned his interests and rights in the

transaction to Redstone Properties.

18a

Appendix E

7. On November 5, 1998, subject to bankruptcy court

approval, the Debtor, as Seller, entered into a Sale and

Purchase Agreement with Redstone Properties for the

sale of the Ranch. The original Purchase Price (as defined

in the Sale and Purchase Agreement) for the Property

was $11,300,000.00.

8. The Sale and Purchase Agreement has been amended

by First Amendment to Sale and Purchase Agreement

(“First Amendment”) dated February 1, 1999, Second

Amendment to Sale and Purchase Agreement (“Second

Amendment”) dated April 16, 1999, Third Amendment

to Sale and Purchase Agreement (“Third Amendment’)

dated May 7, 1999, Fourth Amendment to Sale and

Purchase Agreement (“Fourth Amendment”) dated July

9, 1999, Fifth Amendment to Sale and Purchase

Agreement (“Fifth Amendment”) dated July 13, 1999,

Sixth Amendment to Sale and Purchase Agreement

(“Sixth Amendment”) dated November 24, 1999, and

Seventh Amendment to Sale and Purchase Agreement

(“Seventh Amendment”) dated January 26, 2000 (the

Sale and Purchase Agreement, as amended, herein being

called the “Sale and Purchase Agreement”).

9. Redstone Properties has assigned its interest in the

Sale and Purchase Agreement to Redstone Acquisition.

10. Pursuant to the terms of the Sale and Purchase

Agreement, as amended, the total acreage to be sold to

Redstone Acquisition is approximately 1,643.94 acres,

as more particularly described on Exhibit “B” attached

to this Final Judgment and incorporated herein, together

19a

Appendix E

with all improvements thereon and all rights and

appurtenances thereto (herein the “Property”), for a total

Purchase Price of $10,000,000.00.

11. Pursuant to the terms of an Assignment Agreement

(as amended) between Redstone Properties and Jerry

Crawford, upon (and only upon) completion of the

closing of the acquisition of the Property by Redstone

Acquisition, Mr. Crawford is entitled to receive a fee of

$700,000 from Redstone Properties.

12. Pursuant to the terms of a Fee Agreement between

Mr. Crawford and Don J. Davis, Mr. Crawford will pay

$350,000 of the $700,000 fee to Don J. Davis.

13. The Sale and Purchase Agreement is conditioned

upon the Debtor’s obtaining either Ratifications of the

Sale and Purchase Agreement by the Co-Interest Owners,

or the Debtor’s obtaining an Order from the Bankruptcy

Court under 11 U.S.C. § 363(h), authorizing sale of both

the Debtor’s interest and the interests of all non-ratifying

Co-Interest Owners.

14. On September 8, 1998, the Debtor filed its

Disclosure Statement. On November 24, 1998, the

Debtor filed its First Amended Disclosure Statement

with respect to its First Amended Plan of Reorganization

(the “Amended Plan’’).

15. The Amended Plan provides for the liquidation of

all the Debtor’s assets with the proceeds of the tangible

assets to be used to satisfy all Allowed Claims in full.

20a

Appendix E

The Amended Plan is to be funded by the proceeds of

the sale of the Debtor’s interest in the Property, and is

conditioned upon sale of the Property.

16. On February 1, 1999, the Debtor filed its Motion

for Authority to Sell Property Free and Clear of Liens

and Encumbrances Pursuant to 11 U.S.C. § 363. On

September 23, 1999, the Debtor filed its First Amended

Motion for Authority to Sell Property Free and Clear of

Liens and Encumbrances Pursuant to 11 U.S.C. § 363.

On October 15, 1999, the Debtor filed its Second

Amended Motion for Authority to Sell Property Free

and Clear of Liens and Encumbrances Pursuant to 11

U.S.C. § 363 (the Motion, as amended by the First

Amended Motion and the Second Amended Motion,

herein being called the “Motion to Sell’’).

17. Notice of the Motion to Sell was properly given

pursuant to the requirements of Rules 2002, 6004 and

9014 of the Federal Rules of Bankruptcy Procedure.

18. On February 1, 1999, the Debtor filed its Plaintiff's

Original Complaint in order to force the sale of the Ranch

over the objection of dissenting or non-consenting Co-

Interest Owners. On July 14, 1999, the Debtor filed its

Plaintiff's First Amended Complaint. On August 16,

1999, filed its Second Amended Complaint, and on

October 14, 1999, the Debtor filed its Third Amended

Complaint (Plaintiff's Original Complaint, as amended,

being hereinafter referred to as the “Adversary

Proceeding”).

5

3

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PQA AO Rt inh AORN ARTI i ct NER FORE HERE SES RTARAI eA S DT GH

2la

Appendix E

19. Pursuant to Order Consolidating Motion to Sell with

Adversary Proceeding and Setting Pretrial Deadlines,

entered April 21, 1999, the Court consolidated the

Debtor’s Motion to Sell with the Adversary Proceeding.

20. Summons have been issued on the following

Defendants, who have been properly served with the

summons and a copy of the Complaint: Noble C. Ginther,

Jr.; Stuart Douglas Ferrell; Stuart Douglas Ferrell,

Trustee; Noble C. Ginther, III, Trustee for the Fallon

Renee Ginther Trust; Noble C. Ginther, III, Trustee for

the Chelsea Leigh Ginther Trust; Esther Duff, Executor

of the Estate of Gordon A. Duff; Esther Duff, Successor

Trustee; Mercantile Bank of Southern Illinois, Successor

Trustee of the Wife’s Trust and the Residuary Trust

Under the Last Will dated October 6, 1987 of Gordon

A. Duff; Edmond Lee “Pat” Ginther; Barbara A. Ginther

Nelson; John N. Randall; Rosanne Van Dorn Ginther;

Marilyn Deshong; Nucorp, Inc.; Bobbie Bayless,

Receiver; Advent Trust Company, Successor Corporate

Trustee of the NCG Trust; Advent Trust Company,

Successor Corporate Trustee of the Noble C. Ginther

Trust, and the Minnie L. Ginther Trust; Tri-Texas Realty,

Inc.; Ferrell Realty Corp.; Fergus M. Ginther; Adriana

Ginther; Erin Lee Ginther; and Stone Mountain

Petroleum, LLC.

21. Although duly served, Stuart Douglas Ferrell; Stuart

Douglas Ferrell, Trustee; Noble C. Ginther III, Trustee

for the Fallon Renee Ginther Trust; Noble C. Ginther

III, Trustee for the Chelsea Leigh Ginther Trust; Advent

Trust Company, Successor Corporate Trustee of the

22a

Appendix E

NCG Trust; Advent Trust Company, Successor

Corporate Trustee of the Noble C. Ginther Trust and the

Minnie L. Ginther Trust; Esther Duff, Executor of the

Estate of Gordon A. Duff; Esther Duff, Successor

Trustee; Mercantile Bank of Southern Illinois, Successor

Trustee of the Wife’s Trust and the Residuary Trust

Under the Last Will dated October 6, 1987 of Gordon

A. Duff; Edmond Lee “Pat” Ginther; Barbara A. Ginther

Nelson; John N. Randall; Rosanne Van Dorn Ginther;

Marilyn Deshong; Tri-Texas Realty, Inc.; Ferrell Realty

Corp.; Erin Lee Ginther; and Stone Mountain Petroleum,

LLC. (the “Defaulting Defendants”) have failed to file

an answer or any pleading constituting an answer and

have not entered an appearance. The deadline for filing

an answer has passed.

22. The Court has jurisdiction over the Adversary

Proceeding pursuant to 28 U.S.C. § 157. This matter is

a core proceeding pursuant to 28 U.S.C. § 157(b)(2)(N)

and (Q).

23. Venue is proper in this Court pursuant to 28 U.S.C.

§ 1409, as the main bankruptcy case is pending in this

Court.

24. Certain Defendants have executed Ratification

Agreements, approving and authorizing the sale of the

Property pursuant to the terms and conditions of the Sale

and Purchase Agreement. Ratification Agreements have

been executed by Nucorp, Inc.; Rosanne Van Dorn

Ginther; Edmond Lee “Pat” Ginther; Marilyn Deshong;

Advent Trust Company, Successor Corporate Trustee

23a

Appendix E

of the NCG Trust; Advent Trust Company, Successor

Corporate Trustee of the Noble C. Ginther Trust and the

Minnie L. Ginther Trust; Barbara A. Ginther Nelson;

and John N. Randall.

25. Objections to the Motion to Sell were filed by Harris

County-State of Texas, the Texas Natural Resource

Conservation Commission, Noble Ginther, Jr., Fergus

and Adriana Ginther, and Tebear Investments, Inc.

26. Answers to the Adversary Proceeding were filed by

Noble Ginther, Jr., Stuart Douglas Ferrell, and Fergus

and Adriana Ginther.

27. Amber Ginther filed a Motion to Intervene, claiming

ownership and homestead interests in the Ranch. In the

Motion, Amber Ginther asked to intervene as a party in

support of the sale, subject to Court approval of the

Settlement Agreement (herein defined). The Court

granted the Motion to Intervene by Order entered J anuary

31, 2000.

28. The objections of Noble Ginther, Jr. to the Complaint

and the Motion to Sell have been withdrawn pursuant to

the terms of a settlement agreement entered into among

the Debtor, Redstone Acquisition, Noble C. Ginther, Jr.,

Amber Ginther, and El Dorado Tract GP, Inc., a copy of

which is attached hereto as Exhibit “C” and incorporated

herein (herein being called the “Settlement Agreement”’).

Although the Debtor is a nominal party to the Settlement

Agreement, no consideration is being paid by the Debtor

under the Settlement Agreement.

24a

Appendix E

29. The requirements of Section 363(b) and Section

363(h) of the Bankruptcy Code have been met.

30. Partition in kind of the Property is impossible due

to the variation in the land and the great number of

owners of the Property. Accordingly, the requirements

of Section 363(h)(1) are met in that partition in kind of

the Property among the Debtor’s estate and the Co-

Interest Owners is impracticable.

31. -The requirements of Section 363(h)(2) have been

met in that sale of the Debtor’s undivided interest in the

Property would realize significantly less for the Debtor

than sale of such Property free and clear of the interests

of the Co-Interest Owners.

32. The requirements of Section 363(h)(3) have been

met in that the benefit to the Debtor of a sale of such

Property free of the interests of the Co-Interest Owners

outweighs the detriment, if any, to the Co-Interest

Owners.

33. The requirements of Section 363(h)(4) have been

met in that the Property is not used in the production,

transmission, or distribution, for sale, of electric energy

or of natural or synthetic gas for heat, light, or power.

34. Pursuant to Section 363(h) of the Code, the Debtor

is authorized to sell both the Debtor’s interest, and the

interests of the Co-Interest Owners, in the Property.

25a

Appendix E

35. No Defendants have asserted a vested or contingent

right in the nature of dower or curtesy. To the extent

that any Defendant asserts such a right, the Property

should be sold free and clear of any and all such rights.

36. The Debtor marketed the Property in a professional

and diligent manner. In exercising its business judgment,

the Debtor has acted in good faith and determined that

the sale of the Property is in the best interest of the

Debtor, its estate, and its creditors.

37. The sale of the Property is in the best interests of

the Debtor, its estate, its creditors, and the Co-Interest

Owners.

38. The sale of the Debtor’s interest in the Property is

the best means available for providing cash to satisfy

the allowed claims of creditors.

39. The Sale and Purchase Agreement was negotiated

in an arms length transaction and in good faith, and the

terms and conditions are fair and are equitable and in

good faith.

40. Redstone Acquisition is purchasing the Property in

good faith within the meaning of Section 363(m) of the

Bankruptcy Code.

41. Upon Redstone Acquisition’s purchase of the

Property, it is contemplating selling a portion of the

Property (such portion herein being called the “Johnson

Portion”) to an entity affiliated with Larry Johnson (such

26a

Appendix E

entity herein being called the “Johnson Entity”) for a

purchase price of $8,500,000. Redstone Acquisition’s

sale of the Johnson Portion to the Johnson Entity is in

good faith. The Johnson Entity’s purchase of the Johnson

Portion is in good faith.

42. Pursuant to Section 363(f) of the Bankruptcy Code,

the Debtor is entitled to sell both the Debtor’s interest

in the Property and the interests of the Co-Interest

Owners free and clear of any interests in the Property,

including but not limited to free and clear of all liens,

claims, and encumbrances, except for the Permitted

Encumbrances (herein defined).

43. The sale of the Property represents sound business

judgment.

44. The Purchase Price of $10,000,000.00 is the highest

and best obtainable under present market conditions and

circumstances.

45. Time is of the essence with regard to obtaining

authorization to consummate the sale. Redstone

Properties and Redstone Acquisition have committed

substantial resources and reserved substantial capital to

undertake the purchase of the Property. Delaying the sale

until confirmation of a Plan of Reorganization would

result in potential loss of the sale to Redstone Acquisition

and loss of a viable purchaser of the Property.

46. In reference to any payments to be received from

the sale by either Jerry Crawford or Don Davis, there is

27a

Appendix E

no evidence of bad faith or evidence of unreasonableness

with regard to the Debtor’s estate. In light of the nature

of the Property, the claims against the Debtor’s estate,

and the parties making claims against the Property, sale

of the Property is the absolute best thing that can happen

to this Property. In light of that, and the sales price of

the Property, the payment of $700,000.00 is reasonable

under the circumstances.

It is therefore, ORDERED, ADJUDGED, AND

DECREED that:

1. The Debtor’s Motion to Sell is granted.

2. Final Judgment is awarded in favor of the Debtor in

the Adversary Proceeding. The Debtor is authorized to

sell to Redstone Acquisition full fee simple title to the

Property (including both the surface and mineral estates),

which includes both the Estate’s undivided interest in

the Property and the interests of the Co-Interest Owners

in the Property, pursuant to the terms of the Sale and

Purchase Agreement and this Order, free and clear of

all Encumbrances (herein defined), except for the

Permitted Encumbrances (herein defined). Specifically,

but without limitation, the Debtor is authorized to sell

to Redstone Acquisition full fee simple title to the

Property (including both the surface and mineral estates),

which includes both the Debtor’s undivided interest in

the Property and the interests of the Co-Interest Owners

in the Property, free and clear of all of the Unacceptable

Encumbrances (herein defined). As used herein, the term

“Encumbrances” shall mean any and all liens, claims,

28a

Appendix E

leases, mineral leases, outstanding mineral interests,

interests, rights, reservations, restrictions and other

matters and encumbrances that affect all or any portion

of the Property. As used herein, the term “Permitted

Encumbrances” shall mean those Encumbrances referred

to in (a) items 11, 12, 13, 15, 17, 19, 20, 21, 26, 34, 38,

51, 52, 53, 54, 55, 56, 57, 58, 59, 60, 63 and 66 of

Schedule B to that certain Commitment for Title

Insurance (“Redstone Title Commitment”) issued by

Charter Title Company on behalf of Lawyers Title

Insurance Corporation, bearing GF No. 98030451,

having an effective date of December 29, 1999 and an

issued date of January 7, 2000, and (b) items 15, 16, 17,

19, 20, 21, 22, 24, 25, 35, 36, 40, 41, 46, 48, 49, 52, 53,

54, 55, 56, 57, 58, 59, 60, 63 and 66 of Schedule B to

that certain Commitment for Title Insurance (“Johnson

Title Commitment”) issued by Charter Title Company

on behalf of Lawyers Title Insurance Corporation

bearing GF No. 98030451-B, having an effective date

of December 29, 1999 and an issued date of January 7,

2000. The Redstone Title Commitment and the Johnson

Title Commitment are herein collectively called the

“Title Commitments”, and are attached hereto as

Exhibit “A” and incorporated herein. As used herein,

the term “Unacceptable Encumbrances” shall mean all

Encumbrances, save and except the Permitted

Encumbrances. The Unacceptable Encumbrances

specifically include, without limitation, (a) all of the

matters set forth in the Title Commitments, including

those matters set forth in Schedules B and C to the Title

Commitments, but expressly excluding the Permitted

Encumbrances, (b) all leases and other rights of

29a

Appendix E

occupancy in favor of EDCCI or any other party, (c) all

rights and other interests (including possessory rights)

of any party holding under EDCCI, including without

limitation, all subtenants, licensees, employees, agents,

officers, directors and shareholders of EDCCI and all

members of the golf club EDCCI has been or is operating

on a portion of the Property, (d) any homestead or other

claims or interests of Noble C. Ginther, Jr. or Amber

Ginther, (e) any interests or claims of F ergus M. Ginther

and Adriana Ginther and (f) all property, maintenance

and similar agreements. Debtor’s conveyance of full fee

simple title to the Property (including both the surface

and mineral estates) to Redstone Acquisition by Debtor

on its own behalf and on behalf of all of the Co-Interest

Owners shall be free and clear of all Encumbrances

(including the Unacceptable Encumbrances), except for

the Permitted Encumbrances.

3. The Debtor is authorized and directed, both on its

own behalf and on behalf of all of the Co-Interest

Owners, to execute and deliver all documents and

instruments necessary, appropriate or desirable to

complete a sale of the Property (which includes the

interests of the Debtor and the Co-Interest Owners in

the Property) to Redstone Acquisition upon such terms

and conditions as are described in, or contemplated by,

the Sale and Purchase Agreement. Such documents and

instruments include, but are not limited to, an instrument

entitled “Special Warranty Deed, Easement, Assignment,

Declaration of Restrictions and Other Agreements”

(“Deed”) in form acceptable to Debtor and Redstone

Acquisition which, among other things, (i) is sufficient

30a

Appendix E

to satisfy the requirements of Sections 5(b)(1) and

5(b)(2) of the Sale and Purchase Agreement, (ii) imposes

the restriction on the portion of the Land Debtor and the

Co-Interest Owners are retaining, such restriction being

described in Section 8(b) of the Third Amendment, (iii)

sets forth the agreement regarding Harris County Water

Control and Improvement District No. 96 contemplated

in Section 5(b)(1)(vii) of the Sale and Purchase

Agreement (such subpart (vii) being created by Section

4 of the Fifth Amendment), and (iv) creates the access

and utility easement referred to in Section 4 of the Sixth

Amendment. All such documents and instruments

(including the Deed) executed and delivered by the

Debtor on behalf of the Co-Interest Owners shall be

binding on such Co-Interest Owners to the same extent

and with the same effect as if the Co-Interest Owners

had themselves executed and delivered all such

documents and instruments (including the Deed).

4. At the closing (“Closing”) of the sale to Redstone

Acquisition, all costs and expenses of the sale shall be

paid out of the sales proceeds pursuant to the terms of

the Sale and Purchase Agreement. In addition, at

Closing, all ad valorem taxes on the Ranch through the

date of Closing shall be paid out of the sales proceeds,

including ad valorem taxes attributable to the interests

of the Debtor and the Co-Interest Owners , but excluding

any additional taxes arising because of changes in land

usage or ownership (the ad valorem taxes payable

out of the sales proceeds herein being called the

“Ad Valorem Taxes”). Ad Valorem Taxes and other

costs and expenses attributable to the interests of the

3la

Appendix E

Debtor shall be paid out of the Debtor’s portion of the

Net Proceeds, and Ad Valorem Taxes attributable to the

interests of each Co-Interest Owner shall be paid out of

each respective Co-Interest Owner’s share of the Net

Proceeds. The requirement that Co-Interest Owners pay

their pro rata portion of Ad Valorem Taxes shall not .

have any prejudicial effect on the Co-Interest Owners’

right to bring a claim against Debtor’s portion of the

Net Proceeds from the sale for payment of current or

past Ad Valorem Taxes. In no event shall any Co-Interest

Owner have any claim against the Property.

5. The net proceeds (“Net Proceeds”) of the sale of the

Property shall consist of the proceeds of the sale, less

(i) the costs and expenses of the sale, including but not

limited to all costs and expenses to be paid by Debtor at

Closing pursuant to the terms of the Sale and Purchase

Agreement, but not including any compensation to the

Debtor; and (ii) all Ad Valorem Taxes due and owing

on the Ranch. All valid liens, claims and encumbrances

against the Debtor are transferred to and shall attach to

the Debtor’s share of the Net Proceeds. All valid liens,

claims, and encumbrances against any Co-Interest Owner

are transferred to and shall attach to such Co-Interest

Owner’s share of the Net Proceeds except as provided

in paragraph 14 below.

6. At Closing, the Net Proceeds of the sale shall be

distributed as follows: that portion of the Net Proceeds

of the sale attributable to Debtor’s interest as reflected

on the Title Commitments shall be paid by Charter Title

Company to Debtor for deposit in an interest-bearing

32a

Appendix E

and separate account at Southwest Bank of Texas, N.A.

(“Debtor Net Proceeds Account”) pending further Order

of this Court; that portion of the Net Proceeds of the

sale attributable to the interests of the Co-Interest

Owners as reflected on the Title Commitments shall be

deposited by Charter Title Company in a separate

interest-bearing account pending distribution to the Co-

Interest Owners as provided in this Final Judgment. No

Co-Interest Owner shall receive any Net Proceeds until

such Co-Interest Owner signs and delivers to Charter

Title Company an affidavit pursuant to Section 1445 of

the Internal Revenue Code in a form reasonably

satisfactory to Redstone Acquisition. Each Co-Interest

Owner who has delivered such affidavit to Charter Title

Company will receive the Co-Interest Owner’s share of

the Net Proceeds plus accrued interest upon delivery of

the affidavit unless an objection to such distribution has

been filed with this Court (and a copy of such objection

has been received by Charter Title Company, 700

Louisiana, Suite 3340, Houston, Texas, 77002, Attn:

Mr. Garry L. Carr), or unless, in the opinion of Charter

Title Company, there are unresolved defects, liens, or

other matters that may affect title to the land or the

interest insured. In the event an objection to the

distribution of funds to a Co-Interest Owner is filed and

received by Charter Title Company, or in the event that,

in the opinion of Charter Title Company, there are

unresolved defects, liens, or other matters that may affect

title to the land or the interest insured, Charter Title

Company is hereby authorized to retain any such funds

in the interest-bearing account pending further Order of

this Court as to the proper distribution of such funds or

33a

Appendix E

to deposit such funds into the registry of this Court or if

such deposit is refused by this Court, any other court of

competent jurisdiction.

7. At the Closing of the sale to Redstone Acquisition,

the Debtor shall pay to Tebear Investments, Inc., out of

the Debtor’s portion of the Net Proceeds, the sum of

$75,000.00, representing the principal amount of Tebear

Investment, Inc.’s claim, plus interest in the amount of

$15,646.00, for a total payment of $90,646.00 (less

$18.50 per day that the Closing funds prior to April 1,

2000 or plus $18.50 per day that the Closing funds after

April 1, 2000). Upon payment by Redstone Acquisition

of the $10,000,000.00 Purchase Price, Tebear

Investments, Inc.’s lien on the Property shall be

automatically released without the necessity of taking

any further action; however, as Tebear Investment, Inc.’s

claim exceeds such sum, Tebear Investment, Inc.’s lien

is transferred to and shall attach to the Debtor’s share of

the Net Proceeds held in the Debtor Net Proceeds

Account.

8. Notwithstanding the provisions of paragraph 6 above,

at the Closing of the sale to Redstone Acquisition,

Charter Title Company shall deposit that portion of the

Net Proceeds attributable to the 3.125% interest in the

Property held by the estate of Noble C. Ginther into an

interest-bearing account at Southwest Bank of Texas,

N.A. to be jointly controlled by the Debtor and Bobbie

G. Bayless, Receiver. Such account shall be maintained

so long as the receivership over certain assets established

by Harris County, Texas, Probate Court No. 4, in Case

34a

Appendix E

No. 231,749-405, styled Elton M. Hyder, III, et al., v.

NationsBank of Texas, N.A., et al., continues, and shall

be held in that manner until any disputes concerning

ownership have been resolved or otherwise decided by

a court of competent jurisdiction.

9. Debtor is authorized to execute a letter authorizing

Charter Title Company to not issue an owner policy of

title insurance to Purchaser covering all of the Property,

but rather to issue two owner policies of title insurance,

one in favor of Redstone Acquisition covering a portion

of the Property and one to Redstone Acquisition’s

purchaser covering the remaining portion of the

Property; provided however, the total cost to Debtor and

the other Co-Interest Owners for such owner policies of

title insurance shall not exceed the cost which would

have been incurred by Debtor and the Co-Interest

Owners if one owner policy of title insurance in the

amount of $10,000,000 had been issued to Redstone

Acquisition covering all of the Property.

10. The Settlement Agreement is hereby approved. If

and only if the Closing of the sale actually occurs,

Redstone Acquisition is ordered to comply with its terms

by paying at Closing $300,000 to Noble C. Ginther, Jr.,

and Amber Ginther, jointly, and by paying $100,000 to

a segregated fund dedicated to severance pay for the

employees of EDCCI. The payments by Redstone

Acquisition are in addition to the $10,000,000 Purchase

Price for the Property. No payments are due Amber

Ginther from the Net Proceeds. If the Closing of the sale

does not occur for any reason whatsoever, including but

35a

Appendix E

not limited to default by Redstone Acquisition, no

amounts will be payable by Redstone Acquisition to

Noble and Amber Ginther under the Settlement

Agreement.

11. The Debtor shall prepare and file a statement of the

completion of the sale herein, including a description of

any and all documents or instruments executed and

delivered in connection therewith, and all proceeds

received from such sale, and include a copy of a deposit

slip showing the amount of Debtor’s Net Proceeds placed

in the Debtor’s interest-bearing account described herein,

a copy of a deposit slip showing the amount of the

Co-Interest Owners’ Net Proceeds deposited by Charter

Title Company, and an accounting of any Net Proceeds

not distributed to the Co-Interest Owners and the reason

such Net Proceeds were not distributed. The Debtor shall

serve a copy of such statement by mail on the United

States Trustee, the Official Committee of Unsecured

Creditors, all creditors, all Co-Interest Owners, all parties

requesting notice, and any other parties claiming an

interest in the Property, including all lienholders.

12. Any claims that might be made with respect to the

Property, the Debtor, or the distribution of the Net

Proceeds shall be asserted in this Court as part of this

case.

13. Notwithstanding any other provision herein, this

Order does not in any manner release, limit or affect the

obligations of Redstone Acquisition as buyer to comply

with all applicable law including, but not limited to,

36a

Appendix E

local, state, and federal rules, regulations, statutes,

permits and orders, pertaining to environmental

requirements. The provisions of this item 13 are based

on Redstone Acquisition’s understanding that the Texas

Natural Resource Conservation Commission

(“TNRCC’’) is not presently aware of any environmental

liabilities associated with the Ranch that are not related

to releases from the underground petroleum storage tanks

referred to in Exhibit “F” to the Purchase and Sale

Agreement dated November 5, 1998 between The

Ginther Trusts, A Texas Joint Venture, and Redstone

Properties.

14. Nucorp, Inc. is the record owner of a 9.375% interest

in the Property, as reflected by the Title Commitments,

and has complete authority to sell or otherwise deal with

such 9.375% interest in the Property, subject to

(a) execution of the affidavit pursuant to Section 1445

of the Internal Revenue Code referred to in paragraph 6

above and (b) release of the deed of trust liens filed under

Clerk’s File Nos. S037324 and $339624 in the Official

Public Records of Real Property of Harris County, Texas.

Nucorp, Inc. shall receive distribution of such 9.375%

interest in the Net Proceeds, subject to the provisions of

paragraph 6 above, free and clear of all liens and free

and clear of any lis pendens filed with respect to the

Property. While this Final Judgment, the disbursement

to Nucorp, Inc., and the findings of fact and conclusions

of law set forth herein shall not have res judicata or

collateral estoppel effect on Fergus Ginther’s or Adriana

Ginther’s state law claims against Nucorp, Inc. or Don

Davis, for purposes of this Final Judgment approving

37a

Appendix E

the sale of the Property, this Final Judgment constitutes

a final order of sale regarding the sale of the Property to

Redstone Acquisition, notwithstanding any subsequent

determination of Fergus Ginther’s and/or Adriana

Ginther’s state law claims against Nucorp, Inc. and Don

Davis.

15. Pursuant to Section 363(i) of the Bankruptcy

Code, before consummation of the sale to Redstone

Acquisition, any Co-Interest Owner, as identified on the

Title Commitments, may purchase the Property for the

sum of $10,000,000.00. It is anticipated that the sale to

Redstone Acquisition shall close on a date which is on

or after eleven days and on or before fourteen business

days after the date of entry of this Final Judgment. The

Debtor and Redstone Acquisition may extend the closing

date by written agreement to a date which is twenty-one

days after the date of entry of this Final Judgment. No

further extensions may be made without the agreement

of Noble and Amber Ginther and the approval of this

Court.

16. This Final Judgment constitutes a final appealable

judgment pursuant to Rule 58 of the Federal Rules of

Civil Procedure, as modified by Rule 9021 of the Federal

Rules of Bankruptcy Procedure. This Final Judgment

shall also be docketed in the Debtor’s main bankruptcy

case, being case No. 98-32663-H4-11, and shall

represent final disposition of both the Adversary

Proceeding and the Debtor’s Motion for Authority to

Sell Property Free and Clear of Liens and Encumbrances

Pursuant to 11 U.S.C. 363.

38a

Appendix E

Dated: 3/1/00

s/ William Greendyke

UNITED STATES BANKRUPTCY

JUDGE

Presented by:

s/ David P. McClain

David P. McClain

State Bar No. 13386020

McCLAIN & SIEGEL, P.C.

10565 Katy Freeway, Suite 450

Houston, Texas 77024

Telephone: (713) 722-7500

Facsimile: (713) 722-9675

Attorney for Debtor

s/ Julia A. Cook

Julia A. Cook

State Bar No. 01196200

SCHLANGER, MILLS, MAYER & SILVER, L.L.P.

109 North Post Oak Lane, Suite 300

Houston, Texas 77024

Telephone: (713)735-8561

Facsimile: (713) 785-1700

Attorney for Redstone Properties, LLC

and Redstone El Dorado Acquisition, L.P.

39a

Appendix E

s/ John F. Higgins (signed by permission by JAC)

John F. Higgins

State Bar No. 09597500

PorRTER & HEDGEs, L.L.P.

700 Louisiana St., 35th Floor

Houston, Texas 77002-2764

Telephone: (713) 226-0600

Facsimile: (713) 228-1331

Attorney for the Official Unsecured

Creditors’ Committee

s/ Joseph M. Hill

Joseph M. Hill

State Bar No. 09645500

CaGE, HILL & NieHaus, L.L.P.

5851 San Felipe, Suite 950

Houston, Texas 77057

Telephone: (713) 789-0500

Facsimile: (713) 974-0344

Attorney for Nucorp, Inc.

Approved as to form:

s/ Barry A. Brown (signed by permission by JAC)

Barry A. Brown

State Bar No. 03093000

7322 Southwest Freeway, Suite 1100

Houston, Texas 77074

Telephone: (713) 981-3880

Facsimile: (713) 981-3881

Attorney for Tebear Investments, Inc.

40a

Appendix E

Approved as to Form Only:

s/ Hayden Burns

Hayden Burns

State Bar No. 03456000

Burns, WooLey & MarsEGLiA, L.L.P.

1111 Bagby, Suite 4900

Houston, Texas 77002

Telephone: (713) 651-1559

Facsimile: (713) 651-0817

Attorney for Amber Ginther and

Noble C. Ginther, Jr.

Approved as to Form except as to

Paragraphs 5 and 14:

s/ Berry D. Bowen

Berry D. Bowen

State Bar No. 02721050

3100 Richmond Ave., Suite 500

Houston, Texas 77098

Telephone: (713) 5210-3525

Facsimile: (713) 521-3575

Attorney for Fergus M. Ginther and

Adriana N. Ginther

4la

Appendix E

Approved as to Form as to Paragraph 13 Only:

s/ Hal F. Morris

signed by permission

Edith Stuart Phillips

Hal F. Morris

Assistant Attorney General

Bankruptcy & Collections Division

P.O. Box 12548

Austin, Texas 78711-2548

Telephone: (512) 463-2173

Facsimile: (512) 482-8341

Attorney for Texas Natural Resource

Conservation Commission

42a

APPENDIX F — ORDER OF THE UNITED STATES

BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION ON

MOTION TO DISMISS DATED AND

ENTERED JUNE 24, 1998

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CASE NO. 98-32663

CHAPTER 11

IN RE:

THE GINTHER TRUSTS,

A TEXAS JOINT VENTURE

Debtor.

ORDER ON MOTION TO DISMISS

The Court has considered the Motion to Dismiss and

for Sanctions filed by Elton M. Hyder, III, et al. and finds

that the relief requested should be granted in part. The Court

finds that the case should be dismissed unless the Petition

and Schedules are amended within the time and in the manner

ordered herein, but that sanctions should not be imposed.

It is therefore,

ORDERED, that this case shall be dismissed without

further order of the Court unless Debtor, on or before June

26, 1998: (a) amends the Petition, Schedules and Statement

of Financial Affairs to provide that it is a joint venture

composed solely of the Nobel C. Ginther Grantor Trust

43a

Appendix F

a/k/a N.C. Ginther Grantor Trust; and (b) amends its

Schedules and Statement of Financial Affairs to provide that

the only property of the joint venture comprising Debtor’s

bankruptcy estate is its interests in or relating to the el Dorado

Golf Club, Inc. and the real estate known as the “El Dorado

Ranch” described in Debtor’s existing Schedules as

“undivided interest in approximately 2,033 acres of real

property located in Harris County, Texas.” It is further,

ORDERED that no other property, whether listed in the

Debtor’s existing Schedules or otherwise, is property of the

Debtor’s bankruptcy estate or subject to the automatic Stay

pursuant to 11 U.S.C. § 362. It is further,

ORDERED that the Debtor shall have the exclusive ri ght

to file a plan of reorganization up to and including September

9, 1998, and, if the Debtor files a plan within such exclusive

period, the Debtor shall have the exclusive right to seek

confirmation of a plan up to and including November 6, 1998.

It is further,

ORDERED that the deadline for filing Proofs of Claim

shall be extended to and expire on July 31, 1998. It is further,

ORDERED that a special meeting of creditors pursuant

to 11 U.S.C. § 341 shall be July 15, 1998 at 1:30 p.m. at 515

Rusk, Room 3401, Houston, Texas 77002. It is further,

ORDERED that the Clerk of Court shall serve a copy of

this Order on all creditors and parties in interest listed on

the mailing matrix or who have file notices of appearance in

this case.

44a

Appendix F

SIGNED on June 24, 1998.

s/ William Greendyke

UNITED STATES BANKRUPTCY

JUDGE

APPROVED AS TO FORM:

s/ Barnet B. Skelton, Jr.

Barnet B. Skelton, Jr.

State Bar No. 18456400

Fed Adm. No. 6962

909 Fannin, Suite 3845

Houston, Texas 77010

(713) 659-8761 — Phone

(713) 659-8764 — Fax

ATTORNEY FOR MOVANTS

David P. McClain, P.C.

s/ David P. McClain

David P. McClain

State Bar No. 13386020

6200 Texas Commerce Tower

600 Travis

Houston, Texas 77002

(713) 223-7744 — Phone

(713) 223-7747 — fax

ATTORNEY FOR THE GINTHER

TRUSTS, A TEXAS JOINT VENTURE

45a

Appendix F

s/ Nancy Holley

Nancy Holley

State Bar No. 09875550

Office of the United States Trustee

515 Rusk, Room 3516 j

Houston, Texas 77002 ;

(713) 718-4663 — Phone

(713) 718-4670 — Fax

ATTORNEY FOR THE UNITED STATES TRUSTEE

46a

APPENDIX G — ORDER OF THE UNITED STATES

BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION

AFFIRMING “ORDER RESCINDING ORDER” AND

“ORDER DISPERSING FUNDS” DATED JANUARY 3,

2001 AND ENTERED JANUARY 4, 2001

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CIVIL ACTION NO. H-00-1691

FERGUS M. GINTHER and ADRIANA N. GINTHER

Appellants,

versus

CHARTER TITLE COMPANY; NUCORP, INC.;

and DON J. DAVIS

Appellees.

ORDER

Pending before the Court is an appeal by Appellants

Fergus M. Ginther and Adriana N. Ginther (“Ginthers”) of

three orders of the United States Bankruptcy Court for the

Southern District of Texas (“bankruptcy court’) dated April

10, 2000: first, an “Order Depositing Interpleader Funds Into

the Registry of the Court in an Interest-Bearing Account’:

second, an “Order Rescinding Order”; and third, an “Order

Dispersing Funds.” Having considered the parties’

47a

Appendix G

submissions and the applicable law, the Court finds that the

orders of the bankruptcy court should be AFFIRMED.

I.

On March 11, 1998, The Ginther Trusts (“Debtor”) filed

a voluntary petition for bankruptcy relief. The bankruptcy

court held a trial on January 27, 2000, to consider a motion

by the Debtor to sell its 51% property interest in the

El Dorado Ranch located in Harris County, Texas. In an order

dated march 1, 200, the bankruptcy court held that Nucorp,

a co-owner of the El Dorado Ranch was entitled to a 9.375%

interest in the net proceeds of the sale of the property

(Instrument No. 19, Ex. 1 at 13). In addition, the court ruled

that appellee Don J. Davis (“Davis”), a majority shareholder

in Appellee Nucorp, Inc. (“Nucorp”), would receive

$350,000.00 pursuant to a previously arranged fee agreement.

The sale of the El] Dorado Ranch closed on March 23, 2000.

Appellee Charter Title Company (“Charter”) handled the

closing of the sale.

On March 3, 2000, following the bankruptcy court’s final

judgment, the Ginthers sent a letter to Charter expressing

their objection to the disbursement of any proceeds to Nucorp

or Davis. The letter requested that Charter “either retain the

funds in an interest bearing account or deposit any funds or

proceeds otherwise to be disbursed to Don J. Davis or

NuCorp, Inc. from the [property] sale [ ] into the registry of

the Bankruptcy Court or the registry of the 270th District

Court and interplead the claims of the Ginthers, Davis and

NuCorp in that proceeding.” (Instrument No. 18, Ex. 1(B),

at 1). Consequently, on approximately March 27, 2000,

48a

Appendix G

Charter filed an interpleader with the bankruptcy court and

tendered the net proceeds of the property sale into the court’s

registry. (/d. Ex. 1, at 2).

On April 10, 2000, the bankruptcy court issued three

orders, two of which are now the subject of the Ginthers’

appeal. First, the bankruptcy court ordered that the

interpleaded funds be deposited into the registry of the court

in an interest-bearing account. (Instrument No. 18, Ex. 2).

Second, the bankruptcy court then rescinded the previous

order because “the funds ordered interplead into the Registry

by Charter [ ] cannot be disbursed by the Clerk prior to a

seven-day clearing period ... [and] a more prompt

disbursement is necessary under the circumstances and in

light of its prior orders and judgment in this case.” (Jd.

Ex. 3). Third, the bankruptcy court ordered that the

interpleaded funds be endorsed to Joseph M. Hill, the

attorney for Nucorp and Davis. Upon receipt, Hill was

ordered to disburse the funds to Nucorp and Davis.

On April 19, 2000, in an emergency proceeding

requested by the Ginthers, Judge Lynn N. Hughes of the

United States District Court for the Southern District of Texas

denied the Ginthers’ motion to stay the bankruptcy court’s

April 10, 2000, disbursement order pending appeal.

(Instrument No. 12). Pursuant to Judge Hughes’ order, the

Ginthers’ filed their appellate brief on April 26, 2000.

(Instrument No. 16). In their appeal, the Ginthers contend

that the bankruptcy court did not have jurisdiction over

Charter’s interpleader because it did not implicate “the

debtor, its estate[,] or the administration thereof.” (/d. at 4).

The Ginthers also argue that the bankruptcy court’s orders

49a

Appendix G

deprived them of due process of law because they “were

entitled to have their claim heard as in an ordinary civil

action.” (/d. at 5). Finally, the Ginthers contend that this

Court has original jurisdiction over the interpleader. That

is, according to the Ginthers, the interpleader “arises” under

28 U.S.C.A. § 1335 (2000).

Nucorp and Davis filed their brief on April 28, 2000.

(Instrument No. 20). They maintain that the bankruptcy

court’s orders “were entered merely to enforce the

[bankruptcy court’s] prior ruling. As such, there was nothing

new in those orders, and nothing that [the] Ginther[s] could

separately appeal.” (Jd. at 5). Nucorp and Davis next argue

that under section 363(j) of the Bankruptcy Code the

bankruptcy court was authorized to make a determination of

the rights of co-owners of property sale proceeds. In any

event, according to Nucorp and Davis, the bankruptcy court

had ancillary jurisdiction over the interpleader because the

proceeds of the property sale had a direct relation to property

or assets of the Debtor. Finally, Nucorp and Davis assert

that the Ginthers are estopped from challenging the proceeds

distribution because, following the bankruptcy court’s final

judgment, the Ginthers sought relief in state court. They

contend that the issue has “already been fully considered

and rejected by the state court.”

Il.

The district court review de novo the decisions of the

bankruptcy court on matters of law. See Jn re Mendoza, 111

F.3d 1264, 1266 (Sth Cir. 1997). Bankruptcy court findings

of fact are reviewed under the clearly erroneous standard.

50a

Appendix G

See Fed. R. Bankr. P. 8013. However, a finding of fact

premised on an improper legal standard or on a proper legal

standard that is improperly applied “losses the insulation of

the clearly erroneous rule.” See In re Missionary Baptist

Found. Of Am., 818 F.2d 1135, 1142 (Sth Cir. 1987).

Il.

The Ginthers contend in this appeal that the bankruptcy

court was without jurisdiction to entertain the interpleader

filed by Charter. Consequently, the Ginthers maintain, the

bankruptcy court’s order directing the disbursement of the

proceeds from the sale of the debtor property to Nucorp and

Davis was improvidently issued. In contrast, Nucorp and

Davis assert that the bankruptcy court was merely enforcing

the final judgment it rendered on March 1, 2000. According

to Nucorp and Davis, the bankruptcy court’s disbursement

order was “entered merely to enforce [its] prior ruling. As

such, there was nothing new in [the disbursement order],

and nothing that [the] Ginther[s] could separately appeal.”

(Instrument No. 20, at 5).

The Court finds Nucorp and Davis’ reasoning persuasive.

The Ginthers’ assertion that the bankruptcy court “should

have adjudicated the competing claims prior to order

dispersal,” (Instrument No. 16, at 5), ignores the reality that

the bankruptcy court approved Nucorp’s share of the

proceeds in the March 2000 final judgment. In that judgment,

the bankruptcy court held that “Nucorp, Inc. is the record

owner of a 9.375% interest in the Property as reflected by

the Title Commitments and has complete authority to sell or

otherwise deal with such 9.375% interest in the Property.”

S5la

Appendix G

(Instrument No. 19, Ex. 1, at 13). The bankruptcy court also

ruled that “this Final Judgment constitutes a final order of

sale regarding the sale of the Property . . . notwithstanding

any subsequent determination of [the Ginthers’] state law

claims against Nucorp, Inc. and Don Davis.” (/d).

Ironically, although the Ginthers now object to the

bankruptcy court’s jurisdiction over Charter’s interpleader,

that proceeding was precisely the course of action they

recommended to Charter. In a letter dated two days after the

bankruptcy court’s final judgment, the Ginthers’ attorney

asserted an interest in the proceeds and requested that Charter

“either retain the funds in an interest bearing account or

deposit any funds or proceeds otherwise to be disbursed to

Don J. Davis or NuCorp, Inc. from the [property] sale [ ]

into the registry of the Bankruptcy Court . . . and interplead

the claims of the Ginthers, Davis and NuCorp in that

proceeding.” (Instrument No. 18, Ex. 1(B), at 1). In short,

the Ginthers desire to have their cake and eat it too.' In likely

anticipation that Charter would seek to avoid liability arising

from its disbursement of the proceeds, the Ginthers suggested

an interpleader in order to set the stage for an otherwise

‘untimely appeal of the bankruptcy court’s final judgment

issued on March 1, 2000.

The Ginthers correctly noted in their March 3, 2000,

letter to Charter that pursuant to the bankruptcy court’s final

1. This aphorism stems from the writings of English author

John Heywood. Originally, the adage was expressed as: “Would ye

both eat your cake and have your cake?” This and other colloquial

English phrases were first printed in The Proverbs of John Heywood

in 1546.

52a

Appendix G

judgment, they were entitled to object to the distribution for

the sale proceeds. In the final judgment however, the

bankruptcy court clearly ruled that it would be the forum to

address any objections. According to the bankruptcy court:

In the event an objection to the distribution of

funds to a Co-Interest Owner is filed and received

by Charter [ ], . . . Charter [ ] is hereby authorized

to retain any such funds in the interest-bearing

account pending further Order of this Court as

to the proper. distribution of such funds or to

deposit such funds into the registry of this Court,

or if such deposit is refused by this Court, any

other court of competent jurisdiction.

(Instrument No. 19, Ex. 1, at 11) (emphasis added).

Indeed, the bankruptcy court’s April 10, 2000, order

disbursing the funds awarded in this final judgment

represents its enforcement of the March 2000 final judgment.

See In re Chateauguay Corp., 201 B.R. 48, 62 (Bankr.

S.D.N.Y. 1996) (holding bankruptcy courts have “Inherent

jurisdiction to interpret and enforce its own orders and to

determine disputes”); see also In re Paris Indus. Corp., 132

B.R. 504, 508 (Bankr. D. Maine 1991) (holding that

bankruptcy courts have the authority to “enforce prior orders

and ‘secure or preserve the fruits and advantages of a

judgment or decree rendered therein. ... The proceeding

being ancillary and dependent, the jurisdiction of the court

follows that of the original cause .. .”). Although it was the

result of an interpleader, the bankruptcy court’s order merely

reiterated the final judgment. Accordingly, the Ginthers’ true

53a

Appendix G

means of redress of the bankruptcy court’s decision to grant

part of the proceeds to Nucorp and Davis was through a direct

appeal of the final judgment, not of the April 2000

disbursement order.

IV.

Based on the foregoing, the Court finds that the

bankruptcy court’s orders dated April 10, 2000, should be

AFFIRMED. The Court additionally finds that, because any

further appeals would be frivolous, this Order should not be

stayed.

The Clerk shall enter this Order and provide a copy to

all parties.

SIGNED on this the 3rd day of January, 2001, at

Houston, Texas.

s/ Vanessa D. Gilmore

VANESSA D. GILMORE

UNITED STATES DISTRICT

JUDGE

54a

APPENDIX H — ORDER OF THE UNITED STATES

DISTRICT COURT FOR THE SOUTHERN DISTRICT

OF TEXAS, HOUSTON DIVISION DENYING MOTION

FOR STAY PENDING APPEAL DATED

AND ENTERED APRIL 11, 2000

UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF TEXAS

MC ACTION H-00-110

Ginther

versus

Charter Title

CONFERENCE MEMORANDUM

Date: 4-18-00

At the conference, these rulings were made:

(1) Motion for stay is denied (1).

(2) Ginther has until noon on April 21 to abandon in claim.

(3) If Ginther persists in its claim, Ginther must file a brief

by April 19, 2000.

(4) Defendants must respond by April 21, 2000.

55a

APPENDIX I — ORDER OF THE UNITED STATES

BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION

DISPERSING FUNDS DATED AND

ENTERED APRIL 10, 2000

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CASE NO. 98-32663-H4-11

IN RE:

THE GINTHER TRUSTS

DEBTOR

ADV. NO: 99-3058

THE GINTHER TRUSTS

Plaintiff

Vv.

NOBLE C. GINTHER, JR., ET AL and

CHARTER TITLE COMPANY

Defendants

ORDER DISPERSING FUNDS

In accordance with the court order allowing Charter Title

Company to place funds in Court’s registry in the respective

56a

Appendix I

amounts of $511,405.56, $350,000.00, and $224,352.38,

it is hereby ORDERED

3

The Clerk of Court is authorized to endorse the above-

referenced checks to Joseph Hill.

Upon receipt, Joseph Hill is Ordered to dispense the funds

to the following entities:

A) De Lange, Hudspeth, McConnell & Tibbets, L.L.P.

in the amount of $4,856.00;

B) Nucorp, Inc. in the amount of $509,129.84;

C) Don J. Davis in the amount of $223,334.47; and

D) Don J. Davis in the amount of $348.427.63.

Within 10 days of the entry of this order, Joseph Hill is

directed to file a certificate certifying that the above-

referenced disbursements were made in accordance with

this Order.

Signed this 10th day of April, 2000.

s/ William Greendyke

UNITED STATES BANKRUPTCY

JUDGE

57a

APPENDIX J — ORDER OF THE UNITED STATES

BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION

RESCINDING ORDER DATED AND

ENTERED APRIL 10, 2000

IN THE UNITED STATES BANKRUPTCY COURT

FOR THE SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

CASE NO. 98-32663-H4-11

IN RE:

THE GINTHER TRUSTS

DEBTCR

ADV. NO: 99-3058

THE GINTHER TRUSTS

Plaintiff

Vv.

NOBLE C. GINTHER, JR., ET AL and

CHARTER TITLE COMPANY

Defendants

ORDER RESCINDING ORDER

This matter came before the Court on April 10, 2000.

At that hearing, the Court signed an Order Depositing

58a

Appendix J

Interpleader Funds into Registry of the Court in an Interest-

Bearing Account. Subsequent to that hearing, the Order was

entered by the Clerk’s Office.

The Court has now learned that the “original Order

Depositing Interpleader” was entered improvidently. It has

come to the Court’s attention that the funds ordered

interplead into the Registry by Charter Title cannot be

disbursed by the Clerk prior to a seven-day clearing period.

It is the Court’s conclusion that a more prompt disbursement

is necessary under the circumstances and in light of its prior

orders and judgment in this case. Consequently, by separate

form of order, the Clerk shall be authorized to receive from

Charter three checks in the amounts recited and to endorse

them in favor of Joseph M. Hill, who shall in turn be given

specific disbursement instructions by the Court. The

foregoing tender to the Clerk for endorsement shall constitute

sufficient compliance with this Court’s order for Charter to

“pay into the Registry” for interpleader purposes.

Therefore, for good cause found, it is hereby ORDERED

that the Order Depositing Interpleader Funds into Registry

of the Court in an Interest-Bearing Account is rescinded.

Signed this 10th day of April, 2000.

s/ William Greendyke

UNITED STATES BANKRUPTCY

JUDGE

59a

APPENDIX K — ORDER OF THE UNITED STATES

BANKRUPTCY COURT FOR THE SOUTHERN

DISTRICT OF TEXAS, HOUSTON DIVISION

DEPOSITING INTERPLEADER FUNDS INTO

THE REGISTRY OF THE COURT IN AN INTEREST-

BEARING ACCOUNT DATED AND

ENTERED APRIL 10, 2000

UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF TEXAS

HOUSTON DIVISION

NO. 98-32663-H4-11

(CHAPTER 11)

In re:

THE GINTHER TRUSTS,

a Texas joint venture,

Debtor

ADVERSARY NO. 99-3058

THE GINTHER TRUSTS,

a Texas joint venture

Plaintiff

VS.

NOBLE C. GINTHER, JR., ET AL

Defendants

60a

Appendix K

ORDER DEPOSITING INTERPLEADER FUNDS

INTO THE REGISTRY OF THE COURT IN AN

INTEREST-BEARING ACCOUNT

On March 29, 2000, Defendant, Charter Title Company,

filed with the Court its Motion for Interpleader, wherein it

requested that the funds held by it be deposited into the

registry of the court. The Court, having examined such

interpleader, and being of the opinion that such funds should

be deposited in an interest-bearing account, it is ORDERED

that the District Clerk place the funds interpled by Charter

Title Company, in the respective amounts of $511,405.56,

$350,000.00 and $224.352.38, totaling $1,085,757.94, into

an interest-bearing account at an approved depository

institution.

SIGNED this 10th day of April, 2000.

s/ William Greendyke

UNITED STATES BANKRUPTCY

JUDGE

6la

APPENDIX L — EXCERPTS FROM FIFTH AMENDED

AND RESTATED REVOCABLE TRUST AGREEMENT

DATED APRIL 7, 1989

FIFTH AMENDED AND RESTATED

REVOCABLE TRUST AGREEMENT

THE STATE OF TEXAS

COUNTY OF HARRIS

WHEREAS, NOBLE C. GINTHER and MINNIE LEE

GINTHER (the “Grantors”) created a revocable trust

agreement on the 29th day of December, 1986, with NOBLE

C. GINTHER as the Trustee (the “Trustee”’), such revocable

trust being known as the GINTHER REVOCABLE TRUST;

and

NOW THEREFORE, the trust agreement, known as the

Ginther Revocable Trust, as amended and restated by the

First Amendment, Second Amendment, Third Amendment

and Fourth Amendment is hereby amended and restated in

its entirety for the fifth time (“Fifth Amendment”) on this |

the 7th day of April, 1989 as follows, it being the express

intentions of both of the Grantors that any revocation of such

trust agreement heretofore attempted is wholly ineffective,

null and void:

THIS FIFTH AMENDED AND RESTATED

REVOCABLE TRUST AGREEMENT made and entered

into this 7th day of April, 1989, between NOBLE C. GINTHER

(the “Husband”) and MINNIE LEE GINTHER (the “Wife’’),

62a

Appendix L

of Houston, Texas as Grantors (the “Grantors”), and NOBLE

C. GINTHER , of Houston, Texas, as Trustee (the “Trustee’’).

ARTIC! I — BENEFICIARIES

AlD DISTRIBUTIONS

1.1 The trust initially created by this trust instrument

shall be known as the “GINTHER REVOCABLE TRUST.”

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.

* *” *

1.4 Following the death of the first Grantor to die

(hereafter called the “deceased Grantor”), 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 constituted the community and separate property of

the surviving Grantor (hereinafter called the “surviving

Grantor”). This share, which shall be known by the name of

the surviving Grantor (though hereinafter called the

“surviving Grantor’s Trust”), shall be held, administered and

distributed as provided in Article II. The other share shall

initially contain that portion of the trust property which

constituted the community and separate property of the

deceased Grantor. This share, which shall be known by the

name of the deceased Grantor (though hereinafter called the

“deceased Grantor’s Trust’), shall be held, administered and

distributed as provided in Article III.

* * *

63a

Appendix L

ARTICLE II — SURVIVING GRANTOR’S TRUST

* * *

2.5 Upon the death of the surviving Grantor, any accrued

but unpaid net income of the surviving Grantor’s Trust shall

be distributed to the surviving Grantor’s estate and the

remaining unappointed trust principal of the surviving

Grantor’s Trust (which remains after making any payments

provided in section 2.4), together with all property received

by the Trustee under the Will of the surviving Grantor and

all other property received by the Trustee as the result of the

death of the surviving Grantor, shall be added to the principal

of the deceased Grantor’s Trust to be held, administered and

distributed as provided in Article III as a part of the deceased

Grantor’s Trust.

* * *

ARTICLE IV — TRUSTEE APPOINTMENTS

4.] If the Husband resigns or otherwise ceases to act as

Trustee, then the Wife and RIVER OAKS TRUST

COMPANY shall immediately become.Co-Trustees of all

trusts created by this Trust Agreement. On the death of the

first Grantor to die, the surviving Grantor and RIVER OAKS

TRUST COMPANY shall immediately become Co-Trustees

of all trusts created by this Trust Agreement to serve with

any Trustee of Trustees then serving. Unless another meaning

is Clearly indicated or required by context of circumstance,

the term “Trustee” shall mean and include any co-fiduciaries,

alternates or successors.

* 2K * *