Electronically FILED by Superior Court of California, County of Los Angeles 4/2/2019 8:00 AM Sherri R. Carter, Executive Officer/Clerk, By Nancy Jue, Deputy Clerk
Hearing Information: 6/11/2019 8:30 AM
Assigned for all purposes to: Johnson, Barbara R., Judicial Officer:Stanley Mosk Dept. - 11

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2

ALAN S. WATENMAKER,ESQ.(SEN: 54766)
ERIC M.TOKUYAMA,ESQ.(SEN: 182217)
HOFFMAN,SAEEAN & WATENMAKER
A Professional Corporation

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10880 Wilshire Eoulevard, Suite 2200

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Los Angeles, California 90024
Telephone No: (310)470-6010
Fax No: (310)470-6735

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Attorneys for ADRIA ROEIN PETTY,
Eeneficiary, Petitioner

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SUPERIOR COURT OF CALIFORNIA

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COUNTY OF LOS ANGELES

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Case No.

In the Matter of

PETITION FOR ORDER INSTRUCTING
TRUSTEE TO IMMEDIATELY FUND

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19STPB03034

THOMAS EARL PETTY LIVING

ARTISTIC PROPERTY ENTITY

TRUST dated 2/24/99, as amended
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[Probate Code §17200(b)(6)]

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Date:
Time:

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Dept:

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Petitioner, ADRIA ROEIN PETTY,as a beneficiary ofthe THOMAS EARL

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PETTY LIVING TRUST dated 2/24/99, as amended and restated (the "Trust"), hereby Petitions

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for an Order Directing Trustee to Immediately Fund the Artistic Property Entity (the "Petition")

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as follows:
PURPOSE OF PETITION

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24

Hoffman

Sabban &
WATENMAKER

1.

The deceased Grantor was a singer, songwriter, £ind musician of world

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wide renown in Rock music. He specifically directed in his Trust that his extensive "Artistic

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Properties" were to be held and managed by a limited liability company (the "Artistic Property

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Entity"). That Entity is to be allocated 1/3 to a trust for the benefit ofthe Grantor's surviving

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spouse, DANA PETTY("DANA"), who is also the current Trustee ofthe Trust, and 2/3 to a
-1PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

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trust for the benefit of the Grantor's two adult daughters, Petitioner herein and her sister,

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ANNAKIM VIOLETTE,formerly known as ANNA KIM PETTY("KIM," whose Joinder in this

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Petition will be filed herein).

2.

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Property Entity was formed by the Trustee on March 28,2018. However,the Artistic Property

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Entity has not yet been funded with the Artistic Property assets, as directed by the Grantor in the

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Trust. A true and correct copy of the Articles of Organization for the Artistic Property Entity

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(known as "Petty Unlimited LLC"),is attached hereto as Exhibit "A." The LLC Statement of

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Information, filed on June 4, 2018,expressly identifies DANA,KIM,and Petitioner as Managers

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ofthe LLC. A true and correct copy ofthe Statement ofInformation is attached hereto as

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Exhibit «B."

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(Paragraph 5.2 of Article 5 of the Trust, emphasis added).
4.

However, it has now been more than sixteen(16) months since the

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Grantor's death on October 2, 2017, and it has been nearly one year since the Articles of

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Organization were filed forming the Artistic Property Entity. Petitioner and KIM,individually

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and through their respective counsel, have attempted to be allowed to participate in the

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management ofthe Artistic Property. Their efforts to participate in the management ofthe

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Artistic Property Entity have been resisted by the Trustee, who has claimed to be the sole

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authority over the management of the Artistic Property assets.
5.

DANA,as Trustee, has not yet funded the Artistic Property Entity with the

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Artistic Property, and has refused to fund it even after being requested to do so. DANA asserts

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that because the Artistic Property assets remain in the main Trust at this time, and not in the

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Artistic Property Entity, she, as Trustee, has the sole authority to manage and administer the

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Artistic Property assets, contrary to the explicit wishes of the Grantor.

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Watenmaker

The Grantor specifically directed that DANA,KIM and Petitioner "shall

be entitled to participate equally in the management of the Artistic Property Entity..."

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Hoffman

3.

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Sabban &

The limited liability company specified in the Trust as the Artistic

6.

Petitioner requests herein that the Court order DANA,as Trustee, to

immediately fund the Artistic Property Entity in order to carry out the deceased Grantor's explicit
-2PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

 1

direction that DANA,KIM and Petitioner "participate equally in the management" of the Artistic

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Property.

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BACKGROUND

7.

Trust. THOMAS EARL PETTY (herein the "Grantor") created the Trust

6 on February 24, 1999, restated it in its entirety on September 7, 2006 in the Third Amended and
7 Restated Thomas Earl Petty Living Trust(a copy of which is attached hereto as Exhibit "C"),
8

and further amended it on December 18, 2009 in the First Amendment to the Third Amended and

9 Restated Thomas Earl Petty Living Trust(a copy of which is attached hereto as Exhibit"D").
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8.

Article 5. Article 5 of the Trust provides for the division and allocation of

the Trust upon the Grantor's death. Paragraph 5.1 directs the Trustee to pay death-related

12 expenses and trust administration expenses during an administrative period.
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9.

Priority for Artistic Property. The Grantor's specific priority intentions

14 and specific directions for his "Artistic Property" are set forth in Paragraph 5.2 ofthe Trust,
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entitled "Creation ofthe Artistic Property Entity and Allocation of Interests Therein."

16 Paragraph 5.2 gives priority to setting up the management for the Artistic Property. It states:
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"The Trustee shall first set aside all of the Artistic Property (as that term

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is defined in Paragraph 15.2) held by the Trust Estate (or to be received by

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the Trust Estate as a result of the death of the Grantor)." [Emphasis

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added.]

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Paragraph 5.2 further directs the Trustee to create the Artistic Property Entity, and to allocate a

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1/3 membership interest therein to DANA's Marital Trust, and a 2/3 membership interest to

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Petitioner's and KlM's Issues' Trust.

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10.

Artistic Property Entity Never Funded. Petitioner understands that the

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Artistic Property Entity has been created under California law, as directed by Paragraph 5.2.

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However, because DANA,as Trustee, has not yet funded such Entity with the Artistic Property,

27 the Grantor's intent that DANA,KIM and Petitioner participate equally in the management of
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those assets is being thwarted.

-3Hoffman

Sabban &
Watenmaker

PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

 1

11.

Intent that Three Beneficiaries Participate Equally in Management.

2 Paragraph 5.2 clearly directs the equal management rights of beneficiaries DANA,KIM and
3

Petitioner in the Artistic Property:

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"With respect to the creation of the Artistic Property Entity, the Trustee is

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directed to create the governing documents of the Artistic Property Entity

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such that those of the Spouse, ADRIA and KIM who are living at the

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time....shall be entitled to participate equally in the management of the

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Artistic Property Entity...."[Emphasis added.]

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12.

Trust Directs Funding Bv Six (61 Months. Paragraph 5.1 of the Trust

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authorized an initial "Administrative Trust" period before funding the subtrusts such as those

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trusts for the benefit of DANA,KIM and Petitioner. The purpose of the Administrative Trust

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was to provide a period for the Trust's handling of death-related expenses and trust

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administration expenses. Now, however, more than sixteen(16) months have passed since the

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Grantor's death. The Grantor intended an "administrative period" before funding and

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distribution to subtrusts of no more than six (6) months. Paragraph 5.9, in pertinent part, states:

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"When the Trustee is directed to make a distribution of Trust assets or a

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division of Trust assets to separate Trust or shares on the death of the

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Grantor, the Trustee may .... defer that distribution or division until six

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(6) months after the Grantor's death."[Emphasis added.]

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13.

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Trustee Asserts Sole Management of Artistic Property. Instead of

funding of the Artistic Property Entity and distributing membership units thereof as directed to

22 the three beneficiaries' respective trusts within six (6) months from Grantor's October 2,2017
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death, DANA,as Trustee, has now delayed for more than sixteen (16) months, and has refused

24 upon request to go forward with such funding and distribution, to the detriment of Petitioner and
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KIM,and in contravention of the Grantor's specific instructions. DANA,as Trustee, has also

26 refused to recognize management input from Petitioner and KIM,asserting that she has sole

Hoffman

Sabban &
Watenmaker

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management rights as Trustee.

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///

PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

 1

14.

No Trust Reason to Delay Funding of Artistic Property Entity. There

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is no administrative reason for DANA,as Trustee, to continue to hold the Artistic Property assets

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in the Administrative Trust. The federal estate tax return was filed on or about January 2, 2019.

4 The period for the filing of claims against the Grantor's estate closed on October 2, 2018. No

5

Trust purpose is served by keeping the "Administrative Trust" period open at this time with

6 respect to the Artistic Property assets. In fact, to do so contravenes the Grantor's specific
7 direction in the Trust. It appears that DANA's primary purpose in maintaining the Artistic
8 Property assets in the Administrative Trust at this time is to maintain her sole management
9

authority over them.

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CURRENT ARTISTIC PROPERTY ACTIVITIES REQUIRE

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CO-EQUAL MANAGEMENT AS DIRECTED BY GRANTOR

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15.

Active Management Participation bv All 3 Beneficiaries Required.

14 The deceased Grantor's Artistic Property involves an active, ongoing music business enterprise

15 requiring expert and professional management to protect the value ofthe Artistic Property. Since
16 the Grantor's death, two additional albums ofthe Grantor's works have been released, and a third

17 release is pending. Petitioner and KIM should rightfully be participants in the marketing,

18 promotional, and artistic considerations regarding these releases and the other Artistic Property
19 assets, with the two-fold objective of(1)enhancing and preserving the deceased Grantor's

20 image/brand/reputation, and (2) maximizing the economic value and return ofthe Artistic
21

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Property, all in conformity with the Grantor's specific directions.

16.

Participation Needed to Protect Interests of Petitioner and KIM. The

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interests of DANA,KIM and Petitioner, as beneficiaries of the Artistic Property Entity, have

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vested as of the Grantor's date of death on October 2, 2017, subject to administration. In order

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for the vested interests of Petitioner and KIM to be protected. Petitioner herein requests an Order

26 directing DANA,as Trustee, to immediately fund the Artistic Property Entity with the Artistic
27 Property assets, as directed by the Trust. Moreover, because DANA,KIM and Petitioner are

28 expressly directed and intended to participate together in managing the Artistic Property Entity,
Hoffman

Sabban &
Watenmaker

PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

 undue delay in the funding of the Artistic Property Entity will result not only in the preclusion of
participation in the management of the Artistic Property by the Grantor's two daughters, contrary
to the Grantor's express direction, but may also threaten the parties' ability to harmoniously
collaborate in fulfillment of the Grantor's express wishes.

VENUE

17.

The principal place of administration of the Trust is Los Angeles County,

California.

PERSONS ENTITLED TO NOTICE

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18.

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A list of the names and address of the persons entitled to notice of these

proceedings is attached hereto as Exhibit "E".
19.

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No one has requested Special Notice herein.

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PRAYER

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WHEREFORE,Petitioner prays for an Order as follows:

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1.

Ordering the Trustee to immediately fund the Artistic Property Entity by

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immediately transferring the Artistic Property(as defined in Paragraph 15.2 of the Trust)from

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the Trust to the Artistic Property Entity.

2.

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Making such other Orders and awarding such other relief as the Court

deems proper.

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Dated

HOFFMAN,SABBAN & WATENMAKER
A Professional Corporation

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^okuyama
Attorneys for Petitioner

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H \CUENTS\Nq\Pelly\Pleadings\PT lo Fund APE v6.wpd

-6HOFFMAN
Sabban &
WATENMAKER

PETITION FOR ORDER INSTRUCTING TRUSTEE TO FUND ARTISTIC PROPERTY ENTITY

 VERIFICATION

I have read the foregoing PETITION FOR ORDER INSTRUCTING TRUSTEE
TO IMMEDIATELY FUND ARTISTIC PROPERTY ENTITY,and know its contents.

I am the Petitioner in this action. The matters stated in it are true of my own

knowledge except as to those matters which are stated on information and belief, and as to those
matters I believe them to be true.

I declare under penalty ofpeijury under the laws ofthe State oT^ifomia that the

foregoing is true and correct.

if

 
jr 11

U)

[I

n

Dated;

ADRIA ROBIN PETTY
y?.
1 :5
14

1.S

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\7

18

1.9
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23
24

HOFFUAN

SarhanA
watenmaker

-7PETITION FOR ORDER INSTRUCTING TRUSTFR TO FUND ARTISTIC PROPERTY ENTITY

  EXHIBIT A

01810110442
LLC-1

Secretary of State

Articles of Organization
Limited Liability Company(LLC)

Secretary of State

IMPORTANT — Read Insfrucflons before completing this form.

State of Gaiifomia
Piling Fee - $70.00

MAR 28 2018 .d-

Copy Fees - First page $1.00; each attachment page $0.50;
Certification Fee - $5.00

Note: LLCs may have to pay minimum $800 tax to the California Franchise Tax Board
each year. For more Information, go to httpsy/wwwM.ca.gov.
This Space For Office Use Only

1. Limited Liability Company Name(See Inslructlons-Musi contain an LLC ending such as LLC or L.LC. "LLC* will be added, if not Included.)

Petty Unlimited LLC

2, Business Addresses
a. Inlllai SIrsst Address of Designated Offioo in CoIIfemla - Do not enter a P.O. Box

State

city(no abbreviations)

Sherman Oaks

15260 Ventura Blvd., Suite 2100

OA
stale

City(no abbrevfaflons)

b. InlUat Mailing Address of LLC,If different than Item 2a

Zip Code

91403
Z^Code

3. Service of Process(Must provide either Individual OR Coiporation.)
INDIVIDUAL- Complete Items 3a and 3b only. Must Include agent's full name and Caflfomla street address.
a, California Agent's First Name (if sgenl Is not a corporation)

Middle Name

Bernard .

H.

b. Street Address Qf agent Is not a ccrpcralion)•Do not enter a P.O.Box

City(no abbrevIaHons)

15260 Ventura Blvd., Suite 2100

Suffix

Last Name

Gudvl

Sherman Oaks

stale

CA

Zip Code

91403

CORPORATION- Complete item 3c. Only include the name of the registered agent Corporation.
c. CaSfcmia Registered Corporate AgenfS Name (if agent is a corporation)-Do not complete Item 3a or 3b

4. Management(Select only one box)
The LLC will be managed by:

n One Manager

[✓]More than One Manager

Q All LLC Member(s)

5. Purpose Statement(Do not alter Purpose Statement)

The purpose of"the limited liabiiity company Is to engage in any lawful act or activity for which a limited liability company
may be organized under the California Revised Unlfonn Limited Liability Ckimpany Act.
6. The Information contained herein. Including in any attachments, is true and correcL

Dana York Petty
Organizer sign here
LLC-1(REV 04/2017)

Print your name here
2017 Cslllbmla Secretary of Slate
www.803.ca.gov/buslness/b8

EXHIBIT A

 j hefieby
hereby certify
wrfify {hat
that the
the ftxegoing
foregoing
transcript of
transcnpt
i
page(3)
of
page(s)

‘

i

./-.>

’5’

'r

«-

l

p}
".-j
1.

.j.

s

is
full,, true and
the
is a
afuu
and cofrect
correct copy of
oithe

original record
original
the
record in
in the
the. custody
ous‘ody of
of the
California Secrelaiy
California
Secretary of
Sm‘e's office.
of State's
office.

AP
APRR

11'22 2018
2013 W

Date:
Date:

CKSIj>q^
ALEX PADiLLA,
ALEX
Slate
gADiLLA, Seaatary
Sadatazy of
of Slate

 EXHIBIT 

18-312892
Secretary of state

LLC-12

statement of Information

FILED
Secretary of State

(Limited Liability Company) ^^3^

State of Califomia
JMPORTANT — This form can be filed online at biznie.sosxa.gov.

JUN 0 4 2018

Read instructions before compieting this form.
Rling Fee -$20.00

Copy Fees - First page $1.00;each attachment page S0.50;
Certification Fee < $5.00 plus copy fees

Above Space For Omce Use Only

1, Lim itcd Liability Company Name(Enter the exact name or the LLC. If you registered in calif omia using on aitemofe name, saoinstruclions.)

Petty Unlimited LLC
2. 12-Diglt Secretary ofState Entity(File) Number

3. State,Foreign Country or Place of Organization (only it fonned outside of Celtfomia)

201810110442
4. Bus iness Addresses

a. Street Addressof Princtpd Office- Do not fist a P.O. Box

City (no abbrena&ons)

Stale

Zip Code

Sherman Oaks

CA

b Mailing Address of LLC. Ifdifrorontthanltomda

City (noabbreviations)

Slate

Zip Code

c. Street Address cf Catiromla Cffco.if Itemda Is net in CalTomia- Do not list e P.O. Box

City (no abbreviations)

Slate

Zip Cede

15260 Ventura Blvd., Suite 2100

9M03

CA

If no managers have been appointed or elected, provide the nemo end address cf each member. At least one name and address

S Mnnaaerfs)or Mnmber/s)

^

listed. If the manager/member is an indnridual. complete Items Sa and 5e (leave Item Sb blank). If tha manager/member is

^' an eniiiy.cemplete Items Sb and Sc(leave Hem Sa blank). Note; The LLC cannot senro as its orMt manager or member. IftheLLC
has additional managers/members, enter the name(s)and address(es)on Form LLC-12A.

a. First Name,d an indVidual- Do not complete RemSb

Mlddte Name

Last Name

Dana

York

Petty

Suffix

b. Entity Name•Do notcomplete Item Sa

c. Address

City (no abbreviations)

c/o Bernard H. Gudvl, 15260 Ventura Blvd., Suite 2100

Sherman Oaks

State

CA

Zip Code

9M03

6. Service of Process (Must provide either tndhriduat OR Corporation.)
INDIVIDUAL - Complete items 6a and 6d only. Must tnclitde agent's lull name and CaGfomia street address.

a. CaGfomia Agents First IMame(d agert ts nota corporaioi^

Suffix

Middle Name

Last Name

Bernard

H.

Gudvl

b. Street Address(if ageri is not a corporakn)■ Do not entera P.O.Box

City (no abbrcviaGcns)

Stale

15260 Ventura Blvd., Suite 2100

Sherman Oaks

CA

Zip Code

91403

CORPORATION -Complete Item 8c only. Only include the name of the registered agent Corporelion.
c. Califomia Registeied Corporate Agents Name(if agent isa corporaloh)-Do not complete Item 6a or6b

7. Typo of Business
Describe the Vpeof busiiess or services of tha Limled Llabtity Ccmpsrv

hoWing company
8. Chief Executive Officer, if elected or appointed
a. First Name

Middle Name

b. Address

City (noabbre/ialions)

Last Name

Suffix

State

ZipCtMfe

9. The Information contained herein, including any attachments made part of this document, Is true and correct.

Dana York Petty
Date

LLC-t2(REV 01/2018)

Manager

Type or Rrint Nacre of Persoit Cotrpteling the Form

EXHIBIT B

page 1 of 2 l/^

Tdle

Signature

2018 Calibmia Secretary ofState
bizf!e.sos.ca.gov

 8-312892
Attachment to
Statement of Information

LLC-12A
Attachment

(Limited Liability Company)

A. Lim ited Liability Company Nam e(Enter the exact name on file w ith the California
Secretary of State.)

Petty Unlimited LLC

Above Space For Office Use Only
B. 12-Oigit Secretary of State Entity(File) Num ber

C. state, ForeignCountry.or Place of Organization (only ifformed outside of
California)

201810110442
0. List of Additional Manager(s) or Member(s)• If the manager/member is an indK/idual, enter the indh/iduars name and address. If the
manager/member is an entity, enter the entity's name and address. Note; The LLC cannot serve as its own manager or member.
2a. First Nanne-Do not complete Item 2b

Adrla

Middle Name

Last Name

Robin

Petty

Suftix

2b. Entity Name-Do nol complete Item 2a
City (noabbrfviations)

2c. Address

c/o Gerri Leonard, 11900 W. Olympic Blvd., Suite 410

Stale

Los Angeles

CA

Sa. First Name-Do not complete Item 3b
Anna
3b. Entity Name-> Do notcomplete Item 3a

MiddloName

Last Name

Kim

Petty

3c. Address

City (no abbreviations)

c/o Gerri Leonard, 11900 W. Olympic Blvd., Suite 410
4a. First Name-Do not complete Item 4b

Middle Name

Suttix

state

CA

Los Angeles

Zip Code

90064

Zip Code

90064
Suffix

Last Name

4b. Entity Name-Do not complete Item 4a

4c. Address

City (no abbreriations)

5a. First Name-Donot complete llemSb

Middle Name

state

Zip Code

Suffix

Last Name

5b. Entity I^Iame-Do notcomplete item Sa
5c. Address

Ctty (no abbreviations)

6a. FirstName-DonotcompletaI(em6b

Middle Name

State

Zip Code

Suffix

Last Name

6b. Entrty Name- Do not complete Item 6a
6c. Address

City (no abbreviations)

7a. First Name-Do not complete Item 7b

Middle Name

State

Zip Coda

Suffix

Last Name

7b. Entity l>Iame-Do notcomplete item 7a

7c. Address

City (no abbrwisticns)

8a. First Name- Do not complete Item 8b

Middle Name

Slate

Zip Code

Suffix

Last Name

6b. Entity Name-Do nol complete Item 8a
Sc. Address

City (no abbreviations)

LLC-12A - Attachment(REV 01/201S}

EXHIBIT 8

page 2 of 2 7^

State

Zip Code

2018 California Secretary ofState
l>izfil8.sos.ca.gov

 EXHIBIT 

FIRST AMENDMENT TO THE
THIRD AMENDED AND RESTATED

THOMAS EARL PETTY LIVING TRUST

This FIRST AMENDMENT TO THE THIRD AMENDED AND

RESTATED THOMAS EARL PETTY LIVING TRUST ("First Amendment")is entered
into between THOMAS EARL PETTY ("Grantor") and THOMAS EARL PETTY
("Trustee"),with reference to the following facts:

A.
On February 24,1999,the Grantor and Trustee executed the
Thomas Earl Petty Living Trust(the "Original Trust").
B.
On March 4,1999, the Grantor and the Trustee executed a
First Amendment to the Original Trust,

C.
On January 28,2002,the Grantor and the Trustee executed a
Second Amendment to the Original Trust.

D.
On August 20,2003,the Grantor and Trustee executed the
Amended and Restated Thomas Earl Petty Living Trust(the "First Amended Trust"),
thereby amending and restating the Original Trust in its entirety.
E.
On January 18,2005,the Grantor and Trustee executed the Second
Amended and Restated Thomas Earl Petty Living Trust(the "Second Amended Trust"),
thereby amending and restating the First Amended Trust in its entirety.

F.

On September 7,2006,the Grantor and Trustee executed the Third

Amended and Restated Thomas Earl Petty Living Trust(the "Third Amended Trust"),
thereby amending and restating the Second Amended Trust in its entirety.
G.
Pursuant to Paragraph 2.1 ofthe Third Amended Trust,the Grantor
reserved the right to amend the Third Amended Trust during his lifetime.
H.

The Grantor desires to amend the Third Amended Trust as

provided herein.
NOW,THEREFORE,the parties agree as follows:

I.

Paragraph 5.2 ofthe Third Amended Trust is hereby deleted in its

entirety and the following is substituted in lieu thereof:

Page 1,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

EXHIBIT C

 "5.2

Creation ofthe Artistic Property Entity and

Allocation ofInterests Therein. The Trustee shall first set aside all

ofthe Artistic Property(as that term is defined in Paragraph 15.2)
held by the Trust Estate(or to be received by the Trust Estate as a
result ofthe death of the Grantor). The Trustee is hereby directed
to create a California limited liability company(or such other

entity as the Trustee deems appropriate)(^e'Artistic Property
Entity')to hold the Artistic Property. The membership interests in
the Artistic Property Entity shall be held as follows:

(a)

Ifthe Spouse survives the Grantor,then the

Trustee shall allocate an undivided one-third (1/3) membership

interest(or other beneficial interest) in the Artistic Property Entity
to the Marital Trust to be created pursuant to Paragraph 5.3. Ifthe

Spouse does not survive the Grantor,then the allocation ofsuch
undivided one-third (1/3)interest in the Artistic Property Entity

pursuant to this Paragraph 5.2(a) shall lapse and such undivided
one-third (1/3)interest in the Artistic Property Entity shall be
added to the allocation pursuant to Paragraph 5.2(b).

(b) The Trustee shall allocate an undivided twothirds(2/3) membership interest(or other beneficial interest) in the
Artistic Property Entity to the Issue's Trust to be created pursuant
to Paragraph 5.3.

With respect to the creation of the Artistic Property Entity,the
Trustee is directed to create the governing documents ofthe

Artistic Property Entity such that those ofthe Spouse, ADRIA and
KIM who are living at the time ofcreation ofthe Artistic Property
Entity shall be entitled to participate equally in the management of

the Artistic Property Entity, even thou^ their respective economic
interests in the Artistic Property Entity are not equal."

2.

Paragraph 5.4 ofthe Third Amended Trust is hereby deleted in its

entirety and the following is substituted in lieu thereof:
"5.4

Allocation to Marital Trust: Alternate Distribution

of Marital Tmst Assets If Spouse Does Not Survive the Grantor.

Subject to the provisions ofParagraph 5.5, the Trustee shall
allocate certain ofthe assets of the Trust Estate as follows:

(a) Ifthe Spouse Survives the Grantor. Ifthe
Spouse survives the Grantor,the Marital Trust shall consist ofthe

Page 2,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993vl

 following property and shall be held, administered and distributed
in accordance with the provisions of Article 6:

(1)

Malibu Residence. The Trustee shall

allocate to the Marital Trust any interest held by the Trust Estate

(or to be acquired by the Trust Estate as a result ofthe death ofthe
Grantor)in that certain real property located at 27403 Pacific Coast
Highway, Malibu, California, including any insurance thereon and
any fiimiture, fiimishings and appliances located therein, but
subject to any encumbrances secured thereby (collectively, the
Malibu Residence'). Ifthe Trust Estate does not own an interest in
the Malibu Residence at the time ofoperation ofthis Paragraph

(and will not acquire such an interest in the Malibu Residence as a
result ofthe death ofthe Grantor),then the allocation contemplated
by this Paragraph 5.4(a)(1) shall be ofno force or effect.

(2)

Beach House Pronertv. The Trustee

shall allocate to the Marital Trust any interest held by the Trust

Estate(or to be acquired by the Trust Estate as a result ofthe death
ofthe Grantor)in that certain real property located at 21244
Pacific Coast Highway, Malibu, CaHfomia,including any
insurance thereon, but subject to any encumbrances secured
thereby (collectively, tiie'Beach House Property*). Ifthe Trust
Estate does not own an interest in the Beach House Property at the

time ofoperation ofthis Paragraph(and will not acquire such an
interest in the Beach House Property as a result ofthe death ofthe
Grantor), then the allocation contemplated by this Paragraph
5.4(a)(2) shall be ofno force or effect.

(3)

7nmp.ri7 Condo. The Trustee shall

allocate to the Marital Trust any interest held by the Trust Estate

(or to be acquired by the Trust Estate as a result ofthe death ofthe
Grantor)in that certain real property located at 6435 Zumeriz
Drive,#5, Malibu, California, including any insurance thereon, but
subject to any encumbrances secured thereby or any residential
real property which was purchased as a substitute residence and
which is owned by the Trust Estate (or will be acquired by the
Trust Estate as a result ofthe death ofthe Grantor)(the'Zumeriz

Condo'). Ifthe Trust Estate does not own an interest in the
Zumeriz Condo at the time ofoperation ofthis Paragr^h(and will
not acquire such an interest in the Zumeriz Condo as a result ofthe
death ofthe Grantor),then the allocation contemplated by this
Paragraph 5.4(a)(3)shall be ofno force or effect.

Page 3,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIYING TRUST

6308993V1

 (4)
Palisades Residence. The Trustee
shall allocate to the Marital Trust any interest held by the Trust
Estate(or to be acquired by the Trust Estate as a result ofthe death
ofthe Grantor)in that certain real property located at 766 Almar
Avenue,Pacific Palisades, California, including any insurance
thereon, but subject to any encumbrances secured thereby or any
residential real property which was purchased as a substitute
residence and which is owned by the Trust Estate(or will be
acquired by the Trust Estate as a result ofthe death ofthe Grantor)
(the 'Palisades Residence'). Ifthe Trust Estate does not own an
interest in the Palisades Residence at the time of operation ofthis

Paragraph (and will not acquire such an interest in the Palisades
Residence as a result ofthe death ofthe Grantor), then the
allocation contemplated by this Paragraph 5.4(a)(4) shall be ofno
force or effect.

(5)
One-Third Beneficial Interest in the
Artistic Property Entity. As stated in Paragraph 5.2, the Marital
Trust shall hold an undivided one-third (1/3)beneficial interest in
the Artistic Property Trust.

(6)

10% Interest in Balance ofthe

"RemaiTiing Gross Trust ^tate. The Trustee shall next allocate to
the Marital Trust property equal in value to ten percent(10%)of
the Remaining Gross Trust Estate(as hereafter defined). For
purposes ofthis Trust Agreement, the term Remaining Gross Trust
Estate' shall mean all the property held by the Trust Estate at the
date ofdeath ofthe Grantor(or to be acquired by the Trust Estate
as a result ofthe death ofthe Grantor), but specifically excluding
the following:
(A)

The Artistic Property;

(B) The property which is the
subject ofthe allocations contemplated by Paragraph 5.4(a)(1),

Paragraph 5.4(a)(2), Paragraph 5.4(a)(3) and Paragraph 5.4(a)(4);
(C) Any proceeds from life
insurance policies on the life ofthe Grantor; and
(D) Any proceeds from Qualified
Retirement Plans(as defined in Paragraph 10.2), and further
without deduction for

Page 4,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993vl

 1)

Death Taxes(as

defined in Paragraph 13.8(a));
2)
Other obligations
payable by the Trust Estate at the date of death ofthe Grantor; and
3)
Any administrative
expenses ofthe Trust or otherwise relating to the Grantor.
The value ofany property included
in the Remaining Gross Trust Estate shall be equal to the value of
such property as detennined on the federal estate tax return ofthe
Grantor. If any ofsuch property is not valued on the federal estate
tax return ofthe Grantor,then the value ofsuch property shall be
its net fair market value, as determined by the Trustee, using any
reasonable method determined by the Trustee,in the Trustee's sole
and absolute discretion. The Trustee's determination of which

assets are to be considered part ofthe Remaining Gross Estate
shall be binding upon all beneficiaries.
(b)
Alternate Allocation Ifthe Spouse Does Not
Survive the Grantor. Ifthe Spouse does not survive the Grantor,
the Trustee shall instead make the following allocations:
(1)

Specific Allocation to Dvlan's Trust.

IfDYLAN is living at the time ofoperation ofthis Paragraph
5.4(b)(1), then the Trustee shall allocate the following assets to a
separate Trust("Dylan's Trust')to be held, administered and
distributed in accordance with the provisions of Article 7:
(A) Cash or other property(but
specifically not including any interest in the Palisades Residence or
the Zumeriz Condo)equal in value to One Million Five Hundred
Thousand Dollars($1,500,000);
(B)

The Palisades Residence; and

(C)

The Zumeriz Condo.

If, however, neither the Spouse nor

DYLAN survives the Grantor, Dylan's Trust shall not be created,
and the allocation contemplated by this Paragraph 5.4(b)(1) shall
lapse and be ofno force or effect, and the property which would
o&erwise have been allocated pursuant to this Paragraph 5.4(b)(1)

Page 5,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V]

 shall remain as part ofthe Trust Estate, to be distributed as
hereinafter provided.

(2)
Contingent Allocation ofPalisades
Residence. IfDYLAN is not living at the time of allocation

pursuant to Paragraph 5.4(b)(1), but NANCY COSTICK is then
living, the Palisades Residence shall be allocated to a separate
Trust(TSfancy's Residence Trust'), to be held, administered and
distributed in accordance with the provisions of Article 8. The
Grantor has intentionally omitted to allocate any cash or other

liquid assets to Nancy's Residence Trust to cover the expenses of
the Palisades Residence. IfNANCY COSTICK is not living at the

time ofoperation ofthis Paragr£q)h 5.4(b)(2) the allocation
contemplated by this Paragraph 5.4(b)(2)shall lapse and be ofno
force or effect, and the property which would otherwise have been

allocated pursuant to this Paragraph 5.4(b)(2)shall remain as part
ofthe Trust Estate, to be distributed as hereinafter provided.
Ifthe Trust Estate does not own an interest

in one or more ofthe properties specifically identified in this

Paragraph 5.4(b) at the time of operation ofthis Paragraph 5.4(b)
(and will not acquire an interest in such property as a result ofthe
death ofthe Grantor),thereby making that item imavailable for
allocation, then the allocation ofthe unavailable property

contemplated by this Paragraph 5.4(b)shall be ofno force or effect
and nothing shall be substituted in its place.

Other than as specifically provided in Paragraph 5.4(b),ifthe

Spouse does not survive the Grantor, then the Marital Trust shall
not be created and all ofthe assets that would have been allocated

to the Marital Trust under the provisions ofParagraph 5.4(a)shall
remain as part ofthe Trust Estate, be allocated to the Issue's Trust
in accordance with Paragraph 5.6."

3.

Paragraph 9.7 ofthe Third Amended Trust is hereby deleted in its

entirety and the following is substituted in lieu thereof:
"9.7

Contingent Beneficiaries. Ifat the time ofthe death

ofthe Grantor,or at any later time before full distribution ofthe

Trust Estate, no other isposition ofthe Issue's Trust(or the Article
9 Trusts created thereunder) is directed by this Trust Agreement,

the property remaining in the Issue's Trust(or the Article 9 Trusts
created thereunda:)(collectively,the'Remaining Article 9

Page 6,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993vl

 Property') shall be distributed, jBree oftrust, to the Spouse. Ifthe
Spouse is not living at the time ofoperation ofthis Paragraph (or,
ifthe Spouse does not survive the Grantor, if this provision is
operative at the Grantor's death), then the Remaining Article 9
Property shall be distributed, free oftrust, to those persons who
would then be the heirs ofthe Grantor, their identities and

respective shares to be determined as though the death ofthe
Grantor had occurred at that time,in accordance with the laws of
the State of California then in effect relating to the succession of

separate property not acquired from a predeceased spouse or
ancestor."

4.

Article 15.A is hereby added to the Third Amended Trust as

follows:

"ARTICLE 15.A
NO CONTEST CLAUSE

15.A.1 General. The Grantor has intentionally made no

provision in this Trust Agreement for any heirs or relatives ofthe
Grantor who are not herein motioned or designated, and the

Grantor generally and specifically has intentionally omitted to
provide for every person claiming to be or who may be determined
to be an heir-at-law ofthe Grantor, except as otherwise mentioned
in this Trust Agreement. If any beneficiary(a'Contesting
Beneficiary*) under a Protected Instrument(as defined in this
Article), singularly or in combination with any other persons,
directly or indirectly, engages in any ofthe following contests
without Probable Cause(as defined in this Article):

(a)

a Direct Contest(as defined in this Article);

(b) files a Pleading(as defined in this Article)in
any court to challenge a transfer ofproperty on the grounds that it
was not the transferor's property at the time ofthe transfer, or

(c)
files a Creditor's Claim(as defined in this
Article)or prosecutes any action based upon it(other than for

funeral expenses or expenses ofthe Grantor's last illness)in the
Grantor's probate estate or against the Trustee ofany subtrust
created under this Trust Agreement or against a beneficiary
thereof;

Page 7,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

 then any share or interest in the Trust Estate and any subtrust
created under this Trust Agreement,provided to or for the benefit
of the Contesting Beneficiary, is revoked. In the event ofsuch
revocation, the revoked share or interest shall be disposed of as
follows:

(1) ifthe Contesting Beneficiary is an
individual, as though that Contesting Beneficiary had died without
issue before becoming entitled to receive any income or any
portion ofthe principal ofsuch Trust; or
(2) if the Contesting Beneficiary is a
charitable organization, to any one or more other charitable
organizations which qualify for tax exemption under Section
2055(a)ofthe Internal Revenue Code and which meet the
charitable intentions ofthe Grantor consistent with the provisions

ofthis Trust Agreement(including, without limitation, any one or
more ofthe charitable organizations named in this Trust
Agreement which are not disqualified imder this Article), as
determined by the Trustee,in the Trustee's sole discretion.

The provisions ofthis Article shall not apply to any disclaimer by
any person of any benefit under this Trust Agreement or under the
Will ofthe Grantor.

15.A.2 Definitions. Forpuiposesofthis Article,the
following terms have the following meanings:

(a)

'Creditor's Claim'includes any action to

enforce a contract to make a will, or an action asserting that the

Grantor's property is liable to the claimant, other than for funeral
expenses or the Grantor's last illness expenses.

(b) "Direct Contest' means a Pleading filed in
any court that includes an allegation that a Protected Instrument or
one or more ofits terms is invalid, based on one or more ofthe
following grounds:

Page 8,

(1)

Forgery.

(2)

Lack ofdue execution.

(3)

Lack of capacity.

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

 (4)

Menace, duress, fraud or undue

(5)

Revocation ofa will pursuant to

influence.

Section 6120 ofthe California Probate Code(or any successor

section),revocation ofa trust piu^suant to Section 15401 ofthe
California Probate Code(or any successor section)or revocation of
any instrument other than a will or trust pursuant to the procedure
for revocation that is provided by statute or by the instrument.
(6)

Disqualification of a beneficiary

under Section 6112 ofthe California Probate Code(or any

successor section) or under Section 21350 ofthe California
Probate Code(or any successor section).

(c) "Pleading* means a petition, complaint, cross
complaint, objection, answer,response or claim.
(d) "Probable Cause' exists if, at the time of
filing a contest, the facts known to the contestant would cause a
reasonable person to believe that there is a reasonable likelihood

that the requested relief will be granted after an opportunity for
further investigation or discovery.

(e)

Protected Instrument' means all ofthe

following instruments:

(1) this Trust Agreement and any and all
subtnists created under this Trust Agreement, and any amendments
to this Trust Agreement;

(2) any other revocable or irrevocable
trust established by the Grantor, and any amendments to any ofthe
foregoing Trusts;

(3)

the Will ofthe Grantor or any codicil

(4)

any designation ofbeneficiary

thereto;

executed by the Grantor with respect to any insurance policy,
annuity,individual retirement account, qualified or non-quahfied
employee benefit plan, plan ofdeferred compensation or other
assets passing outside this Trust Agreement or the Will ofthe
Grantor;

Page 9,

FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

 (5)
any written agreement between the
Grantor and the Grantor's spouse defining or altering their property
rights as married persons, whether entered into prior to,
concurrently with or after marriage;

(6)

any buy-sell agreements in which the

Grantor is a party; or
(7)
any family partnership agreements or
limited liability company operating agreements in which the
Grantor is, or was,a party.
15.A.3 Authorization ofTrustee. The Trustee is authorized

to resist and defend against any contest or other attack ofany
nature upon any provision ofthe Trust(including this no-contest

provision), any amendment to the Trust, the Grantor's Will or any
codicil thereto, and any expenses incurred by the Trustee in
coimection therewith,including but not limited to attorneys'fees,

shall be paid from the Trust Estate as an expense oftrust
administration.

15.A.4 Costs ofDefenses Charged Against Contesting

Beneficiarv. Notwithstanding the foregoing provisions ofthis
Article, ifthe Trustee is unsuccessfiil in defending any matter or
action described therein, and does not settle such matter or action,
and iffor any reason the distributions and/or allocations of
interests in the Trust Estate to the Contesting Beneficiary under
this Trust Agreement and/or the Will ofthe Grantor are not
forfeited, all ofthe costs ofsuch defense shall be charged against
the distributions and/or allocations ofinterests to the Contesting

Beneficiary under this Trust Agreement and/or the Will ofthe
Grantor, and all distributions and/or allocations ofinterests to the
Contesting Beneficiary under this Trust Agreement and/or the Will
ofthe Grantor shall be reduced on a dollar-for-dollar basis by the

aggregate net value as determined by the Trustee, ofall real and
personal property passing to or distributable to or for the benefit of
the Contesting Beneficiary as a result ofsuch matter or action,
including, without limitation, assets ofthe Trust Estate or the
probate estate ofthe Grantor,insurance proceeds, employee
benefits and deferred compensation. In making any settlement of
such matter or action,the Trustee shall consider the foregoing
provisions ofthis Article and shall abide by them to the extent
possible."

Page 10, FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993vl

 5.

Paragraph 16.3 (titled "Incontestability"),Paragraph 16.4 (titled

"Disinheritance for Assertion of Claims") and Paragraph 16.5 (titled "Costs ofDefense

Charged Against Contestant")ofthe Third Amended Trust are hereby deleted in their
entirety and nothing is substituted in their place.

6.

Except as modified by this First Amendment,the provisions ofthe

Third Amended Trust shall remain in fiill force and effect.

This First Amendment shall be effective as ofthe date of
execution.

Executed at

^ I i l0l/\

,California, on

2003^.
GRANTOR:

THOMAS EARL PETTY

The foregoing First Amendment has been accepted by the Trustee
thereunder.
TRUSTEE:

THOMAS EARL PETTY

Page 11, FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

 ACKNOWLEDGMENT

STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

QnOrl

Ig"

)
)
)

200(^ .before me,

,

a Notary Public,personally sppeared THOMAS EARL PETTY,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s)is/are subscribed to the
within instrument and acknowledged to me that he/she/they executed the same in

his/her/their autiborized capacity(ies), and that by his/her/their signature(s) on the

instrument the person(s), or the entity upon behalfof which the person(s) acted, executed
the instrument.

I certify under PENALTY OF PERJURY under the laws ofthe State of California
that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.

Signature

r

TINACAVALERI
Commission # 1684605

I

Notary Public• California
 
Los Angeles County
f
V

,v

7.2010I
My Comm.Expires Jul 29,

Page 12, FIRST AMENDMENT TO THE THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

6308993V1

 EXHIBIT 

THIRD AMENDED
THIRP
AMENDED AND RF.STATF.T)
RESTATED

THOMAS EARL
THOMAS
EARL PETTY
PETTY LIVING TRUST
TRUST

.

4198435vl
4198435vl

D

EXHIBIT
EXHIBIT D F

 THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST
TABLE OF CONTENTS
Page

ARTICLE 1

ARTICLE 2

ARTICLE 3

Article 4

419843SvI

DECLARATIONS OF TRUST:

1

1.1
1.2
1.3
1.4

1
2
2
2

Principal ofTrust
Amendment ofOriginal Trust
Separate Property to Retain Character
Acceptance ofTrust by the Trustee

RIGHTS RESERVED TO THE GRANTOR:

2

2.1
2.2
2.3

Power to Amend Trust
Power to Revoke
Powers of Amendment and Revocation Personal
to the Grantor

2
2

2.4

Trust Irrevocable Upon the Death ofthe Grantor

3

2.5

Additions

3

3

ADMINISTRATION OF TRUST ESTATE DURING
THE LIFE OF THE GRANTOR:

3

3.1

Accumulation ofIncome

3

3.2
3.3
3.4
3.5
3.6
3.7

Distribution ofPrincipal
Support ofthe Grantor and Spouse
Support ofIssue
Incapacity ofthe Grantor
Grantor Not To Be Placed in Nursing Home
Certain Transfers By Direction of Grantor During

3
3
4
4
5

the Grantor's Lifetime

6

DECLARATION CONCERNING FAMILY:

6

4.1

6

Declarations Concerning Family

 TABLE OF CONTENTS

(CONTINUED)
Page

ARTICLE 5

CREATION AND ADMINISTRATION OF

ADMINISTRATIVE TRUST;DIVISION AND
ALLOCATION OF TRUST ESTATE UPON THE

DEATH OF THE GRANTOR:

7

5.1

Creation and Administration of Administrative
Trust

5.2

Creation ofthe Artistic Property Entity and

5.3

Division ofRemaining Trust Estate Into Two

5.4

Allocation to Marital Trust; Alternate

5.5

Not Living
Conditions Relating to Allocations Under
Paragraph 5.4
:

12

5.6

Allocation to Issue's Trust

12

5.7
5.8
5.9
5.10

Incidence ofTaxes; Abatement
Selection ofAssets for Trusts
Discretion to Defer Distribution
Simultaneous Death

12
13
14
14

Allocation ofInterests Therein
Trusts

7

8
8

Distribution ofMarital Trust Assets If Spouse Is

ARTICLE 6

ADMINISTRATION OF MARITAL TRUST:

4198435vl

14

6.1

Administration of Marital Trust as Set Forth in
This Article

6.2
6.3

Income to Spouse for Life
Power ofSpouse Regarding Non-Productive

15

Property
Support ofSpouse

15
15

Distribution ofMarital Trust Upon the Death of
the Spouse

15

6.4
6.5

ARTICLE 7

9

ADMINISTRATION OF DYLAN'S TRUST:

14

16

7.1

Administration ofDylan's Trust as Set Forth in
This Article

16

7.2
7.3

Dylan's Trust for the Beneflt ofDYLAN
Distribution ofIncome

16
16

7.4
7.5
7.6

Income for Beneficiary Under Certain Age
DistributionofPrincipal
Distribution ofDylan's Trust Upon the Death of

17
17

DYLAN

18

 TABLE OF CONTENTS

(CONTINUED)
Page

ARTICLE 8

ADMINISTRATION OF NANCY'S RESIDENCE
TRUST:

8.1

Administration ofNancy's Residence Trust as Set

8.2

Forth in This Article
Distribution ofIncome

18
18

8.3
8.4
8.5

Support ofNANCY COSTICK
No Distributions ofPrincipal
Nancy's Residence for the Benefit of NANCY

18
18

COSTICK

19

8.6

Distribution of Nancy's Residence Upon the
Death ofNANCY COSTICK

ARTICLE 9

ARTICLE 10

ADMINISTRATION OF ISSUE'S TRUST:

20

Administration ofIssue's Trust as Set Forth in

This Article

20

9.2

Division ofRemaining Issue's Trust

21
21

9.3

Distribution ofIncome ofArticle 9 Trust

9.4

Income of Article 9 Trusts for Beneficiary Under
Certain Age

21

9.5
9.6

Distributions ofPrincipal from Article 9 Trusts
Distribution of Article 9 Trust Upon the Death of

21

9.7

a Beneficiary
Contingent Beneficiaries

22
23

ADMINISTRATION OF RETIREMENT PLAN
TRUSTS:

23

10.1

Administration ofRetirement Plan Trusts As Set
Forth in This Article

23

10.2

Qualified Retirement Plan

23

10.3

Distributions During Life ofBeneficiary

24

10.4

Death Taxes

24

10.5

Not Liable for Debts, Expenses or Taxes of Other
24

10.6

Withdrawals from Qualified Retirement Plan and
Trustee's Discretion to Accelerate

24

10.7

Distribution upon Beneficiaiy's Death

25

SUCCESSOR TRUSTEE:

25

11.1
11.2

25
25

Designated Successor Trustee
Trustee ofDylan's Trust
-iii-

4I9843SVI

20

9.1

Trust Assets

ARTICLE 11

18

 TABLE OF CONTENTS

(CONTINUED)
Page

11.3

Trustees of Article 9 Trusts

11.4

Special Provisions Regarding Non-Resident

25

Fiduciaries

26

11.5
11.6

Power to Designate a Successor Trustee
Right ofTrustee to Resign

27
28

11.7

Decimation of a Named Successor Trustee

28

11.8

Substitution ofCorporate Trustee

28

11.9
11.10

Effect of Succession ofTrustees
Powers and Authorities ofSuccessor Trustee

29
29

11.11

No Duty ofSuccessor Trustees to Investigate

29

11.12

Indemnification of Trustee

11.13
11.14

Special Trustee for Life Insurance Policies
Power to Designate a Successor Special Trustee

.29

ARTICLE 12 POWERS OF TRUSTEE:

32

12.1
12.2
12.3

Powers ofTrustee
Power to Act as Owner
Investment Powers

12.4

Power to Retain or Abandon Property

34

12.5

Management Powers

34

:

32
32
33

12.6

Reimbursement ofTrustee

35

12.7
12.8
12.9

Power to Employ
Installment Payments ofIncome
Segregation and Distribution ofAssets

35
35
35
36

12.10

Trust Distributions

12.11

Powers ofTrustee In the Event ofBeneficiary
Misconduct

36

12.12
12.13

38

12.14

Principal and Income
Right to Compel Income Distributions fi^om
Retirement Anangements
Acceptance ofGifts

39
40

12.15
12.16

Powers Over Securities
Transactions With Other Entities

40
41

12.17

Power to Purchase Insurance

41

12.18

Payments to or for Minors or Incapacitated

12.19

12.20

Persons

41

Life Insurance and Other Death Benefits

42

Banks and Brokerage Accounts and
Endorsements

43

12.21

Option to Terminate Shares or Trusts

44

12.22
12.23

Power to Combine and Divide Trusts
Power to Withhold Distribution

44
45

-IV-

419843Svl

30
31

 TABLE OF CONTENTS

(CONTINUED)
Page

12.24

Tax Elections

45

12.25
12.26

Powers in Event ofDisputes
Subdivision ofReal Property

46
46

12.27

Purchase at Foreclosure

47

12.28
12.29

Fiduciary Related Party Transactions
Power to Commence,Retain and Manage Closely

47

Held Business

47

12.30
12.31
12.32

Power Regarding S Corporations
Intellectual Property Rights and Powers
Power Regarding Names ofTrusts

49
49
50

12.33

Power to Transfer Trust to or from Another
Jurisdiction

50

12.34

Power to Initiate and Defend Litigation; Power to
Compromise Claims

50

12.35

Powers in Connection with Government

Agencies

51

12.36
12.37

Environmental Matters
Discretion ofTrustee

52
54

12.38

Power to Disclaim, Restrict or Enlarge Powers of

12.39
ARTICLE 13

55

Disclosure to Third Parties

55

TRUST ADMINISTRATION:
13.1

55

13.2

Trust Administrative Provisions Set Forth in This
Article
Bond ofTrustee

55
56

13.3
13.4

Compensation ofTrustee
Profits and Losses Charged to Trust

56
56

13.5

Accrued and Undistributed Income...,

56

13.6

Payments Upon the Death ofthe Grantor or
Spouse
Allocation ofPayments to Trusts
Death Taxes; Apportionment
Payment ofExpenses

56
57
58
61

13.10

Disbursements in Good Faith

61

13.11

Liability for Conduct ofCo-Trustees, Predecessor

13.7
13.8
13.9

4198435V1

Trustee

Trustees and Successor Trustees

61

13.12
13.13

Accounting
Residence for Spouse

62
62

13.14

Notification to Beneficiaries

63

13.15

Subjection ofAssets to Probate

63

 TABLE OF CONTENTS

(CONTINUED)
Page

ARTICLE 14

PROVISIONS REGARDING GST TAX:

63

14.1
14.2

63

14.3

Intention Regarding GST Tax
Duties Regarding Allocation of GST Tax
Exemption
Creation ofSeparate Trusts Based Upon

14.4

Power to Grant and Revoke General

Inclusion Ratio

ARTICLE 16

64

14.6

Testamentary Power ofAppointment
Powers and Duties Regarding Payment ofGST
Tax Liability
General Powers Regarding GST Tax and Other
Considerations

66

14.7

Successor Trustee for Certain Purposes

67

14.8
14.9

Exoneration ofTrustee
Simultaneous Death

67
67

14.5

ARTICLE 15

DEFINITIONS AND RULES OF CONSTRUCTION:

64
65

68

15.1

Definitions Set Forth in This Article

68

15.2
15.3

Beneficiary
Corporate Trustee

68
68

15.4
15.5

Education

68
69

Gender or Number

15.6

Incapacity

69

15.7

Internal Revenue Code

69

69

15.8

Issue; Child; Children

15.9

Net Income

70

15.10

Or

70

15.11
15.12

Spouse
Support, Maintenance and Health

70
70

15.13

Survival

70

15.14

Trust

70

15.15

Trustee

71

15.16

Trust Estate

71

GENERAL TRUST PROVISIONS:

71

16.1

Termination

71

16.2
16.3

Spendthrift Provision
Incontestability

71
72

16.4

Disinheritance for Assertion ofClaims

74

16.5

Costs ofDefense Charged Against Contestant

75

-VI-

419843SV1

64

 OF CONTENTS
CONTENTS
TABLE
TABLE OF
(CONTINUED)
(CONTINUED)
Page

l7
Article 17

16.6
16.7
16.7

75
Invalidity
Invalidity ................................................................................ 75
75
Governing Law ....................................................................... 75

16.8
16.8

75
Disclaimers............................................................................. 75

16.9

76
Captions ........................................................... 76
Headings and Captions

16.10
16.10
16.11

76
Cross-References .................................................................... 76
76
Notices ................................................................................... 76

EXECUTION:
EXECUTION:

77
77

17.1

77
Declaration ofthe Grantor ...................................................... 77

17.2
17.2
17.3
17.3

77
Execution by
by the Grantor ........................................................ 77
77
Execution by the Trustee ........................................................ 77

-vii-Vll-

4] 98435”
419S43SV]

 THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

THIS THIRD AMENDED AND RESTATED THOMAS EARL PETTY

LIVING TRUST(the "Trust" or "Trust Agreement") is entered into between THOMAS
EARL PETTY (hereinafter called "Grantor")and THOMAS EARL PETTY (hereinafter

called "Trustee"), effective as ofthe date ofexecution, with reference to the following
facts:

A.

On February 24, 1999,THOMAS EARL PETTY executed the

Thomas Earl Petty Living Trust(the "Original Trust") as Grantor and Trustee.
B.
On March 4,1999,the Grantor and the Trustee executed a First
Amendment to the Original Trust.

C.
On January 28,2002,the Grantor and the Trustee executed a
Second Amendment to the Original Trust.
D.

On August 20, 2003,the Grantor and Trustee executed the

Amended and Restated Thomas Earl Petty Living Trust(the "First Amended Trust"),
thereby amending and restating the Original Trust in its entirety.
E.

On January 18, 2005,the Grantor and Trustee executed the Second

Amended and Restated Thomas Earl Petty Living Trust(the "Second Amended Trust"),
thereby amending and restating the First Amended Trust in its entirety.
F.

Pursuant to Paragraph 2.1 ofthe Second Amended Trust, the

Grantor reserved the right to amend or alter the Second Amended Trust during his
lifetime.

G.

The Grantor desires to amend and restate the Second Amended

Trust in its entirety, as provided herein.
ARTICLE 1
DECLARATIONS OF TRIJ.ST:

1•1

Principal ofTrust. The Grantor declares that the Grantor has set

aside, transferred and delivered to the Trustee the sum ofFifty Dollars($50)and other
assets ofthe Grantor, subject to any liabilities secured thereby, the receipt of which is
hereby acknowledged by the Trustee. The Grantor may also transfer substantial

additional property to this Trust by lifetime or testamentary transfer. The initial principal

Page 1

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

4198435V1

 ofthe Trust, together with any other property that is transferred to the Trust and any
income thereon, shall be held, administered and distributed by the Trustee as provided
herein.

1.2

Amendment of Original Trust. The Second Amended Trust, as

previously amended, is hereby amended in its entirety by replacing the Second Amended
Trust, as previously amended, with the following provisions ofthis Trust Agreement.
The Trust shall for all purposes continue to be designated by reference to the date of
execution ofthe Second Amended Trust as follows: the "Thomas Earl Petty Living
Trust, dated February 24,1999."
1.3
Separate Propertv to Retain Character. The Grantor intends that all
"separate property ofeither the Grantor or Spouse now or hereafter contributed to the
Trust Estate shall remain the separate property ofthe Grantor. No provision ofthis Trust
Agreement shall change the character ofthat property or the rents, issues and profits
thereofto other than the separate property. Ajiy separate property withdrawn by the

Grantor, whether or not that withi-awal or distribution results from a revocation or
termination ofthis Trust, shall remain the separate property ofthe Grantor.
1.4
Acceptance ofTrust bv the Trustee. No consideration was or will
be given to or by the Trustee for the conveyance or transfer to it ofany ofthe Trust
Estate. The Trustee accepts title to the Trust Estate which is conveyed or transferred to it
hereunder, without liability or responsibility for the conditions or validity ofthat title.
The Trust Estate has been or will be conveyed or transferred to the Trustee, in trust, with
power ofsale, for the uses and purposes and upon the terms herein set forth. The Trustee
agrees to perform the duties ofthe Trustee and to hold the Trust Estate, the proceeds
thereof, and any other property which may be later added to the Trust Estate, subject to
the terms ofthis Trust Agreement.
ARTICLE 2
RIGHTS RESERVED TO THE GRANTOR:

2.1
Power to Amend Trust. At any time or times during the life ofthe
Grantor, the Grantor, by written notice filed with the Trustee, may change the interest of
any Beneficiary in any Trust created or to be created pursuant to this Trust Agreement or
any amendment to it, or amend any provision ofthis Trust Agreement or any amendment
to it.

2.2
Power to Revoke. During the life ofthe Grantor, the Grantor may
revoke this Trust by giving written notice to the Trustee. On revocation, the Trustee shall
promptly deliver to the Grantor all ofthe Trust Estate. If, after a revocation ofthe Trust
by the Grantor, the Trustee has not distributed all ofthe Trust Estate prior to the death of
the Grantor for whatever reason, the Trustee shall retain bare legal title to the Trust

Page 2

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

4198435VI

 Estate. Upon the death ofthe Grantor, the Trust Estate shall not be distributed in
accordance with this Trust Agreement, but shall instead be distributed as designated by
the Grantor in a Will or other written document executed concurrently with or after the
date ofrevocation, or in the absence ofsuch designation, shall be distributed to the
Grantor's estate.

2.3

Powers of Amendment and Revocation Personal to the Grantor.

The powers ofthe Grantor to amend this Trust Agreement and to revoke this Trust are
personal to the Grantor and shall not be exercisable on the Grantor's behalf by any
conservator or other person.
2.4
Trust Irrevocable Upon the Death ofthe Grantor. Upon the death
ofthe Grantor, the Trust created by this Trust Agreement shall become irrevocable and
not subject to amendment or alteration in any respect.

2.5
Additions. The Grantor shall have the right, at any time or times,
to add to the Trust Estate, and the property so added to the Trust Estate, whether real,
personal or mixed, shall, after notice to the Trustee, be subject to all the terms ofthis
Trust Agreement. Any other person may,from time to time, with the consent ofthe
Trustee, add property ofany kind to the Trust Estate, or any part thereof, which shall be
subject to all the terms and provisions ofthis Trust Agreement.
ARTICLE 3
ADMINISTRATION OF TRUST ESTATE
DURING THE LIFE OF THE GRANTOR:

3.1

Accumulation ofIncome. So long as the Grantor is living, the

Trustee shall accumulate all ofthe net income ofthe Trust Estate. Such accumulated

income shall become principal ofthe Trust Estate, to be distributed as hereinafter set
forth.

3.2
Distribution ofPrincipal. Upon the request ofthe Grantor, the
Trustee shall distribute and deliver so much ofthe principal ofthe Trust Estate as is
demanded by the Grantor. This power ofthe Grantor may be exercised by a power of
attorney executed by the Grantor, ifspecific reference is made to this provision ofthis
Trust Agreement, and only to the extent thereto and, in such event, such principal shall be
distributed to the holder ofsuch power ofattorney.
3.3

Support ofthe Grantor and Spouse. In addition to the distributions

from the Trust Estate set forth in the preceding Paragraphs ofthis Article, it shall be the
discretionary duty ofthe Trustee to distribute to or apply for the use and benefit ofeither
or both the Grantor and Spouse, from time to time, such reasonable amounts from the
principal ofthe Trust Estate as the Trustee may deem necessary or advisable for the

Page 3

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

419843Svl

 proper and reasonable support, maintenance and health of either or both the Grantor and

Spouse, in accordance with their then accustomed manner of living.
3.4

Support ofIssue. During the lifetime ofthe Grantor, the Trustee

may distribute to or apply for the benefit of the issue ofthe Grantor such sums out ofthe

principal ofthe Trust Estate as the Trustee deems necessaiy for the proper support,
maintenance, health and education ofany one or more ofthem. In maldng any
distributions of principal to or for any issue ofthe Grantor under this Paragraph, the
Trustee shall take into consideration, to the extent the Trustee deems advisable, any
income or other resources ofsuch issue, outside ofthe Trust Estate, known to the Trustee

and reasonably available for those purposes. In exercising this discretionary power,the
Trustee is advised to be mindful that the Grantor's primary concern in establishing this
Trust is the adequate support ofthe Grantor during the Grantor's lifetime. Any
distribution or application of benefits to or for any issue ofthe Grantor under this
Paragraph shall be charged against the Trust Estate as a whole rather than against the
ultimate distributive share ofthe issue (or such issue's lineal ancestors or lineal
descendants)to whom or for whose benefit the distribution is made.

3.5
Incapacity ofthe Grantor. Ifat any time, as evidenced in writing
by two(2)licensed physicians upon the request ofany beneficiaiy or any successor
Trustee, the Grantor has become substantially unable to manage the Grantor's own
financial resources or resist fraud or undue influence (hereafter to be referred to as the
Grantor's "Incapacity"), whether or not a court ofcompetentjurisdiction has declared the
Grantor incapacitated, mentally ill or in need ofa conservator or the guardian ofthe
person or estate, this Paragraph 3.5 shall apply.
(a)

Limitation on Persons Able to Request a Determination of

Incapacity. Notwithstanding any provision in this Paragraph 3.5 to the contrary, only a
beneficiary or a named successor Trustee hereunder may request a determination of
Incapacity pursuant to the provisions ofthis Paragraph 3.5. Specifically, no creditor of
the Grantor, nor any person who may have a claim against the Trust Estate, nor any
person who may otherwise qualify as an interested person as provided under California
Probate Code Section 48 shall have the right to request a determination ofIncapacity of
the Grantor pursuant to the provisions ofthis Paragraph 3.5.
(b)

Cooperation ofthe Grantor and Health Care Agent. The

Grantor hereby directs any holder ofan Advance Health Care Directive, including a
durable power ofattorney for health care decisions, reasonably to cooperate with the
successor Trustee (in the case ofthe determination ofthe Incapacity ofthe Grantor)or
the then-serving Trustee(in the case ofa determination that the Grantor has regained the
Grantor's capacity, as evidenced in writing by two(2)licensed physicians [hereafter to be
referred to as the Grantor's "Capacity"]). The Grantor agrees reasonably to cooperate
with the successor Trustee(in the case ofa determination ofthe Incapacity ofthe

Page 4

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

419g43Svl

 Grantor)to undergo an evaluation by one(1)or more physicians and/or independent
experts to determine Incapacity or Capacity, at reasonable times and reasonable intervals,
as appropriate. The Grantor and the successor Trustee shall reasonably cooperate in the
selection ofthe physician(s) and/or independent expert(s).
(c)

Release in Connection with Determination ofthe Grantor's

Incanacitv and/or Caoacitv. For purposes ofdetermining the Grantor's Incapacity(or for
determining the Grantor's Capacity after the Grantor has been determined to be

Incapacitated), all individually identifiable health information, including medical records,
may be released to the beneficiary and/or successor Trustee(even ifthat person has not
yet been appointed to serve as Trustee) who requested such determination ofthe
Grantor's Incapacity (or, in the case ofdetermining the Grantor's Capacity after the
Grantor has been determined to be Incapacitated, such information may be released to the
then-serving Trustee hereunder), to include any written opinion relating to the Grantor's
Incapacity or Capacity, as appropriate. This release authority applies to any information
governed by the Health Insurance Portability and Accountability Act of 1996,42 USC
1320d and 45 CFR 160-164.

(d)
Support ofthe Grantor During Period ofIncapacitv ofthe
Grantor. At any time that the Grantor has been determined to be Incapacitated, the
Trustee shall, from time to time, apply for the benefit ofthe Grantor, from the Trust
Estate, the amounts of net income and principal necessary, in the discretion ofthe
Trustee, for the proper and reasonable support, maintenance and health ofthe Grantor in
accordance with the Grantor's then accustomed manner ofliving, until the Grantor has
regained Capacity, or until the death ofthe Grantor. Any income in excess ofthe
amounts applied for the benefit ofthe Grantor shall be accumulated and added to the

principal ofthe Trust Estate. Ifa conservator ofthe estate is appointed for the Grantor,
the Trustee shall take into account any distributions made for the Grantor's benefit by Ae
conservator.

(e)
Continued Support ofPersons Previously Supported bv the
Grantor. Ifthe Grantor is determined to be Incapacitated, the Trustee may also pay from
the Trust Estate to any person(A)whom the Grantor is legally obligated to support or(B)
who is related to the Grantor by blood, marriage or adoption and whom the Grantor was
supporting at the time that the Grantor became Incapacitated, such sums as shall be
reasonably necessary for such person's education, support in such person's accustomed
manner ofliving and such person's medical, dental, hospital and nursing expenses and
expenses of invalidism.

3.6
Grantor Not To Be Placed in Nursing Home. Except as provided
below, it is the Grantor's intention that the Grantor not be placed in a nursing home,
convalescent home or other similar facility without the Grantor's informed consent. Ifat
any time the Grantor is incapable ofgiving his informed consent, then, to the extent

Page 5

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

 possible, the Trustee shall use Trust income and, if insufficient. Trust principal for the
purpose of providing nursing care for the Grantor in the Grantor's own home. To the
extent such payments are fi-om Trust principal, they shall be paid in the manner described
in Paragraph 3.5 above. In the event that there are special circumstances in which the
Trustee decides that a nursing home,convalescent home or other similar facility would
provide substantially better medical care for the Grantor than the Grantor would receive
in the Grantor's own home, and only ifthese special and unusual circumstances exist, the
Trustee may choose to use Trust funds to provide for the Grantor's care in a nursing
home, convalescent home or other similar facility ofthe highest quality. In making these
decisions, the Trustee shall consult, to the extent the Trustee deems necessary, with the
Grantor's health care agent and/or conservator.
3.7

Certain Transfers Bv Direction of Grantor During the Grantor's

Lifetime. The Grantor intends that certain transfers pursuant to the Grantor's written
instruction should be treated as a withdrawal of property from the Trust followed by a
transfer by the Grantor to the Grantor or other parties, in accordance with such written
instruction. For example, in the case ofa transfer that is intended to be a gift from the
Grantor to any person, the Trustee shall execute any and all documents required to vest
title to the gift property in the name of the transferee, without first retitling such assets in
the name ofthe Grantor. The intent ofthe Grantor is to avoid the expense and delay of
multiple retitling, without changing the character ofthe transfer as being, in substance, a
withdrawal ofproperty from the Trust, followed by a transfer by the Grantor.
Accordingly, such transfer is intended to be and shall be treated for all purposes as first a
distribution ofthe property to the Grantor followed by a gift transfer ofthe property to
the donee(s) by the Grantor as donor, acting individually or through one or more
attorneys in fact.
ARTICLE 4
DECLARATION CONCER24ING FAMILY:

4.1
Declarations Concerning Familv. The Grantor is presently married
to DANA PETTY,and any reference in this Trust to Spouse is to her. ITie Grantor was
previously married to JANE B.PETTY,which marriage was terminated by divorce. The
Grantor has intentionally omitted to provide for JANE B.PETTY under the terms ofthis
Trust Agreement. The Grantor has two(2)children from the Grantor's marriage to
JANE B.PETTY, namely ADRU ROBIN PETTY("ADRIA"), bom November 28,
1974; and ANNA KIM PETTY("KIM"), bom January 17,1982. DANA PETTY has
one(1)child fix)m a prior marriage, namely DYLAN EPPERSON("DYLAN"),bom
October 23,1992. TTie Grantor has made specific allocations to or for the benefit of
DYLAN under this Tmst Agreement; however,the Grantor does not intend to include
DYLAN in the class of beneficiaries identified as a "child ofthe Grantor," "children of
the Grantor" or "issue ofthe Grantor"; accordingly, any reference in this Tmst Agreement

Page 6

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

419S43Svl

 to "child ofthe Grantor" or "children ofthe Grantor" shall refer only to ADRIA and/or
KIM. Further, any reference in this Trust Agreement to "issue ofthe Grantor" shall

include only ADFtlA,KIM and their respective issue. The Grantor is a permanent
resident ofthe county ofLos Angeles, state of California.
ARTICLE 5

CREATION AND ADMINISTRATION OF

ADMINISTRATIVE TRUST; DIVISION
AND ALLOCATION OF TRUST ESTATE
UPON THE DEATH OF THE GRANTOR:

5.1
Creation and Administration of Administrative Trust. Upon the
death ofthe Grantor, the Trust Estate, including any additions thereto by reason ofthe
death ofthe Grantor, may thereafter be held as an "Administrative Trust." The Trustee

may(a) make all ofthe payments required by the Paragraph titled "Payments Upon the
Death ofthe Grantor or Spouse,"(b)pay all expenses relating to the Administrative
Trust, and (c)distribute the balance ofAe Administrative Trust(the "Balance")as
provided in the remaining provisions ofthis Article. The Trustee may distribute the
Balance in a single distribution or in a series ofpartial distributions. Ifdistribution ofthe
Balance is to be made to one or more Beneficiaries, then until full distribution has been
made to any such Beneficiary, the Trustee ofthe Administrative Trust may pay to that
Beneficiary(or to a Trust to be established for such Beneficiary pursuant to the terms
hereof)such amounts ofincome and/or principal as are consistent with the terms hereof.
Such payments shall be in lieu ofand thus credited toward the income and/or principal
remaining to be distributed to such Beneficiary(or to the Trust to be established for such
Beneficiary pursuant to the terms hereof). No payment shall be made to any Beneficiary
(or to the Trust to be established for such Beneficiary pursuant to the terms hereof) which
exceeds the amount ofincome and/or principal then remaining to be distributed to such
Beneficiary(or Trust) as provided herein, nor shall any payment ofincome and/or
principal be made to any Beneficiary ofany such Trust which exceeds the amount which
might properly be distributed to such Beneficiary at that time under the terms ofsuch
Trust. No payment shall be made to the Spouse and credited toward any amount which
would otherwise be distributed to the Marital Trust, to the extent possible, ifsuch
payment involves assets which are described in Paragraph 5.8. Nothing in this Paragraph
shall be deemed to affect the federal estate tax marital deduction. The Grantor intends

that, to the extent determined by the executor under the Will ofthe Grantor, in its sole
discretion, or by such other person who can make the election in the absence ofan
executor, the Marital Trust will qualify for the federal estate tax marital deduction under
Section 2056 ofthe Internal Revenue Code. In no event shall the Trustee take any action
or have any power under this Paragraph that will impair the federal estate tax marital
deduction, and any such power shall be void. All provisions regarding the Marital Trust
shall be interpreted to conform to the primary objective that the federal estate tax marital

Page 7

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

4l9843Svl

 deduction shall be allowable. The Administrative Trust shall be deemed to be terminated

when all ofthe assets ofthe Administrative Trust have been used to pay expenses or
allocated or distributed as provided in this Article 5, except for a reasonable amount
which is set aside for the payment ofunascertained or contingent liabilities and expenses
(excluding any claim by a Beneficiary in his or her capacity as such).
5.2

Creation ofthe Artistic Pronertv Entitv and Allocation of Interests

Therein. The Trustee shall first set aside all ofthe Artistic Property (as that term is
defined in Paragraph 15.2) held by the Trust Estate(or to be received by the Trust Estate
as a result ofthe death ofthe Grantor). The Trustee is hereby directed to create a
California limited liability company(or such other entity as the Trustee deems
appropriate)(the "Artistic Property Entity")to hold the Artistic Property. The
membership interests in the Artistic Property Entity shall be held as follows:
(a)

Ifthe Spouse is living at the time ofoperation ofthis

Paragraph,then the Trustee shall allocate an undivided one-third (1/3) membership
interest(or other beneficial interest) in the Artistic Property Entity to the Marital Trust to

be created pursuant to Paragraph 5.3. Ifthe Spouse is not living at the time ofoperation
ofthis Paragraph, then the allocation ofsuch undivided one-third (1/3) interest in the
Artistic Property Entity pursuant to this Paragraph 5.2(a)shall lapse and such undivided
one-third (1/3)interest in the Artistic Property Entity shall be added to the allocation
pursuant to Paragraph 5.2(b).

(b) The Trustee shall allocate an undivided two-thirds (2/3)
membership interest(or other beneficial interest) in the Artistic Property Entity to the
Issue's Trust to be created pursuant to Paragraph 5.3.

With respect to the creation ofthe Artistic Property Entity, the Trustee is directed to
create the governing documents ofthe Artistic Property Entity such that those ofthe
Spouse, ADRIA and KIM who are living at the time ofcreation ofthe Artistic Property
Entity shall be entitled to participate equally in the management ofthe Artistic Property
Entity, even though their respective economic interests in the Artistic Property Entity are
not equal.
5.3

Division ofRemaining Trust Estate Into Two Trusts. As soon as

reasonably practicable after the death ofthe Grantor, and after allowance,for the

allocation contemplated by Paragraph 5.2 and the payments required by the Paragraph
titled "Payments Upon the Death ofthe Grantor or Spouse",the Trustee shall divide the
remaining Trust Estate, including, without any limitation, any property received fi-om the
probate estate ofthe Grantor, proceeds received from life insurance policies on the life of
the Grantor,or otherwise, into two(2)shares, each of which shall be a separate Trust,
hereinafter referred to respectively as the "Marital Trust" and the "Issue's Trust", as
hereinafter described in this Article. The Trustee shall have the discretion to make any

Page 8

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

4l98435vl

 allocations, divisions and distributions required under this Article on a pro rata or non-pro
rata basis, and shall take into account any written agreement between the Grantor and the
Spouse providing for a non-pro rata division oftheir property and the effect ofsuch
agreement on community property passing outside of the Trust Estate. The assets

allocated in kind shall be allocated on the basis of their net fair market values as finally
determined for federal estate tax purposes; provided that the assets selected shall be fairly
representative of any appreciation or depreciation that has occurred between the
applicable valuation date and the date ofallocation. The amount allocated, divided or
distributed shall be equal in value to the amount required to be allocated, divided or

distributed, regardless ofthe character of property for state law purposes as community
property, separate property, quasi-community property or otherwise(although no such
community property or quasi-community property is believed to exist).
5.4

Allocation to Marital Trust: Alternate Distribution of Marital Trust

Assets IfSpouse Is Not Living. Subject to the provisions ofParagraph 5.5, the Trustee
shall allocate certain ofthe assets ofthe Trust Estate as follows:

(a)
Ifthe Spouse is Living. Ifthe Spouse is living at the time
ofallocation pursuant to this Paragraph 5.4, the Marital Trust shall consist ofthe
following property and shall be held, administered and distributed in accordance with the
provisions of Article 6:
(1)

Malibu Residence. The Trustee shall allocate to the

Marital Trust any interest held by the Trust Estate(or to be acquired by the Trust Estate
as a result ofthe death ofthe Grantor) in that certain real property located at 27403
Pacific Coast Highway, Malibu, California, including any insurance thereon and any
furniture, furnishings and appliances located therein, but subject to any encumbrances
secured thereby (collectively, the "Malibu Residence"). Ifthe Trust Estate does not own
an interest in the Malibu Residence at the time of operation ofthis Paragraph (and will
not acquire such an interest in the Malibu Residence as a result ofthe death ofthe

Grantor), then the allocation contemplated by this Paragraph 5.4(a)(1) shall be ofno force
or effect.

(2)

Beach House Property. The Trustee shall allocate

to the Marital Trust any interest held by the Trust Estate(or to be acquired by the Trust
Estate as a result ofthe death ofthe Grantor) in that certain real property located at 21244
Pacific Coast Highway, Malibu, California, including any insurance thereon, but subject
to any encumbrances secured thereby (collectively, the "Beach House Property"). Ifthe
Trust Estate does not own an interest in the Beach House Property at the time of
operation ofthis Paragraph (and will not acquire such an interest in the Beach House

Property as a result ofthe death ofthe Grantor), then the allocation contemplated by this
Paragraph 5.4(a)(2) shall be ofno force or effect.

Page 9

THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

4198435V1

 (3)
Zumeriz Condo. The Trustee shall allocate to the
Marital Trust any interest held by the Trust Estate(or to be acquired by the Trust Estate
as a result of the death ofthe Grantor) in that certain real property located at 6435
Zumeriz Drive, #5, Malibu, Califomia, including any insurance thereon, but subject to
any encumbrances secured thereby or any residential real property which was purchased
as a substitute residence and which is owned by the Trust Estate(or will be acquired by
the Trust Estate as a result of the death ofthe Grantor)(the "Zumeriz Condo"). Ifthe
Trust Estate does not own an interest in the Zumeriz Condo at the time ofoperation of
this Paragraph (and will not acquire such an interest in the Zumeriz Condo as a result of
the death ofthe Grantor), then the allocation contemplated by this Paragraph 5.4(a)(3)
shall be of no force or effect.

(4) Palisades Residence. The Trustee shall allocate to
the Marital Trust any interest held by the Trust Estate(or to be acquired by the Trust
Estate as a result ofthe death ofthe Grantor) in that certain real property located at 766
Almar Avenue, Pacific Palisades, California, including any insurance thereon, but subject
to any encumbrances secured thereby or any residential real property which was
purchased as a substitute residence and which is owned by the Trust Estate(or will be
acquired by the Trust Estate as a result ofthe death ofthe Grantor)(the "Palisades
Residence"). Ifthe Trust Estate does not own an interest in the Palisades Residence at
the time ofoperation ofthis Paragraph (and will not acquire such an interest in the
Palisades Residence as a result ofthe death ofthe Grantor), then the allocation
contemplated by this Paragraph 5.4(a)(4) shall be ofno force or effect.
(5)
One-Third Beneficial Interest in the Artistic
Property Entitv. As stated in Paragraph 5.2, the Marital Trust shall hold an undivided
one-third (1/3) beneficial interest in the Artistic Property Trust
(6)
10% Interest in Balance ofthe Remaining Gross
Trust Estate. The Trustee shall next allocate to the Marital Trust property equal in value
to ten percent(10%)ofthe Remaining Gross Trust Estate(as hereafter defined). For
purposes ofthis Trust Agreement,the term "Remaining Gross Trust Estate" shall mean
all the property held by the Trust Estate at the date ofdeath ofthe Grantor(or to be
acquired by the Trust Estate as a result ofthe death ofthe Grantor), but specifically
excluding the following:
(A)

The Artistic Property;

(B) The property which is the subject ofthe
allocations contemplated by Paragraph 5.4(a)(1), Paragraph 5.4(a)(2),Paragraph 5.4(a)(3)
and Paragraph 5.4(a)(4);
(C)

Any proceeds from life insurance policies on

the life ofthe Grantor; and

Page 10 THIRD AMENDED AND RESTATED
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 (D)

Any proceeds from Qualified Retirement

Plans (as defined in Paragraph 10.2), and further without deduction for
1)

Death Taxes(as defined in

Paragraph 13.8(a));

2)
Other obligations payable by the
Trust Estate at the date ofdeath ofthe Grantor; and

3)

Any administrative expenses ofthe

Trust or otherwise relating to the Grantor.

The value of any property included in the

Remaining Gross Trust Estate shall be equal to the value ofsuch property as determined
on the federal estate tax retum ofthe Grantor. Ifany ofsuch property is not valued on
the federal estate tax retum ofthe Grantor,then the value ofsuch property shall be its net
fair market value, as determined by the Trustee, using any reasonable method determined
by the Trustee, in the Trustee's sole and absolute discretion. The Tmstee's determination

ofwhich assets are to be considered part ofthe Remaining Gross Estate shall be binding
upon all beneficiaries.

(b)
Alternate Allocation Ifthe Spouse Is Not Living. Ifthe
Spouse is not living at the time ofallocation pursuant to this Paragraph 5.4(b), the
Trustee shall instead make the following allocations:
(1)

 
;

Specific Allocation to Dvlan's Trust. IfDYLAN is

living at the time of operation ofthis Paragraph 5.4(b)(1), then the Trustee shall allocate
the following assets to a separate Trust("Dylan's Trust")to be held, administered and
distributed in accordance with the provisions of Article 7:
(A) Cash or other property(but specifically not
including any interest in the Palisades Residence or the Zumeriz Condo)equal in value to
One Million Five Hundred Thousand Dollars($1,500,000);

(B) The Palisades Residence; and.

{
f

(C) The Zumeriz Condo.

[

I^ however, neither the Spouse nor DYLAN is

living at the time ofoperation ofthis Paragraph 5.4(b)(1), Dylan's Trust shall not be
created, and the allocation contemplated by this Paragraph 5.4(b)(1) shall lapse and be of
no force or effect, and the property which would otherwise have been allocated pursuant
to this Paragraph 5.4(b)(1) shall remain as part ofthe Trust Estate, to be distributed as
hereinafter provided.

Page 11 THIRD AMENDED AND RESTATED
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i

 (2)

Contingent Allocation ofPalisades Residence. If

DYLAN is not living at the time ofallocation pursuant to Paragraph 5.4(b)(1), but
NANCY COSTICK is then living, the Palisades Residence shall be allocated to a
separate Trust("Nancy's Residence Trust"), to be held, administered and distributed in

accordance with the provisions of Article 8. The Grantor has intentionally omitted to
allocate any cash or other liquid assets to Nancy's Residence Trust to cover the expenses
ofthe Palisades Residence. IfNANCY COSTICK is not living at the time ofoperation
ofthis Paragraph 5.4(b)(2)the allocation contemplated by this Paragraph 5.4(b)(2)shall
lapse and be ofno force or effect, and the property which would otherwise have been

allocated pursuant to this Paragraph 5.4(b)(2) shall remain as part ofthe Trust Estate, to
be distributed as hereinafter provided.
Ifthe Trust Estate does not own an interest in one or more

ofthe properties specifically identified in this Paragraph 5.4(b) at the time ofoperation of
this Paragraph 5.4(b)(and will not acquire an interest in such property as a result ofthe
death ofthe Grantor), thereby making that item unavailable for allocation, then the
allocation ofthe unavailable property contemplated by this Paragraph 5.4(b)shall be of
no force or effect and nothing shall be substituted in its place.

Other than as specifically provided in Paragraph 5.4(b), ifthe Spouse is not living at the
time ofallocation pursuant to this Paragraph 5.4, then the Marital Trust shall not be
created and all ofthe assets that would have been allocated to the Marital Trust under the

provisions ofParagraph 5.4(a) shall remain as part ofthe Trust Estate, be allocated to the
Issue's Trust in accordance with Paragraph 5.6.
5.5

Conditions Relating to Allocations Under Paragraph 5.4.

Notwithstanding the provisions ofParagraph 5.4 and in accordance with the provisions of

Paragraph 16.3, ifthe Spouse elects in lieu ofthe specific allocations provid^ under
Paragraph 5.4 to pursue any rights she may have to property held as part ofthe Trust
Estate, which may be characterized as community property(although the Grantor
believes that all property held under the Trust Estate is his separate property), then the
allocations contemplated by Paragraph 5.4(including any allocations to DYLAN or
NANCY COSTICK)shall be ofno force or effect and such property shall instead be
allocated to the Issue's Trust, to be held as a part thereofand subject to its terms.
5.6
Allocation to Issue's Trust. After the allocations pursuant to the
provisions ofParagraph 5.2 and Paragraph 5.4, the remaining Trust Estate shall be
allocated to the Issue's Trust, to be held, administered and distributed in accordance with
the provisions of Article 9
5.7

Incidence ofTaxes: Abatement.

(a)
Incidence ofTaxes. Without limiting any ofthe provisions
ofParagraph 13.8 and Article 14, it is the intent ofthe Grantor that all Death Taxes(as

Page 12 THIRD AMENDED AND RESTATED
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 defined in Paragraph 13.8) and all generation-skipping transfer("GST")taxes, to the
extent possible, shall be paid out ofthe remaining Trust Estate and that the specific
allocations made in Paragraph 5.2 and Paragraph 5.4 shall be made free ofany Death
Taxes and GST taxes.

(b)
Abatement. The Grantor acknowledges that the Trust
Estate may not be sufficient to fully fiind all ofthe allocations contemplated by
Paragraph 5.2 and Paragraph 5.4. Accordingly, it is the intent ofthe Grantor that the
allocations made in Paragraph 5.2 and Paragraph 5.4 shall be made in the following order
of preference, so that ifthe Trust Estate is inadequate to make all ofsuch allocations free
ofDeath Taxes and GST taxes, the following allocations(in the order of priority listed)
shall be reduced or eliminated first:

(1)

The Remaining Gross Trust Estate shall be reduced

or eliminated first;

(2)
After the Remaining Gross Trust Estate has been
eliminated, then the Trustee shall next reduce or eliminate any specific allocations under
the provisions ofParagraph 5.4, specifically excluding any allocation of an interest in the
Artistic Property Entity; and

(3)
Only after all other property ofthe Trust Estate has
been eliminated, the Trustee may reduce or eliminate any specific allocation ofthe
Artistic Property Entity.
5.8
Selection ofAssets for Trusts. Except as otherwise provided in
this Article, the Trustee shall have full power and sole discretion to satisfy the allocation
to the Trusts created under this Article wholly or partly in cash or in kind and to select the
assets which shall constitute that allocation. The assets allocated in kind shall be deemed

to satisfy the allocations set forth in this Trust Agreement on the basis oftheir net fair
market values as finally determined for federal estate tax purposes. The Trustee shall
select property to satisfy these amounts so that any appreciation or depreciation that has
occurred in the value ofTrust property between the applicable valuation date and the date
ofallocation shall be fairly representative between the Marital Trust and the Issue's Trust.
The Trustee shall satisfy the amount allocated to the Marital Trust with assets eligible for
the federal estate tax marital deduction. To the extent that other assets which qualify for
the federal estate tax marital deduction are available, there shall not be allocated to the
Marital Trust any one or more ofthe following:
(a)
Any assets with respect to which any estate or death taxes
are paid to any foreign country or any ofits possessions or subdivisions.
(b)

Any assets which are located outside the borders ofthe

United States.

Page 13 THIRD AMENDED AND RESTATED
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 (c)

Unmatured life insurance policies.

Notwithstanding anything in this Article to the contrary, to the extent possible, assets
which constitute income in respect of a decedent shall be first allocated to the Marital
Trust. All unclaimed administration expenses attributable in whole or in part to the
Marital Trust shall be paid from the Issue's Trust(regardless ofany other clause in this
Trust Agreement or applicable law allocating administration expenses). The term
"unclaimed administrative expenses" shall mean administration expenses, described in
Sections 2053(a)(2) and 2053(b)ofthe Internal Revenue Code, that are eligible for
deduction on the Grantor's federal estate tax return but that are not allowed on that return

because they are claimed as deductions on the income tax return ofthe Grantor's estate.
5.9

Discretion to Defer Distribution. When the Trustee is directed to

make a distribution ofTrust assets or a division ofTrust assets to separate Trusts or
shares on the death ofthe Grantor,the Trustee may, in the sole and absolute discretion of
the Trustee, defer that distribution or division until six(6) months after the Grantor's
death. Notwithstanding the preceding sentence, the interest ofthe Spouse in the Marital
Trust shall vest immediately on the death ofthe Grantor. When the Trustee defers
distribution or division ofthe Trust assets, the deferred distribution or division shall be
made as if it had taken place at the time set forth in this Trust Agreement for that
distribution or division in the absence ofthis Paragraph, and all rights given to the
Beneficiaries ofthose Trust assets under other provisions ofthis Trust Agreement shall
be deemed to have accrued and vested as ofthat prescribed time.

5.10 Simultaneous Death. In the event the Grantor and the Spouse die
simultaneously or under circumstances that make it difficult or impossible to determine
which ofthem survived the other, then, for purposes ofthe division ofthe Trust Estate
under this Article, the Trustee shall presume that the one ofthe Grantor and the Spouse
who has the larger "Gross Estate" as defined in Section 2031 ofthe Internal Revenue
Code,reduced by the deductions allowed by Sections 2053 and 2054 ofthe Intemal
Revenue Code, predeceased the other.
ARTICLE 6
ADMINISTRATION OF MARITAL TRUST:

6.1

Administration of Marital Trust as Set Forth in This Article. From

and after the death ofthe Grantor, the income and principal ofthe Marital Trust shall be
held, administered and distributed during the lifetime ofthe Spouse as hereinafter set
forth. During the lifetime ofthe Spouse, the Trustee shall not make any distributions of
principal or income ofthe Marital Trust to any person other than the Spouse. The
Grantor intends that, to the extent determined by the executor under the Will ofthe
Grantor, in its sole discretion, or by such other person who can make the election in the

Page 14 THIRD AMENDED AND RESTATED
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4198435V1

 absence of an executor, the Marital Trust will qualify for the federal estate tax marital
deduction under Section 2056 of the Internal Revenue Code. In no event shall the

Trustee take any action or have any power that will impair the federal estate tax marital
deduction, and any such power shall be void. All provisions regarding the Marital Trust
shall be interpreted to conform to the primary objective that the marital deduction shall be
allowable.

6.2 Income to Spouse for Life. Commencing immediately on the date
ofdeath ofthe Grantor, all net income ofthe Marital Trust shall be distributed by the
Trustee in monthly or other convenient installments, but not less frequently than quarterannually, to the Spouse as long as she lives.
6.3

Power ofSpouse Regarding Non-Productive Propertv. During the

life ofthe Spouse,the Spouse shall have the power to require the Trustee to make all or
part ofthe principal ofthe Marital Trust productive or convert promptly any
unproductive part into productive property. This power shall be exercised by the Spouse
in a written instrument delivered to the Trustee.

6.4
Support ofSpouse. Notwithstanding anything to the contrary
contained in this Article, it shall be the discretionary duty ofthe Trustee, from time to
time, to distribute to or apply for the use and benefit ofthe Spouse for the proper and
reasonable support, maintenance and health ofthe Spouse, all or any part ofthe principal
ofthe Marital Trust. Subject to the foregoing, distributions to the Spouse under this
Paragraph shall be on the basis of maintaining the standard of living to which the Spouse
was accustomed at the time ofthe death ofthe Grantor. In making any distributions of

principal to or for the Spouse under this Paragraph,the Trustee shall take into
consideration, to the extent the Trustee deems advisable, any income or other resources
ofthe Spouse, outside ofthe Marital Trust, known to the Trustee and reasonably
available for those purposes.
6.5
Distribution of Marital Trust Upon the Death ofthe Snouse. Upon
the death ofthe Spouse,the Trustee shall distribute any accrued but undistributed income
ofthe Marital Trust to such one or more persons and entities, including the estate ofthe
Spouse, on such terms and conditions, either outright or in trust, as the Spouse shall
appoint by a Will or other written instrument, specifically referring to and exercising this

power ofappointment. In the event that the Spouse does not exercise the foregoing
power ofappointment, such income shall be added to the principal ofthe Marital Trust.
The then balance ofthe principal ofthe Marital Trust shall be allocated and distributed as
follows:

(a)
IfDYLAN Is Living. IfDYLAN survives his mother and
is living at the time ofallocation hereunder, then the Trustee shall allocate the following
assets to Dylan's Trust:

Page 15 THIRD AMENDED AND RESTATED
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 (1) Cash or other property(but specifically not
including any interest in the Artistic Property Entity or the Malibu Residence) equal in
value to One Million Five Hundred Thousand Dollars($1,500,000).
(2)

The Palisades Residence; and

(3)

The Zumeriz Condo.

If, however, DYLAN is not living at the time ofallocation hereunder, Dylan's Trust shall
not be created, and the allocation contemplated by this Paragraph 6.5(a)shall lapse and be
ofno force or effect, and the property which would otherwise have been allocated
pursuant to this Paragraph 6.5(a)shall remain as part ofthe Trust Estate, to be distributed
as hereinafter provided.
(b)
IfDYLAN Is Not Living. But NANCY COSTICK Is Then
Living. IfDYLAN is not living at the time ofallocation hereunder, but NANCY
COSTICK is then living, the Palisades Residence shall be allocated to Nancy's Trust.
Ifthe Trust Estate does not own an interest in one or more ofthe

properties specifically identified in Paragraph 6.5(a)or Paragraph 6.5(b)at the time of
allocation pursuant to this Paragraph 6.5,thereby making that item unavailable for
allocation, then the allocation ofthe unavailable property contemplated by
Paragraph 6.5(a) or Paragraph 6.5(b)(as the case may be)shall be ofno force or effect
and nothing shall be substituted in its place.
(c)

Remaining Marital Trust Assets. The balance ofthe

principal ofthe Marital Trust remaining after the allocations pursuant to Paragraph 6.5(a)
or Paragraph 6.5(b)(ifany)shall be added to the Issue's Trust, to be held as a part thereof
and subject to all ofits terms.
ARTICLE 7
ADMINISTRATION OF DYLAN'S TRUST:

7.1

Administration ofDylan's Trust as Set Forth in This Article. The

Trustee shall retain, divide, administer or distribute Dylan's Trust as set forth in this
Article.

7.2
Dylan's Trust for the Benefit ofDYLAN. Dylan's Trust shall be
held as a single Trust for the benefit ofDYLAN.

7.3
Distribution ofIncome. Subject to the remaining provisions ofthis
Article, the net income ofDylan's Trust shall be distributed to or applied for the use and

Page 16 THIRD AMENDED AND RESTATED
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 benefit ofDYLAN in monthly or other convenient installments, but not less frequently
than quarter-annually.

7.4
Income for Beneficiary Under Certain Age. Notwithstanding
anything to the contrary herein, ifDYLAN shall become entitled to income from Dylan's
Trust before he has reached the age oftwenty-two (22) years, then the Trustee shall
continue to hold the income from Dylan's Trust in trust, with like powers as to
management and investment thereof as herein set out and shall use and apply that
income, as the Trustee may deem necessary, directly for the proper and reasonable
support, maintenance, health and education ofDYLAN. Any unexpended part ofthe net
income ofDylan's Trust shall be added to the principal until DYLAN reaches the age of
twenty-two(22) years, from and after which time DYLAN shall be entitled to the net
income from Dylan's Trust as hereinbefore set forth. Income not expended for DYLAN
shall become principal ofDylan's Trust and shall be distributed as hereinafter set forth in
this Article.

7.5
Distribution ofPrincipal. Until complete distribution pursuant to
the provisions of this Paragraph, the Trustee may distribute to or apply for the benefit of
DYLAN,out ofthe principal ofDylan's Trust, those sums as the Trustee, in the Trustee's
discretion, considers necessary for DYLAN'S proper support, maintenance, health and
education, after taking into consideration, to the extent the Trustee considers advisable,
any income or other resources ofDYLAN,outside ofany Trust created pursuant to this
Trust Agreement known to the Trustee and reasonably available for those purposes.
When DYLAN shall attain the following ages, the Trustee shall distribute to DYLAN the
following portion ofthe principal ofDylan's Trust:
Age

Portion ofDylan's Trust to Be Distributed

Twenty-five(25)years

One-third (1/3)ofthe balance ofDylan's
•

Thirty-three(33) years

Trust

One-half(1/2)ofthe balance ofDylan's
Trust

Forty(40) years

The balance ofDylan's Trust, together with
any undistributed income therefrom.

IfDYLAN has already reached any one or more ofthose ages upon the creation of
Dylan's Trust, the Trustee shall distribute to DYLAN that portion or all ofDylan's Trust
based on the age or ages set forth above and reached by DYLAN at that time. The
Trustee shall determine that portion ofDylan's Trust to distribute by treating DYLAN as
first reaching the first age level mentioned above and then, ifapplicable, proceeding to
the next age level(and subsequent levels, ifappropriate).

Page 17 THIRD AMENDED AND RESTATED
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 7.6
Distribution of Dylan's Trust Upon the Death ofDYLAN. If
DYLAN shall die prior to receiving full distribution ofDylan's Trust, the undistributed
balance of Dylan's Trust shall be allocated as follows:
(a)

If NANCY COSTICK Is Then Living. If NANCY

COSTICK is living at the time ofallocation hereunder, and if Dylan's Trust includes an
interest in the Palisades Residence,such residence shall be allocated to Nancy's
Residence Trust.

(b)

Remaining Dylan's Trust Assets. The balance ofthe

principal ofDylan's Trust remaining after the allocation pursuant to Paragraph 7.6(a)(if
any)shall be added to the Issue's Trust, to be held as a part thereofand subject to all ofits
terms.

ARTICLE 8
ADMINISTRATION OF NANCY'S RESIDENCE TRUST:

8.1

Administration ofNancy's Residence Trust as Set Forth in This

Article. The Trustee shall retain, administer or distribute Nancy's Residence Trust as set
forth in this Article.

8.2
Distribution ofIncome. The net income ofNancy's Residence
Trust shall be distributed to or applied for the use and benefit ofNANCY COSTICK in

monthly or other convenient installments, but not less frequently than quarter-annually.
8.3
Support of NANCY COSTICK. Notwithstanding anything to the
contrary contained in this Article, at any time that Nancy's Residence Trust holds cash or
other liquid assets, it shall be the discretionary duty ofthe Trustee, fi'om time to time,to

distribute to or apply for the use and benefit ofNANCY COSTICK for her proper and
reasonable support, maintenance and health, all or any part ofthe principal ofNancy's

Residence Trust. Subject to the foregoing,istributions to NANCY COSTICK imder this
Paragraph shall be on the basis ofmaintaining the standard ofliving to which NANCY
COSTICK was accustomed at the time ofthe death ofthe Grantor. In making any
distributions of principal to or for the benefit ofNANCY COSTICK under this
Paragraph,the Trustee shall take into consideration, to the extent the Trustee deems •

advisable, any income or other resources ofNANCY COSTICK,outside ofNancy's
Residence Trust, known to the Trustee and reasonably available for those purposes.
8.4
No Distributions ofPrincipal. The Trustee shall not make any
distributions of principal from Nancy's Residence Trust, except upon termination of
Nancy's Residence Trust.

Page 18 THIRD AMENDED AND RESTATED
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 8.5

Nancy's Residence for the Benefit of NANCY COSTICK. The

Trustee is authorized and directed to allow NANCY COSTICK to use and occupy the
Palisades Residence as her residence without payment ofrent therefor during her
lifetime.

(a)

Expenses ofResidence. To the extent possible, the Trustee

shall pay from Nancy's Residence Trust the proportionate share ofthe costs and expenses
of maintaining any residence held by Nancy's Residence Trust(whether the Palisades
Residence or a Substitute Residence), including, but not limited to, property taxes,
assessments (specifically including, but not limited to, condominium association dues),
fire and casualty insurance premiums, maintenance costs, ordinary repairs and
replacements, utilities and grounds maintenance (collectively, the "Residence
Expenses"). To the extent possible, the Trustee shall also pay from Nancy's Residence
Trust the proportionate share ofany notes secured by mortgages or deeds oftrust on any
residence(whether the Palisades Residence or a Substitute Residence) held by Nancy's
Residence Trust. However, if, as is anticipated, Nancy's Residence Trust does not have
sufficient assets to pay the Residence Expenses,then NANCY COSTICK shall be
responsible for all such payments. IfNANCY COSTICK fails to pay such Residence
Expenses within sixty(60)days ofa written demand for such payment,then the Trustee
is authorized to mortgage the Palisades Residence(or any Substitute Residence),subject
to NANCY COSTICK's consent, in order to acquire funds for such expenses, whereupon
NANCY COSTICK shall be responsible for all payments of mortgage interest and
principal, or to sell Nancy's Residence(or any Substitute Residence) without the consent
ofNAlNCY COSTICK. The Trustee shall hold,administer and distribute the net
proceeds ofthe sale or any refinance ofthe Palisades Residence(or any Substitute
Residence) under the terms ofthis Article.

(b)
Substitute Residence. Upon the written request ofNANCY
COSTICK(and subject to the approval ofthe Trustee based upon all circumstances then
existing, including the ability ofNANCY COSTICK to provide for the payment of
expenses relating to the Substitute Residence from her own funds), the Trustee shall sell
or otherwise transfer the interest ofNancy's Residence Trust in Nancy's Residence and
shall purchase, acquire or build a residence ofequal or lesser value (foe "Substitute
Residence"). Title to the Substitute Residence shall be taken in foe name offoe Trustee

ofNancy's Residence Trust as to the interest so purchased or otherwise acquired, and
NANCY COSTICK shall be allowed to occupy the Substitute Residence on foe terms
previously set out in this Paragraph. IfNANCY COSTICK does not request acquisition
ofa Substitute Residence, or iffoe Substitute Residence is oflesser value,foe Trustee
shall invest the proceeds ofthat sale, or the amount not reinvested in the Substitute
Residence, as the case may be, and shall administer and distribute the income and
principal ofthose fiinds under foe terms ofthis Article.

Page 19 TfflRJD AMENDED AND RESTATED
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 (c)

Sale ofResidence Under Certain Circumstances. If

NANCY COSTICK ever ceases to occupy a residence held by Nancy's Residence Trust
(whether Nancy's Residence or a Substitute Residence), the Trustee may sell the interest
ofNancy's Residence Trust in that residence.

(d)

Use of Sales Proceeds. Ifat any time while NANCY

COSTICK is living, the Trustee sells Nancy's Residence(or any Substitute Residence)
and either(1) does not acquire a Substitute Residence or(2) acquires a Substitute
Residence which is lesser in value than Nancy's Residence(or the Substitute Residence
which is being sold), the sales proceeds(or the sales proceeds remaining after purchase of
the Substitute Residence), the Trustee shall invest the proceeds of that sale, or the amount
not reinvested in the Substitute Residence, as the case may be, and shall administer and
distribute the income and principal ofthose funds under the terms ofthis Article.
(e)

Trustee's Power to Require Proof ofCompliance with

Terms ofNancy's Residence Trust. The Trustee shall have the power to demand any and
all assurances from NANCY COSTICK that all Residence Expenses are being paid
currently, including the ability to demand that Nancy's Residence Trust be named as a

"designated third party" entitled to copies ofbilling statements relating to the Residential
Expenses.

(0
Definition of"Residence". As used in this Paragraph,the
word "residence" shall mean Nancy's Residence as originally distributed to the Trustee
and/or any other Substitute Residence acquired in accordance with the provisions ofthis
Paragraph, whether occupied on a full-time or part-time basis, including resort property.
Further, the term "residence" as used in this Paragraph shall include, without limitation, a
dwelling house, mobile home,condominium, co-operative, own-your-own apartment unit
and any other residential unit, including life care in a retirement facility.
8.6
Distribution ofNancv's Residence Upon the Death ofNANCY
COSTICK. Upon the death of NANCY COSTICK,Nancy's Residence Trust shall
terminate. Upon termination, any property remaining in Nancy's Residence Trust shall
be allocated to the Issue's Trust, to be held as a part thereof and subject to its terms.
ARTICLE 9
ADMINISTRATION OF ISSUE'S TRUST:

9.1

Administration ofIssue's Trust as Set Forth in This Article. The

Trustee shall retain, divide, administer or distribute the Issue's Trust, including any assets
received from time to time subsequent to the death ofthe survivor ofthe Grantor and the
Spouse by the Issue's Trust, as set forth in this Article.

Page 20 THIRD AMENDED AND RESTATED
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 9.2

Division and Allocation of Issue's Trust. The Trustee shall divide

the Issue's Trust into as many equal shares as there are children ofthe Grantor then living
and children ofthe Grantor then deceased leaving issue then living. The Trustee shall
allocate one(1)equal share to each living child ofthe Grantor and one(1)equal share to
each group composed ofthe living issue ofa deceased child ofthe Grantor, to be further
allocated in subshares among those issue by right ofrepresentation. Each share or
subshare established pursuant to this Paragraph shall be a separate Trust(an "Article 9
Trust"), to be held, administered and distributed in accordance with the remaining
provisions ofthis Article. With respect to any benefits ofa Qualified Retirement Plan (as
hereafter defined in the Article entitled "Administration ofRetirement Plan Trusts") to be
allocated to the Issue's Trust, such benefits shall be specifically allocated among the
Beneficiaries ofthe Issue's Trust(determined pursuant to this Paragraph in accordance
with the foregoing principles set forth in this Paragraph). The share ofsuch benefits
allocated to each Beneficiary ofthe Issue's Trust shall be held by the Qualified
Retirement Plan administrator as a separate account in accordance with the Article
entitled "Administration ofRetirement Plan Trusts."

9.3
Distribution ofIncome ofArticle 9 Trust. Subject to the remaining
provisions ofthis Article, the net income ofan Article 9 Trust shall be distributed to or
applied for the use and benefit ofthe respective Beneficiaiy thereofin monthly or other
convenient installments, but not less fi-equently than quarter-annually.
9.4

Income of Article 9 Trusts for Beneficiarv Under Certain Age.

Notwithstanding anything to the contrary herein, ifany Beneficiary ofan Article 9 Trust
shall become entitled to income fi-om that Beneficiary's Article 9 Trust before that
Beneficiary has reached the age oftwenty-two(22) years, then the Trustee shall continue
to hold the income fi-om that Beneficiary's Article 9 Trust in trust, with like powers as to
management and investment thereofas herein set out and shall use and apply that
income, as the Trustee may deem necessary, directly for the proper and reasonable
support, maintenance, health and education ofthe Beneficiary. Any unexpended part of
the net income shall be added to the principal until that Beneficiary reaches the age of
twenty-two(22) years, fiom and after which time that Beneficiary shall be entitled to the
net income from that Beneficiary's Article 9 Trust as hereinbefore set forth. Income not
expended for a Beneficiaiy shall become principal ofthat Beneficiary's Article 9 Trust
and shall be distributed as hereinafter set forth in this Article.

9.5
Distributions ofPrincipal fiom Article 9 Trusts. Until complete
distribution pursuant to the provisions ofthis Paragraph, the Trustee may distribute to or
apply for the benefit ofeach Beneficiary or that Beneficiary's issue, out ofthe principal of
that Beneficiary's Article 9 Trust, those sums as the Trustee, in the Trustee's discretion,

considers necessary for the proper support, maintenance, health and education ofany one
or more ofthat Beneficiary or that Beneficiary's issue, after taking into consideration, to
the extent the Trustee considers advisable, any income or other resources ofthe

Page 21 THIRD AMENDED AND RESTATED
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 Beneficiary or that Beneficiary's issue, as appropriate, outside of any Trust created
pursuant to this Trust Agreement known to the Trustee and reasonably available for those
purposes; provided, however, that no portion ofthe amount or amounts so distributed
may be used to discharge any obligation ofa parent ofsuch issue to support any ofthose
issue. Any distribution or application of benefits to or for any issue of a Beneficiary
under this Paragraph shall be charged against that Beneficiary's Article 9 Trust as a
whole, rather than against any potential ultimate distributive share ofthe issue (or such
issue's lineal ancestors or lineal descendants) to whom or for whose benefit the
distribution is made. When any Beneficiary shall attain the following ages, the Trustee
shall distribute to that Beneficiary the following portion ofthe principal ofthat
Beneficiary's Article 9 Trust:
Age

Portion of Article 9 Trust to Be Distributed

Twenty-five(25) years

One-third (1/3)ofthe balance ofthe
Article 9 Trust

Thirty-three(33) years

One-half(1/2)ofthe balance ofthe Article 9
Trust

Forty(40) years

The balance ofthe Article 9 Trust, together
with any undistributed income therefrom.

Ifany Beneficiary of an Article 9 Trust has already reached any one or more ofthose
ages upon the death ofthe Grantor or at any later time when the Article 9 Trust for such
Beneficiary is created, the Trustee shall distribute to that Beneficiary that portion or all of
that Beneficiary's Article 9 Trust based on the age or ages set forth above and reached by
that Beneficiary at that time. The Trustee shall determine that portion ofthe
Beneficiary's Article 9 Trust to distribute by treating the Beneficiary as first reaching the
first age level mentioned above and then, if applicable, proceeding to the next age level
(and subsequent levels, if appropriate).

9.6
Distribution ofArticle 9 Trust Upon the Death ofa Beneficiarv.
Upon the death ofa Beneficiary ofan Article 9 Trust, the undistributed balance ofthat
Beneficiary's Article 9 Trust shall be allocated into separate Article 9 Trusts among the
issue ofthat deceased Beneficiary, with allocation to be made among such issue by right
ofrepresentation. Ifthere is no then-living issue ofthat deceased Beneficiary, the
deceased Beneficiary's Article 9 Trust shall be divided into shares and/or subshares for

the then-living issue ofthat deceased Beneficiary's nearest ancestor(provided any such

issue is a lineal descendant ofthe Grantor) not more remote than the Grantor, wii
allocation to be made among such issue by right ofrepresentation. Any share so
established for either(a)the issue ofthat deceased Beneficiary or(b)the issue ofthat
deceased Beneficiary's nearest ancestor not more remote than the Grantor(provided any
such issue is a lineal descendant of the Grantor) shall be held in trust and distributed in

Page 22 THIRD AMENDED AND RESTATED
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4198435VI

 accordance with this Article. However, ifany part ofthat deceased Beneficiary's Article
9 Trust would otherwise be held in thist for a Beneficiary for whose benefit a Trust is

already then being administered under this Trust Agreement, that part shall instead be
added to that Trust and shall thereafter be administered according to its terms, except
that, if that Trust provides for distribution in installments and ifthat Beneficiary has
received a fractional distribution ofthat Trust pursuant to its terms, then there shall be
distributed to that Beneficiary, free oftrust, a Section ofthat part equal to the fraction of
that Beneficiary's interest previously distributed to that Beneficiary.
9.7

Contingent Beneficiaries. Ifat the time ofthe death ofthe Grantor,

or at any later time before full distribution ofthe Trust Estate, no other disposition ofthe
Issue's Trust(or the Article 9 Trusts created thereunder) is directed by this Trust
Agreement,the property remaining in the Issue's Trust(or the Article 9 Trusts created
thereunder)(collectively, the "Remaining Article 9 Property") shall be distributed, free of
trust, to the Spouse. Ifthe Spouse is not living at the time ofoperation oftiiis Paragraph,
then the Remaining Article 9 Property shall be distributed, free oftrust, to those persons
who would then be the heirs ofthe Grantor, their identities and respective shares to be
determined as though the death ofthe Grantor had occurred at that time, in accordance

with the laws ofthe State of Califomia then in effect relating to the succession ofseparate
property not acquired from a predeceased spouse or ancestor.
ARTICLE 10
ADMINISTRATION OF RETIREMENT PLAN TRUSTS:

10.1

Administration of Retirement Plan Trusts As Set Forth in This

Article. Notwithstanding anything in this Trust Agreement to the contrary, ifthe Trust
created under this Trust Agreement or any other Trust created hereunder is named as the
beneficiary ofthe Grantor's Qualified Retirement Plan (as defined below), there shall be
created for a Beneficiary hereunder a separate subshare or subtrust from that
Beneficiary's share or Trust, as the case may be(the Beneficiary's "Primary Trust"),
which subshare or subtrust shall receive the benefits directly from the Qualified
Retirement Plan on behalfofthat Beneficiary. The amount allocated to each Beneficiary
shall be determined under the provisions ofthe designated Trust created under this Trust
Agreement Each Beneficiary's separate subtrust created from that Beneficiary's Primary
Trust shall be referred to as the "[ Name ofBeneficiary]Retirement Plan Trust." Each
Beneficiary's Retirement Plan Trust may be further divided into an "Exempt Trust" and a
"Nonexempt Trust," as provided in the Paragraph entitled "Creation of Separate Trusts
Based Upon Inclusion Ratio." Each Beneficiarys Retirement Plan Trust shall be
administered and distributed in accordance with the provisions ofthis Article.
10.2 Qualified Retirement Plan. The term "Qualified Retirement Plan"
refers to any employee benefit plan or individual retirement arrangement that is allowed

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 to accumulate any part of its earnings on an income tax deferred basis under the Internal
Revenue Code, including by way ofexample and not limitation, plans described under
sections 401, 403,408,408A and 457 ofthe Internal Revenue Code. A Qualified
Retirement Plan includes a plan that is reasonably believed to qualify under one or more
sections ofthe Internal Revenue Code, even if it is subsequently determined that such
plan does not so qualify.
10.3 Distributions During Life of Beneficiarv. During the life ofthe
Beneficiary, the Trustee shall distribute each year to or for the benefit ofthe Beneficiary
fi-om the Beneficiary's Retirement Plan Trust all amounts distributed fi*om the Qualified
Retirement Plan to the Beneficiary's Retirement Plan Trust in that year(net ofexpenses),
but disregarding distributions taken by the Trustee fi-om the Qualified Retirement Plan to
the extent applied to pay Death Taxes and GST taxes(if any)and income taxes thereon
paid in accordance with Paragraph 10.4 below. During the life ofthe Beneficiary, no
distributions may be made to anyone other than the Beneficiary in accordance with such
Beneficiary's Retirement Plan Trust.
10.4 Death Taxes. The Trustee may pay Death Taxes and GST taxes(if
any) attributed to the Qualified Retirement Plan allocated to the Beneficiary's Retirement
Plan Trust out ofother assets allocated to a Trust for the benefit ofthe Beneficiary or
fi-om funds received by the Trustee from the Beneficiary. To the extent the Death Taxes
and GST taxes(ifany)attributed to the Qualified Retirement Plan are not paid out of
other assets, the Trustee shall pay such Death Taxes and GST taxes (if any) and a
reasonable allowance for income tax payable by the Trustee thereon out ofdistributions
from the Qualified Retirement Plan.
10.5 Not Liable for Debts. Expenses or Taxes of Other Trust Assets.
Notwithstanding anything in this Trust Agreement to the contrary, any benefit under a
Qualified Retirement Plan payable to a Beneficiary's Retirement Plan Trust shall not be
used to pay any debts, expenses and/or taxes ofthe Grantor or ofany other Trust created
under this Trust Agreement.
10.6

Withdrawals from Qualified Retirement Plan and Trustee's

Discretion to Accelerate. Each year, the Trustee shall withdraw from the Qualified
Retirement Plan, the minimum required distribution under Section 401(a)(9)ofthe
Internal Revenue Code and the Treasury Regulations thereunder as they may be amended
from time to time. The Trustee is authorized to make or not make distribution elections

to accelerate or defer distributions from the Qualified Retirement Plan to the
Beneficiary's Retirement Plan Trust,taking into account, to the extent that the Trustee
deems advisable, the tax consequences ofsuch elections and the liquidity needs ofthe
Beneficiary's Retirement Plan Trust and its Beneficiary. Upon a Beneficiary reaching the
age or ages for distribution (ifany) under that Beneficiary's Primary Trust, Ae
Beneficiary shall have the power to direct the Trustee to make withdrawals from that

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419843Svl

 Beneficiaiy's Qualified Retirement Plan as to such portion or portions ofthe Beneficiary's
Retirement Plan Trust as would have been distributed to such Beneficiary under the
Beneficiary's Primary Trust. The Trustee shall be relieved ofany liability or
responsibility for any Beneficiary-directed action. Upon the Beneficiary reaching the age
for final distribution (ifany) under that Beneficiary's Primary Trust, that Beneficiary shall
immediately become the Trustee ofthat Beneficiary's Retirement Plan Trust.
10.7 Distribution upon Beneficiarv's Death. Upon the death ofthe
Beneficiary, any balance in the Beneficiary's Retirement Plan Trust shall be distributed in

accordance with the principles ofthat Beneficiaiy's Primary Trust.
ARTICLE 11
SUCCESSOR TRUSTEE:

11.1

Designated Successor Trustee. IfTHOMAS EARL PETTY shall

become unable to serve or otherwise cease to act as Trustee hereunder, then, subject to
the provisions ofParagraph 11.2 and Paragraph 11.3, the following named alternative
successor Trustees shall serve in the order listed:
FIRST:
SECOND:
THIRD:

11 -2

SPOUSE

ADRIA
BERNARD H.GUDVI.

Trustee ofDvlan's Trust. Notwithstanding the provisions ofthe

Paragraph 10.1 or any other provisions in this Trust Agreement to the contrary, ifDylan's
Trust is created, NANCY COSTICK shall act as Trustee of Dylan's Trust. If NANCY
COSTICK shall fail to qualify, become unable to serve or otherwise cease to act as
Trustee ofDylan's Trust, then the Trustee serving under Paragraph 11.1 shall act as
successor Trustee ofDylan's Trust.

11.3 Trustees of Article 9 Trusts. Notwithstanding the provisions of
Paragraph 11.1 or any other provisions in this Trust Agreement to the contrary, the
following individuals shall serve as Co-Trustees or sole Trustee ofthe Article 9 Trusts
created for the following Beneficiaries:
(a)
ADRIA's Article 9 Trust. BERNARD H.GUDVI and
ADRIA shall act as Co-Trustees ofany Article 9 Trust created for the benefit ofADRIA.

Ifeither BERNARD H.GUDVI or ADRIA shall fail to qualify, become unable to serve
or otherwise cease to act as Co-Trustee of ADRIA's Article 9 Trust, then the remaining
Co-Trustee shall act as sole Trustee ofADRIA's Article 9 Trust. Notwithstanding the
foregoing, if ADRIA's Article 9 Trust is still in effect five(5)years after its creation (in
other words, it has not yet been fully distributed to ADRIA pursuant to its terms), and
further ifBERNARD H.GUDVI is acting as Co-Trustee with ADRIA at that time, then

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 BERNARD H.GUDVI shall resign as Co-Trustee and ADRIA shall thereafter serve as
sole Trustee of ADRIA's Article 9 Trust.

(b)
KIM'S Article 9 Trust. BERNARD H. GUDVI and KIM
shall act as Co-Trustees ofany Article 9 Trust created for the benefit ofKIM. If either
BERNARD H. GUDVI or KIM shall fail to qualify, become unable to serve or otherwise
cease to act as Co-Trustee ofKIM'S Article 9 Trust, then the remaining Co-Trustee shall
act as sole Trustee of KIM's Article 9 Trust. Notwithstanding the foregoing, if KIM's
Article 9 Trust is still in effect five(5) years after its creation (in other words, it has not
yet been fully distributed to KIM pursuant to its terms), and further ifBERNARD H.
GUDVI is acting as Co-Trustee with KIM at that time, then BERNARD H.GUDVI shall
resign as Co-Trustee and KIM shall thereafter serve as sole Trustee ofKIM's Article 9
Trust.

(c)
Article 9 Trusts for the Benefit ofIssue of ADRIA and/or
KIM. BERNARD H. GUDVI shall act as sole Trustee ofany Article 9 Trust created for
the benefit of any issue of ADRIA and/or KIM.
11.4

Special Provisions Regarding Non-Resident Fiduciaries.

Notwithstanding the provisions ofthe foregoing Paragraph or any other provision in this
Trust Agreement, ifat any time an individual (the "Non-Resident Fiduciary") who is
named or nominated as a Trustee or successor Trustee ofany irrevocable trust created
hereunder is not a United States citizen or a United States resident for United States

federal income tax purposes,then the next named successor Trustee shall act as
Co-Trustee with the Non-Resident Fiduciary, provided such named successor Trustee is a
United States citizen or United States resident for United States federal income tax

purposes. Ifthe next named successor Trustee shall foil to qualify, become unable to
serve or otherwise cease to act as Co-Trustee hereunder, then the next named successor

Trustee, if any, shall act as Co-Trustee with the Non-Resident Fiduciary, provided such
named successor Trustee is a United States citizen or United States resident for United

States federal income tax purposes. Ifthere are no named successor Trustees or ifall the
named successor Trustees shall fail to qualify, become unable to serve or otherwise cease
to act as Co-Trustee hereunder, then the Non-Resident Fiduciary shall either(a)exercise
the Non-Resident Fiduciary's power under this Article to designate a Co-Trustee (either
an individual or a Corporate Trustee) who is a United States citizen or a United States
domestic corporation, who or which is not a related or subordinate party to the
Non-Resident Fiduciary within the meaning of Section 672(c)ofthe Internal Revenue
Code, to serve with the Non-Resident Fiduciary or(b) ifthe Non-Resident Fiduciary fails
to exercise such power,the adult Beneficiaries and the guardians ofany minor
Beneficiaries ofany Trust created hereunder, acting by majority vote, shall name a
Co-Trustee (either an individual or a Corporate Trustee) who is a United States citizen or
a United States domestic corporation, who or which is not a related or subordinate party
to the Non-Resident Fiduciary within the meaning of Section 672(c)ofthe Internal

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4I98435V1

 Revenue Code,to serve with the Non-Resident Fiduciary. Moreover, notwithstanding the
foregoing, unless the Non-Resident Fiduciary is a United States citizen or United States
resident for United States federal income tax purposes, at no time shall the Non-Resident
Fiduciary have the authority to control any substantial decisions ofthe Trust, and the
Co-Trustee who is acting with the Non-Resident Fiduciary shall solely control all such
decisions.

11.5 Power to Designate a Successor Trustee. If at any time, any
individual is named or acting as a Trustee hereunder and there is no named successor
Trustee to that individual or the named successor is then unavailable to act as Trustee

hereunder, then that individual shall have the power:
(a)

to designate one or more successor Trustees or Co-Trustees

who shall act as Trustee or Co-Trustees hereunder, as the case may be, in the order
designated if and when that individual ceases to act as Trustee hereunder, or
(b)

to designate a Co-Trustee to serve only with such

individual.

If, at any time, any individual is named as a Trustee hereunder and there is a named
successor Trustee or Trustees, that individual shall have the foregoing power:

(1)

contingent upon such named successor(s) not being

available to serve as Trustee at the time needed, or

(2)

when such named successor(s) ceases to act as

Trustee hereunder.

The foregoing power may be exercised by a Trustee by giving written notice ofthe
designation ofa successor Trustee to the then-living adult Beneficiaries, the guardians of
any minor Beneficiaries and the conservators ofany incapacitated Beneficiaries, and as
otherwise required by law. If more than one individual named Trustee exercises the
foregoing power, priority shall be given to the designations ofthe earlier named Trustee
hereunder, irrespective ofthe order in time that the foregoing notices were given. A
Co-Trustee shall have the same power to nominate successors as granted to a sole Trustee
hereunder, except that iftwo or more Co-Trustees make such designation, the named
successor Trustees ofa Co-Trustee shall be deemed to be named successor Co-Trustees

(to serve in the order of priority designated) with the named successor Trustees(also to
serve in the order of priority designated) ofthe other one or more Co-Trustees who made
such designation. Any designation pursuant to this Paragraph may be revoked or
amended by such Trustee by giving written notice in the same manner as the designation
was made as provided above. Any Trustee designated pursuant to this Paragraph shall
have all ofthe powers conferred upon a named Trustee under this Trust Agreement, shall

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4l98435vl

 serve without bond and shall for all other purposes be treated as a named Trustee under
this Trust Agreement.

11.6 Right ofTrustee to Resign. Any Trustee acting as a Trustee under
any Trust created hereunder may resign and be discharged from acting as a Trustee of
that Trust by giving written notice of its resignation to any remaining Co-Trustee, to the
adult Beneficiaries, to the guardians ofany minor Beneficiaries and to the conservators of

any incapacitated Beneficiaries. The notice shall be served personally or by certified or
registered mail, postage prepaid, return receipt requested, and shall specify the date when
the resignation shall take effect. The effective date ofthe resignation shall be at least
thirty(30)days after the service or mailing thereof, unless the person or persons to whom
notice ofthe resignation shall have been given shall otherwise consent. The adult

Beneficiaries, the guardians ofany minor Beneficiaries and to the conservators of any
incapacitated Beneficiaries, unless a successor Trustee is designated or otherwise
appointed as provided in this Trust Agreement, may by action ofa majority in interest, in
a written instrument, designate a successor Trustee or Co-Trustees (either individual
Trustees and/or a Corporate Trustee)for the Trusts herein created; provided that any
designated successor Corporate Trustee has either(a) a combined capital and surplus
(including the capital and surplus of its affiliated entities) ofat least Fifty Million Dollars
($50,000,000), or(b)assets under management(including assets under management by
its affiliated entities) ofat least One Billion Dollars($1,000,000,000)and provided
further, that the Beneficiaries shall not be permitted to designate any individual Trustee
who is considered to be a related or subordinate peirty subservient to the wishes of any
Beneficiary, within the meaning ofInternal Revenue Code Section 672(c)or any
successor to that Section.

11.7 Declination ofa Named Successor Trustee. Any person or
Corporate Trustee named as a successor Trustee under the Trust may decline at any time
to act as Trustee ofany Trust created hereunder by giving written notice ofdeclination to

the acting Trustee. Ifthere is no acting Trustee at that time, notice shall instead be given
to the next named Trustee or, if none is named,then to the adult Beneficiaries, the

guardians ofany minor Beneficiaries and to the conservators ofany incapacitated
Beneficiaries. The notice may be served personally, or by certified or registered mail,
postage prepaid, return receipt requested.

11.8 Substitution of Corporate Trustee. At any time that a Corporate
Trustee is serving as Trustee of any Trust created pursuant to the provisions ofthis Trust
Agreement,the adult Beneficiaries, the guardians ofany minor Beneficiaries and the
conservators ofany incapacitated Beneficiaries ofsuch Trusts shall have the power, by
action ofa majority in interest(except for the Administrative Trust which shall require
unanimity),to transfer the administration ofthose Trusts to a new Corporate Trustee who
has either(a)a combined capital and surplus(including the capital and surplus ofits
affiliated entities) ofat least Fifty Million Dollars($50,000,000), or(b)assets under

Page 28 THIRD AMENDED AND RESTATED
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419843SVI

 management(including assets under management by its aiFiliated entities) of at least One
Billion Dollars($1,000,000,000). The substitution ofa new Corporate Trustee shall be
made by the giving of written notice by the adult Beneficiaries, the guardians of any
minor Beneficiaries and the conservators of any incapacitated Beneficiaries, directed to
the then-acting Corporate Trustee, indicating the desire ofthe adult Beneficiaries, the
guardians of any minor Beneficiaries and the conservators of any incapacitated
Beneficiaries to effect a substitution in the office ofCorporate Trustee and designating
the new Corporate Trustee selected. Upon securing the approval ofthe transfer and
substitution by a court ofcompetentjurisdiction to the extent that the approval may be
required by law, or within thirty(30)days after receipt ofthe above-mentioned notice,
the Corporate Trustee then serving as Trustee hereunder shall transfer and convey the
entire interest ofthat Corporate Trustee in the Trust Estate to the new and substituted
Corporate Trustee. The purposes ofthe foregoing provisions are to insure harmonious
relations between the Corporate Trustee and the Beneficiaries, and to further the effective

and efficient management ofthe Trusts created hereunder. At any time that a Corporate
Trustee is named as a Trustee ofany Trust created pursuant to the provisions ofthis Trust
Agreement and that Corporate Trustee(a)declines to act as Trustee,(b)otherwise does
not commence to act as Trustee or(c)is a named successor Trustee, the adult
Beneficiaries, the guardians ofany minor Beneficiaries and the conservators of any
incapacitated Beneficiaries ofsuch Trust shall have the power, by action ofa majority in
interest, to substitute a new Corporate Trustee in the place ofthe named Corporate
Trustee. The new Corporate Trustee must have either(a)a combined capital and surplus
(including the capital and surplus ofits affiliated entities) ofat least Fifty Million Dollars
($50,000,000), or(b)assets under management(including assets under management by
its affiliated entities) ofat least One Billion Dollars($1,000,000,000). The new
Corporate Trustee shall replace the named Corporate Trustee for all purposes ofthis
Trust Agreement.

11.9 Effect of Succession ofTrustees. Any successor ofa Trustee
hereunder, whether resulting jfrom consolidation, merger, or the transfer ofTrust business
or fi-om death, resignation, refusal or inability to act, or by any other reason, shall succeed
as Trustee with like effect as though originally named as such.
11.10 Powers and Authorities ofSuccessor Trustee. All powers and
authorities, including discretionary and administrative powers, herein conferred upon a
Trustee shall pass to any subsequent Trustee.
11.11 No Dutv ofSuccessor Trustees to Investigate. A succeeding
Trustee shall not be under any duty to examine the books and records ofits predecessor
Trustee and may accept as the full Trust Estate properties tumed over to it.
11.12 Indemnification ofTrustee. To the greatest extent not inconsistent
with the laws and public policies ofthe state of California, no Trustee serving under this

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 Trust Agreement shall be liable, responsible or accountable in damages or otherwise to

the beneficiaries ofthe Trust for any acts performed within the scope ofthe authority
conferred on such Trustee by this Trust Agreement, except for such Trustee's gross
negligence or willful misconduct. The Trust shall indemnify and hold harmless the
Trustee fi-om and against any and all losses, claims, demands, costs, damages, liabilities,
expenses ofany nature(including reasonable attorneys' fees and disbursements),
judgments, fines, settlements and other amounts arising from any and all claims,
demands, actions, suits or proceedings, whether civil, criminal, administrative or
investigative, brought against, or threatened against, such Trustee because such Trustee
was a Trustee ofthe Trust. Such indemnification shall be provided regardless of whether
the Trustee continues to be a Trustee at the time any such liability or expense is paid or
incurred.

(a)
Expenses incurred by a Trustee in defending any claim,
demand, action, suit or proceeding subject to this Paragraph shall from time to time be
advanced by the Trust prior to the final disposition ofsuch claim, demand, action, suit or
proceeding.

(b)
The indemnification provided by this Paragraph shall be in
addition to any other rights to which those indemnified may be entitled under any
agreement, vote ofthe Beneficiaries, as a matter oflaw or equity or otherwise, and shall
inure to the benefit ofthe heirs, successors, assigns and administrators ofthe Trustee.
(c)
The Trustee may purchase and maintain insurance, at the
Trust's expense, on behalfofthe Trustee, against any liability that may be asserted
against, or any expense that may be incurred by,such persons in connection with the
activities ofthe Trust and/or the acts or omissions ofsuch persons, regardless of whether
the Trust would have the power to indemnify such persons against such liability under
the provisions ofthis Trust Agreement.

11.13 Special Trustee for Life Insurance Policies. Notwithstanding
anything contained in this Trust Agreement to the contrary, at any time while the Spouse
is acting as Trustee ofthe Issue's Trust, the next named successor Trustee hereunder shall
have all powers, duties and obligations hereunder with respect to life insurance policies
held by the Issue's Trust The next named successor Trustee hereunder shall hold the
powers in trust as "Special Trustee." At any time while the Spouse is acting as Trustee of
the Issue's Trust, the Spouse shall, on the request ofan insurance company, execute any
documents required to implement the actions taken by the Special Trustee. Ifthe next
named successor Trustee hereunder shall fail to qualify, become unable to serve or
otherwise cease to act as Special Trustee hereunder, then the next named successor
Trustee hereunder, if any, who qualifies and is willing to act, shall act as successor
Special Trustee under this Trust Agreement.

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 1 1.14 Power to Designate a Successor Special Trustee. If, at any time,
any individual is named as a Special Trustee hereunder and there is no named successor
Special Trustee to that individual or the named successor is then unavailable to act as
Special Trustee hereunder, then that individual shall have the power:

(a)
to designate one or more successor Special Trustees or
Special Co-Trustees who shall act as Special Trustee or Special Co-Trustees hereunder,
as the case may be, in the order designated if and when that individual ceases to act as
Special Trustee hereunder, or

(b) to designate a Special Co-Trustee to serve only with such
individual, which designation shall provide that such designated Special Co-Trustee shall
be deemed to resign and shall cease to serve as Special Co-Trustee if, as and when the
individual who designated him ceases to serve as Special Co-Trustee.

If, at any time, there is a named successor Special Trustee or Special Trustees, that
individual shall have the foregoing power:
(1)

contingent upon such named successor(s) not being

available to serve as Special Trustee at the time needed, or

(2)

when such named successor(s) ceases to act as

Special Trustee hereunder.

The foregoing power may be exercised by a Special Trustee by giving written notice of
the designation ofa successor Special Trustee to the then-living adult Beneficiaries, the
guardians ofany minor Beneficiaries and the conservators ofany incapacitated
Beneficiaries, and as otherwise required by law. If more than one individual named
Special Trustee exercises the foregoing power, priority shall be given to the designations
ofthe earlier named Special Trustee hereunder, irrespective ofthe order in time that the
jforegoing notices were given. A Special Co-Trustee shall have the same power to
nominate successors as granted to a sole Special Trustee hereunder, except that iftwo or
more Special Co-Trustees make such designation, the named successor Special Trustees
ofa Special Co-Trustee shall be deemed to be named successor Special Co-Trustees(to
serve in the order of priority designated) with the named successor Special Trustees(also
to serve in the order of priority designated)ofthe other one or more Special Co-Trustees
who made such designation. Any designation pursuant to this Paragraph may be revoked
or amended by such Special Trustee by giving written notice in the same manner as the
designation was made as provided above. Any Special Trustee designated pursuant to
this Paragraph shall have all ofthe powers conferred upon a named Special Trustee under
this Trust Agreement, shall serve without bond and shall for all other purposes be treated
as a named Special Trustee under this Trust Agreement.

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 ARTICLE 12
POWERS OF TRUSTEE:

12.1 Powers ofTrustee. To carry out the purposes ofany Trust created
pursuant to the terms ofthis Trust Agreement and subject to any limitations stated

elsewhere in this Trust Agreement,the Trustee is vested with the powers set forth in this
Trust Agreement, including but not limited to those powers contained in this Article in
addition to any now or hereafter conferred by law affecting any Trust created hereunder
and the Trust Estate. In the event and to the extent that the terms ofthe prudent investor

rule or the Uniform Prudent Investor Act broaden, restrict, conflict or contradict any of
the terms ofthis Trust Agreement,then this Trust Agreement and not the prudent investor
rule or the Uniform Prudent Investor Act shall apply. Any and all ofthe powers ofthe
Trustee are subject to the fiduciary obligation ofthe Trustee to treat all beneficiaries

hereunder equitably. In the event that Co-Trustees are serving as Trustee ofany Trust
created hereunder, the powers set forth in this Trust Agreement shall be exercisable by
unanimous action ofthe Co-Trustees acting jointly and not otherwise. Except as
provided elsewhere in the Trust Agreement,the signatures ofall Co-Trustees shall be
required to evidence the exercise ofany trustee power.
12.2

Power to Act as Owner. The Trustee is authorized to do all acts,

initiate all proceedings and exercise all rights and privileges in the management ofthe
Trust Estate as ifthe absolute owner thereof. Without limiting the generality ofthe
foregoing, the Trustee shall have the right and power to acquire, grant, bargain, sell (for
cash or on deferred payments), sell short, convey, exchange, convert, lease for terms
either within or beyond the duration ofthe Trust, grant for like terms the right to mine or
drill for and remove fi-om Trust properties gas, oil or minerals, encumber, borrow,
hypothecate, assign, partition, divide, subdivide, improve, loan, reloan or grant options on
any and all property ofthe Trust Estate. The Trustee is authorized to borrow money for
any Trust purpose for the debts ofthe Trust or thejoint debts ofthe Trust and a
beneficiary, upon terms and conditions as the Trustee may deem to be proper and to
obligate the Trust Estate for repayment; and the Trustee may encumber the Trust Estate

or any ofits property(for the obligations ofthe Trust or any beneficiary) by mortgage,
deed oftrust, pledge, guarantee or otherwise, using such procedure or procedures to
consummate the transaction or transactions as the Trustee may deem advisable. The
Trustee is authorized to guarantee any loans made to the Grantor and any other
obligations (including obligations ofunrelated third parties and obligations of business
entities in which the Grantor may have an interest), and to encumber any and all ofthe
Trust Estate or any ofits property by mortgage, deed oftrust, pledge or otherwise, using
such procedure or procedures to consummate the transaction or transactions as the

Trustee may deem advisable. Except as otherwise specifically provided in this Trust
Agreement, all transactions shall be for fair and adequate consideration.

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 12.3

Investment Powers. The Trustee is authorized to invest and

reinvest the principal, and the income ifthe Trustee is permitted to accumulate it. In so
doing, the Trustee shall act with the care, skill, prudence and diligence under the
circumstances then prevailing, specifically including, but not by way of limitation, the
following:
(a)

General economic conditions.

(b)

The possible effect of inflation or deflation.

(c)

The expected tax consequences of investment decisions or

strategies.
(d)
The role that each investment or course ofaction plays
within the overall Trust portfolio.

(e)

The expected total return from income and the appreciation

ofcapital.
(f)
Other resources ofthe beneficiaries known to the Trustee
as determined from information provided by the beneficiaries.

(g)
or appreciation ofcapital.

Needs for liquidity, regularity ofincome, and preservation

(h)
An asset's special relationship or special value, if any, to
the purposes ofthe Trust or to one or more ofthe beneficiaries.
(i)

The anticipated needs ofthe Tmst and its beneficiaries.

The Trustee shall consider individual investments as part ofan overall investment
strategy having risk and return objectives reasonably suited to the purposes ofthe Trust.
In so doing,the Trustee shall act as a prudent person acting in a like capacity and familiar
with such matters would use in the conduct ofan enterprise ofa like character and with
like aims, to attain the goals ofthe Grantor as determined from the Trust Agreement.
Within the limitations ofthe foregoing standard and considering individual investments
as part of an overall investment strategy, the Trustee is authorized to acquire eveiy kind
ofproperty, real, personal or mixed, and every kind ofinvestment, specifically including,
but not by way oflimitation, corporate and government obligations of every kind,
preferred or common stocks(on margin or otherwise), interests in limited liability
companies, commodities(on margin or otherwise), options(whether covered or not) or
futures for stocks, stock index options, commodities or other assets, any other derivative
securities, shares ofinvestment trusts, shares ofinvestment companies, shares of mutual
funds (including mutual funds of which the then-acting Trustee or an affiliate ofthe then-

Page 33 THIRD AMENDED AND RESTATED
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 acting Trustee serves as investment adviser), mortgage participations, partnership

interests(general or limited) and common trust funds(including common trust fiinds
administered by the then-acting Trustee or an affiliate ofthe then-acting Trustee).
Further, subject to the standards and limitations stated in this Trust Agreement, the
Trustee is specifically authorized to(but is not required to) invest funds or assets
belonging to the Trust Estate (a)in the purchase or construction ofa home for a
Beneficiary and/or(b)in the commencement or conduct ofa trade or business by a
Beneficiary. The Trustee is authorized to invest the entire Trust Estate in interest-bearing
accounts, certificates ofdeposit, market funds, index funds or any other non-equity
income-producing investment, notwithstanding the possible decrease of purchasing
power ofthe value ofthe principal ofthe Trust Estate.
12.4 Power to Retain or Abandon Propertv. The Trustee is authorized
to continue to hold any property, including all assets received by the Trustee(from any
and all sources) and to operate at the risk ofthe Trust Estate any property or business
received as long as the Trustee may deem it advisable, the profits and losses thereon to
inure to or be chargeable against the Trust Estate and not to the Trustee. Except to the
extent prohibited by law, no statutoiy provision shall constitute a limitation upon the
exercise by the Trustee of discretion in continuing to hold securities, properties,
partnership interests (general and limited), interests in limited liability companies,
business interests or investments received hereunder. Notwithstanding the foregoing, no
provision contained herein should be construed to give the Trustee the power to retain
any property beyond the date such property is to be distributed to any Beneficiaiy
hereunder. The Trustee may,in the Trustee's discretion, abandon any property or interest
in property belonging to any Trust ifthe Trustee determines, in the Trustee's discretion,
that the abandonment is in the best interests ofthe Trust and its beneficiaries.

12.5 Management Powers. The Trustee may, at the option ofthe
Trustee, at any time, in connection with the management ofthe Trust Estate or the
collection ofany monies due or payable to a Trust hereunder, compromise any claims
existing in favor ofor against the Trust. The Trustee may loan or advance the Trustee's
own funds for any Trust purpose to the Trust without security or upon the security ofall
or any portion ofthe principal ofthe Trust involved. Those loans shall bear interest at the
then-current rate from date ofadvancement until repaid. However,the Trustee shall in no
event be required to make any loan or advancement to the Trust. Any certificate, security
or any evidence ofindebtedness or ownership of property may be registered or taken and
held in the name ofthe Trustee, or in the name ofthe nominee or nominees ofthe
Trustee, with or without the disclosure offiduciary relations, in order to more readily
facilitate the handling ofthe Trust Estate. However,the Trustee shall be liable for any
loss occasioned by the acts ofsuch nominee or nominees affecting these securities ifthe
Trustee would have been liable had the Trustee done the same acts.

Page 34 THIRD AMENDED AND RESTATED
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 12.6

Reimbursement ofTrustee. The Trustee is authorized to reimburse

itselffrom principal or income for any expense incurred by reason ofthe Trustee's
fiduciary ownership or holding of any property in the Trust Estate.
12.7 Power to Employ. The Trustee may employ attorneys,
accountants, brokers, agents, managers, appraisers, investment advisers, custodians,
corporate fiduciaries and others whose services are in the Trustee's discretion reasonably
necessary or convenient to the administration ofthe Trust or for the carrying out ofany of
the Trustee's powers or discretions hereunder. The Trustee shall not be liable to the Trust
or to any beneficiaries as a result ofany losses, costs or damages ofany kind, type or
nature, suffered or incurred by the Trust or by any Beneficiary resulting from the
Trustee's reasonable good &ith reliance on professional advice rendered by any
professional advisers engaged by the Trustee on behalfofthe Trust. The Trustee is
authorized to employ the Trustee or any firm with which the Trustee is associated to
perform any services that are in the Trustee's discretion necessary or convenient to the
administration ofthe Trust created hereunder. Reasonable compensation for all services
performed by these agents shall be paid from the Trust Estate, and shall not decrease the
compensation to which the Trustee is entitled.
12.8 Installment Pavments ofIncome. Except as otherwise indicated
herein, the Trustee shall make the payments ofthe annual net income ofany Trust
required to be distributed hereunder at least quarter-annually or more often in the
discretion ofthe Trustee. The Trustee shall have the power to budget the estimated
annual income and expenses ofthe Trust in such manner as to equalize, as far as possible,
periodic income payments to the Beneficiaries. In computing the amount ofany such
installment, the Trustee may, to the extent deemed appropriate by tihe Trustee, make
reservation for expenses to be charged against such net income.
12.9 Segregation and Distribution of Assets. There need be no physical
segregation or division ofthe various Trusts, except as segregation or division may be
required by the termination ofany Trusts. Regardless of any segregation or division of
the various Trusts, the Trustee shall keep separate accounts for the different undivided
interests. Upon any division ofthe Trust Estate into separate shares or Trusts occurring
after the separate Trusts were created in Article 5, and upon any distribution ofthe
income or principal, the Trustee may apportion and allocate the assets ofthe Trust Estate
in cash or in kind, or partly in cash and partly in kind, or in undivided interests in such
manner and at such values as the Trustee in its discretion deems advisable. Any
distribution or division in kind may be made on a proportionate or a disproportionate
basis so long as the respective assets allocated or distributed have equivalent or
proportionate fair market value. In making in kind allocations ofassets, the Trustee shall
take into consideration the income tax basis ofspecific property to be so allocated in
determining equivalence of value, to the extent that the Trustee deems it advisable and/or
to the extent any other adjustments are determined by the Trustee to be reasonable. The

Page 35 THIRD AMENDED AND RESTATED
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 Trustee may sell such property as it deems necessary to make any division or distribution.
After any division ofthe Trust Estate, the Trustee may makejoint investments with funds
from some or ail ofthe several shares or Trusts.

12.10 Trust Distributions. Upon any distribution ofa Trust, in whole or
in part, the Trustee may assign, transfer or deliver in kind to the Beneficiary then entitled
thereto, any part ofthe Trust Estate or an undivided interest in the Trust Estate, or any
portion thereoi^ at the value as the Trustee may establish as the then fair market value.
No interest shall be paid on any specific distribution ofcash or property (if any)set forth
in this Trust; except, however, this provision shall not be applicable to(a)the Marital
Trust nor to any other specific distribution to the Spouse; and (b)any pecuniary gift ifa
failure to pay interest thereon or with respect thereto would adversely affect the use ofthe
exemption from the generation-skipping transfer("GST")tax ofthe Grantor. Ifthe Trust
Estate includes one or more promissory notes with respect to which gain would be
accelerated under Section 453B ofthe Internal Revenue Code if distributed to a

Beneficiary, the Trustee, in its sole discretion, may elect not to distribute such note(s) at
the time provided in this Trust Agreement. In the event the Trustee so elects, such
note(s)shall continue to be held in trust and the payments received by the Trustee under
the note(s) shall be divided, held, administered and distributed as otherwise set forth in
this Trust Agreement, until the Trustee determines to distribute the note(s) or until the
note(s) are paid in fiill. Further, the Trustee may,for any reason, elect not to distribute all
or any portion ofthe principal ofthe Trust Estate with the consent ofthe Beneficiary who
or which is entitled to receive such distribution, until such time as that Beneficiary
desires to receive distribution ofsuch principal. In connection with any principal
distributions required hereunder as a result ofa Beneficiary attaining a stated age,the
Trustee may make such distribution at any time after the date on which such Beneficiary
attains such stated age and ending on the last day ofthe same calendar year.
12.11 Powers ofTrustee In the Event ofBeneficiarv Misconduct.

(a)
Susoension of Withdrawal Rights and Mandatorv
Distributions. Notwithstanding anything to the contrary contained in this Trust
Agreement, no Beneficiary shall have a right to withdraw or receive an otherwise
mandatory distribution ofall or any portion ofthe principal ofa Trust, and/or the net
income ofthe Trust, ifon the date a withdrawal is requested or a distribution is provided
under the terms ofany Trust(collectively, the "Distribution Date"), an event of
Beneficiary Misconduct(as hereafter defined) exists. For purposes ofthis Trust,
"Beneficiary Misconduct" means any one or more ofthe following:

(I)

The Beneficiary is incarcerated.

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 (2) The Beneficiary has been convicted ofany crime,
other than misdemeanors or minor traffic violations, within five(5) years ofthe
Distribution Date.

(3)

The Beneficiary is on probation in connection with

any criminal conviction.

(4) The Beneficiary previously has been on probation
and any such period of probation has expired less than two(2) years prior to the
Distribution Date.

(5)

The Trustee determines that within three(3)years

ofthe Distribution Date, the Beneficiary has used or engaged in the purchase and/or sale
ofany illegal drugs or other illegal substances or, in the Trustee's discretion, the Trustee
determines that the Beneficiary has abused the use of alcohol.

Any right to withdraw principal exercisable by a Beneficiary and any right to receive a
distribution ofnet income and/or principal otherwise provided under the terms ofthe
Trust shall be delayed until the Beneficiary Misconduct no longer applies and any period
oftime defining such Beneficiary Misconduct(as described above) has expired. The
determination of whether an event or condition of Beneficiary Misconduct exists shall be
determined in the sole and absolute discretion ofthe Trustee, and shall be final and
binding upon all parties interested in such Trust.
(b)
Optional Reduction or Suspension ofDiscretionarv
Distributions. Any discretionary distributions for a Beneficiary's health, education,
support and maintenance shall be made by the Trustee after considering the Grantor's
desire that a Beneficiary lead a life free ofcrime and substance abuse and the Grantor's
intent that the assets ofthe Trust may not be used to encourage or support a Beneficiary
in a lifestyle including criminal activities, illegal drugs or abuse of alcohol.
Notwithstanding any other provisions in this Trust Agreement to the contraiy, the Trustee
shall withhold any and all distributions for support and maintenance which in the
Trustee's sole and absolute discretion may(1)encourage a lifestyle involving criminal
activities or(2)contribute to a chemical dependence or substance abuse, or otherwise
free funds for such use by the Beneficiary; provided, however,that such distributions for
support may be provided for a hospital or other program ofrecovery or a stay in a
recovery house, plus all costs incident thereto. Nothing in this Trust Agreement shall
prevent the Trustee fi'om making discretionary distributions for the health, education,
support and maintenance ofa Beneficiary and/or a Beneficiary's issue as otherwise
provided in this Trust Agreement to the extent that the Trustee, in its sole and absolute
discretion, determines that the conditions described in this Paragraph 12.11(b), are
satisfied and that the Beneficiary will use such funds for the purposes for which they are
distributed.

Page 37 THIRD AMENDED AND RESTATED
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 (c)

Trustee's Right. But Not the Duty. To Investigate

Beneficiary Misconduct. The Trustee shall not have any duty to investigate any
Beneficiary Misconduct and shall not be liable to anyone for any Beneficiary
Misconduct, If the Trustee suspects or becomes aware that the Beneficiary is involved
with drug and/or alcohol abuse, the Trustee is authorized, but not required, to employ
private investigators and to take such other actions as the Trustee determines appropriate,
at the expense ofthe Trust, to determine whether any Beneficiary Misconduct exists or
whether any distribution would be contrary to the Grantor's desires described herein. The

Trustee shall not incur any liability to persons whose interest may have been affected by
disbursements made or not made in good faith by the Trustee without knowledge ofany
event affecting distribution to a Beneficiary described in this Paragraph.
(d)

Death ofa Beneficiary During Period ofBeneficiary

Misconduct. Iftermination ofthe Trust is postponed pursuant to this Paragraph and the
Beneficiary dies during such postponement, the deceased Beneficiary's Trust shall be
held, administered and distributed in accordance with this Trust Agreement.
(e)

"Interested" Trustee. In the event that one oftwo or more

individual Co-Trustees then serving is an "Interested Trustee"(as that term is defined in
this Paragraph 12.11(e),then the remaining Co-Trustees who are not Interested Trustees
shall exercise the discretionaiy authorities under this Paragraph. In the event that the sole
Trustee, or all ofthe Co-Trustees then serving, are Interested Trustees, then the next
Trustee who is not an Interested Trustee and who is not related or subordinate to such

individual serving Trustee(within the meaning of Section 672 ofthe Internal Revenue
Code)shall exercise the discretionaiy authorities under this Paragraph. For purposes of
this Paragraph, "Interested Trustee"(as to any Beneficiary whose rights as a Beneficiary

could be affected by that Trustee's exercise of discretionary authorities hereunder).means
an individual Trustee who would be entitled to any portion ofthe interest in the Trust
Estate held for that Beneficiary in the event ofthat Beneficiary's death. Further,for
purposes ofthis Paragraph, an individual Trustee will be deemed to "be entitled to any
portion ofthe interest in the Trust Estate held for that Beneficiary in the event ofthat
Beneficiary's death," ifa person who is related or subordinate to such individual Trustee
would be entitled to any portion ofthe interest in that Beneficiary's Trust in the event of
that Beneficiary's death.
(f)

Provisions Regarding Beneficiarv Misconduct Not

Applicable to the Marital Trust or to Retirement Plan Trusts. Notwithstanding any
provision in this Trust Agreement to the contrary, the provisions ofthis Paragraph shall
not apply to the Marital Trust nor to any Retirement Plan Trust created hereunder.

12.12 Principal and Income. Except when the Trust Agreement
specifically provides otherwise, the Trustee shall determine principal and income ofthe
Trust Estate and jfrom time to time apportion and allocate receipts, expenses,and other

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 charges between those accounts according to the provisions ofthe California Uniform
Principal and Income Act("UPAIA")(California Probate Code Sections 16320-16375).
With respect to matters not provided for in the UPAIA,the Trustee shall have the
absolute discretion to determine what is principal or income, and apportion and allocate
any and all receipts and disbursements between those accounts, subject only to fiduciary
standards and limitations of law. The exercise ofthat discretion within the above set

forth limitations shall be conclusive on all persons interested in the Trust Estate.
12.13 Right to Compel Income Distributions from Retirement
Arrangements. Notwithstanding anything to the contrary herein, should the Grantor
designate the Trust or the Marital Trust to receive benefits ("Benefits") from any
qualified pension, profit sharing, or stock bonus plan, qualified annuity plan, or
individual retirement account, as such terms are defined in Sections 401,403 and 408,
respectively, ofthe Intemal Revenue Code(a "Retirement Arrangement"), the following
provisions shall apply:
(a)
To the extent that the value ofthe Benefits are includible in
the gross estate ofthe Grantor under Section 2039 ofthe Internal Revenue Code or
otherwise, and to the extent that the value ofthe Benefits does not exceed the amount
allocated to the Marital Trust, the rights to the Trust's interest in the Benefits shall be
allocated to the Marital Trust prior to the allocation ofany other assets thereto.

(b)
To the maximum extent possible, the Trustee shall not
make any ofthe payments required by the Paragraph titled "Payments Upon the Death of
the Grantor" out ofthe Benefits.

(c)
To the maximum extent possible, the Trust's interest in the
Benefits shall be allocated to that portion ofthe Marital Trust for which the Trustee did
not make the election under Section 2652(a)(3)ofthe Intemal Revenue Code to treat the
assets ofthe Marital Trust as ifthe qualified terminable interest property election had not
been made for purposes ofthe GST tax.
(d)
To the extent that the Benefits are allocated to the Marital
Trust, the Spouse shall have the right, exercisable annually, to compel the trustee,
custodian or other fiduciary ofthe Retirement Arrangement to withdraw therefrom an
amount equal to the income earned on the assets held in the Retirement Arrangement and
to distribute the same to the Marital Trust, for distribution to the Spouse as a portion of
the income ofthe Marital Trust in accordance with Paragraph 6.2. The right to compel a
distribution under this Paragraph 12.13 shall be cumulative and shall not lapse during the
lifetime ofthe Spouse.
(e)

The Trustee is authorized to make or not make distribution

elections to accelerate or defer distribution to the Trust ofthe Benefits from the

Retirement Arrangement, taking into account, to the extent that the Tmstee deems

Page 39 THIRD AMENDED AND RESTATED
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 advisable, the tax consequences ofsuch elections and the liquidity needs ofthe Marital
Trust. In this connection, the Trustee is authorized, but not required, to elect to defer
distribution to the maximum extent permissible under Section 401(a)(9)(B)ofthe
Internal Revenue Code.

(f)
The Trustee shall make reasonable efforts to maintain
records of: (1)the income generated within the Retirement Arrangement;(2)the
allocation ofeach distribution of Benefits from the Retirement Arrangement between
income and principal; and (3)the tracing of distributions from the Marital Trust to the
Spouse with respect thereto.
12.14 Acceptance of Gifts. The Trustee is authorized to accept gifts from
any individual who desires to contribute to the principal ofany ofthe respective Trusts
created hereunder. The acceptance ofany such additional gifts shall be in the sole and
absolute discretion ofthe Trustee.

12.15 Powers Over Securities. With respect to securities, interests in
limited liability companies, partnership interests and similar property held in the Trust,
the Trustee shall have all the rights, powers and privileges ofan owner, including, but not
by way of limitation:

(a)

to vote, give proxies and pay assessments;

(b) to participate in voting trusts and similar agreements,
pooling agreements, foreclosures, reorganizations, consolidations, mergers, liquidations,
sales and leases, and incident to such participation to deposit securities with and transfer
title to any protective or other committee on such terms as the Trustee may deem
advisable;

(c)
to exercise rights under buy-sell, close corporation and S
corporation shareholder agreements,or similar agreements;
(d)

to exercise or sell stock subscription or conversion rights;

(e)
to consent to foreclosures, reorganizations, consolidations,
mergers and liquidations; and

(^
to deposit securities with and transfer title to any protective
or other committee on any terms that the Trustee, in the Trustee's discretion, considers
advisable.

The signature ofthe Trustee, or one oftwo or more acting Co-Trustees, ifapplicable,
shall be sufficient to bind the Trust with respect to any ofthe foregoing actions taken
pursuant to this Paragraph and any third party may rely upon the signature ofone oftwo

Page 40 THIRD AMENDED AND RESTATED
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 or more acting Co-Trustees in connection therewith. Notwithstanding the foregoing, it is
the intention ofthe Grantor that Co-Trustees shall exercise their powers over securities as
a single record holder and under no circumstances shall the vote ofthe Co-Trustees be
split, regardless of whether a specific provision of any rule or law applicable to.such
securities(including the Corporations Code ofthe state in which the entity was formed)
would permitjoint holders ofsuch securities to cast votes other than as a single vote. The
signatures ofall Co-Trustees shall be required to enter into partnership agreements,
limited liability company operating agreements, buy/sell agreements or similar
agreements.
12.16 Transactions With Other Entities. The Trustee is authorized to

purchase assets from or sell assets to the probate estate ofeither the Grantor or the
Spouse, or any other person, firm,trust or other entity. Any such purchase or sale shall
be at the fair market value ofthose assets(as determined by the Trustee in the Trustee's
discretion) and upon such terms and conditions(with or without security) and in such
amounts as the Trustee may deem advisable. The Trustee is authorized to loan funds or
assets belonging to the Trust Estate to the Grantor or the Spouse or both,to the probate
estate ofthe Grantor, to the probate estate ofthe Spouse, to any Beneficiary hereunder, or
to any other person, firm, trust or other entity, upon such terms and in such amounts as
the Trustee may deem advisable; provided, however,that any such loan bears a
reasonable rate ofinterest, but not more than the maximum interest rate allowed under
California law, and provided that any such loan is adequately secured. However, in no
event shall the Trustee make any investment pursuant to the provisions ofthis Paragraph
for less than adequate consideration in money or money's worth or that the Trustee
determines would not be a prudent investment ofthe assets ofthe Trust Estate. Further,
subject to the standards and limitations stated in this Trust Agreement,the Trustee is
specifically authorized to(but is not required to) loan funds or assets belonging to the
Trust Estate for(a)the purchase or construction of a home for a Beneficiary and/or(b)
the commencement or conduct ofa trade or business by a Beneficiary.

12.17 Power to Purchase Insurance. The Trustee is authorized to procure
and carry, at the expense ofthe Trust, insurance ofsuch kind and in such form and
amount as the Trustee deems advisable to protect the Trustee, the Trusts and the Trust
Estate against any hazard, risk ofloss or other potential liability.

12.18 Pavments to or for Minors or Incapacitated Persons. Ifat any time
or from time to time any beneficiary entitled to receive income or principal hereunder
shall be a minor or an incapacitated adult, the Trustee may make the distribution or
expenditure for the beneficiary, in the sole diiscretion ofthe Trustee, in any one or more
ofthe following ways:
(a)

directly to the beneficiary;

Page 41 THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

 (b)

to the guardian, conservator or other fiduciary ofthe person

or estate ofthe beneficiaiy;

(c)
to a Uniform Transfers to Minors Act account, already
existing or created for a minor, in any jurisdiction;

(d) to any person or organization furnishing care, support,
maintenance or education ofthe beneficiary; or
(e)
by itself making expenditures directly for the support,
maintenance, health or education ofthe beneficiary.

The Trustee shall not be required to see to the application ofany funds so paid or applied
and the receipt by such payee shall be full acquittance ofthe Trustee. The decision ofthe
Trustee as to direct payments or application offunds shall be conclusive and binding
upon all parties in interest. The Trustee shall be guided by the foregoing principles in
this Paragraph for any minor beneficiary or an incapacitated adult beneficiary, other than
a child ofthe Grantor.
12.19 Life Insurance and Other Death Benefits. The Trustee shall have

the following powers, duties and discretions with respect to policies oflife insurance:
(a)

The Trustee, without being obligated to do so, may pay

premiums, assessments or other charges with respect to policies held as a part ofdie
Trust Estate, and all other charges upon such policies otherwise required to preserve them
as binding agreements. The Trustee is authorized to borrow money for any Trust
purpose, for the debts ofthe Trust or the Joint debts ofthe Trust and a Beneficiary, upon
terms and conditions that the Trustee may deem to be proper and to obligate the Trust
Estate for repayment; and the Trustee may encumber any life insurance policy held as a
part ofthe Trust Estate (for the obligations ofthe Trust or any Beneficiary), using such
procedure or procedures to consummate the transaction or transactions as the Trustee
may deem advisable.

(b) In the event that the Trustee intends not to pay any
premium, assessment or other charge with respect to any policy held by it, or otherwise
intends to cancel, convert or substantially modify any such policy, it shall first give the
insured, or the fiduciary ofthe estate ofan insured under disability, at least fifteen(15)
days advance written notice ofits intention to take such action.

(c)
Any amounts received by the Trustee with respect to any
policy as a dividend shall be treated as principal.
(d)

Upon the receipt ofproofof death ofany person whose life

is insured for the benefit ofany Trust hereunder, or upon maturity ofany policy payable

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 to a Trustee prior to the death ofthe insured, the Trustee shall collect all sums payable
with respect thereofand shall thereafter hold such sums as principal ofthe respective
Trust, except that any interest paid by the insurer for a period subsequent to maturity
shall be considered as income.

(e) The Trustee may compromise, arbitrate or otherwise adjust
claims upon any policies, and may, but shall not be required to, exercise any settlement
options available under such policies. The giving ofa receipt by the Trustee to an insurer
shall be a full discharge and such insurer is not required to see to the application ofthe
proceeds.

With respect to death benefits payable under any qualified and/or non-qualified employee
benefit plan in which the Grantor is a participant(or an individual retirement account
which the Grantor has established) and under which the Trustee may elect the mode of
payment or make any tax elections, the Trustee shall elect a mode of payment and make
such tax elections which, in the Trustee's discretion, appear to be the most advantageous
option and elections available to this Trust or its then-current income Beneficiaries, in
terms of income tax, estate and inheritance tax, or investment return considerations,
based on the Trustee's evaluation ofthe facts and circumstances relevant to such

considerations as they exist at the time the Trustee makes such election. An election ofa
mode of payment and tax elections made by a Trustee in good faith in the exercise ofthe

discretionary power conferred upon it shall be final and binding upon all persons
whomsoever and shall be a full acquittance and discharge ofthe Trustee, and the Trustee
shall not be liable to any person by reason of its exercise ofsuch discretionary power.
Death benefits paid in lump sum under any such employee benefit plan shall be allocated
to principal unless, in its discretion, the Trustee determines that to do so would result in
adverse income tax consequences to the Trust and the Beneficiaries. Installment
payments shall be allocated to income or principal in the discretion ofthe Trustee. The

giving ofa receipt by the Trustee to an administrator ofsuch a plan shall be a fiill
discharge, and such administrator is not required to see to the application offunds so
paid.
12.20 Banks and Brokerage Accounts and Endorsements. The Trustee is

authorized to maintain existing accounts and safe deposit boxes, and open new accounts
and safe deposit boxes, at banks, savings and loan associations, brokerage houses and
other financial institutions(including with the Trustee and affiliates ofthe Trustee)for
the Trust Estate in such manner that funds may be withdrawn or investment direction
given with respect to those accounts, or those safe deposit boxes may be accessed, upon
the signature of and upon the instruction ofthe Trustee, or one oftwo or more acting
Co-Trustees, ifapplicable. Therefore, one oftwo or more acting Co-Trustees, acting
alone, shall have signature power with respect to any account maintained at a savings and
loan institution, bank or other financial institution, safe deposit box or brokerage account
which then constitutes an asset ofthe Trust Estate. The signature ofthe Trustee, or one

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 oftwo or more acting Co-Trustees, if applicable, shall be sufficient to endorse any check,
payment or other instrument which may be received for the account ofthe Trust, and
such endorsement shall be a sufficient receipt to the person giving that check, payment or
other instrument to the Trust. The Trustee is authorized, in its discretion, to appoint
additional signatories to any accounts and safe deposit boxes maintained or opened at
banks, savings and loan associations, brokerage houses and other financial institutions
(including with the Trustee and affiliates ofthe Trustee)for the Trust Estate in such
manner that fiinds may be withdrawn with respect to such accounts upon the signature of
such additional signatory or signatories. The signature ofsuch additional signatory or
signatories shall be sufficient to endorse any check, payment or other instrument which
may be received for the account ofthe Trust, and such endorsement shall be a sufficient
receipt to the person giving the check, payment or other instrument to the Trust.
12.21 Option to Terminate Shares or Trusts. In the event that:
(a)
the share or separate Trust held for any Beneficiary ofa
Trust created hereunder has, at any time, in Ae opinion ofthe Trustee, a fair market value
ofFifty Thousand Dollars($50,000)or less,

(b)
the aggregate fair market value, in the opinion ofthe
Trustee, ofall Trusts created hereunder and administered by the Trustee at any time is
Two Hundred Fifty Thousand Dollars($250,000)or less, or
(c)
the principal value ofany Trust created hereunder at any
time is less than an amount that can be economically administered in trust,
the Trustee may,in its discretion, but is not required to, terminate that Trust or those
Trusts and, regardless ofthe age ofthe Beneficiaiy, distribute the principal and any
accrued or undistributed net income thereon to the Beneficiary, or to its guardian,
conservator, custodian under the California Uniform Transfers to Minors Act or other
similar statute, or other fiduciary.
12.22 Power to Combine and Divide Trusts. Except as otherwise
provided to the contrary in this Trust Agreement,the Trustee may, at any time and from
time to time, and without court approval, for tax and/or administrative reasons:
(a)
combine any Trust created under this Trust Agreement for
any Beneficiary with any other Trust otherwise created for that Beneficiary, whether
created under this Trust Agreement or otherwise, the terms of which Trusts are
substantially identical and the Trustees of which Trusts are identical, provided that the
Trustee, in the Trustee's reasonable discretion, determines that administration as a single
Trust will be consistent with the intent ofthe persons who established the Trusts and will
facilitate Trust administration without defeating or impairing the beneficial interests of
current or future beneficiaries ofthis Trust, and provided further that the Marital Trust or

Page 44 THIRD AMENDED AND RESTATED
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419843Svl

 any subtrust thereof may not be combined with any trust other than a subtrust ofthe
Marital Trust prior to the death of the Spouse; and
(b)
divide any Trust hereunder into two or more separate
Trusts, each of which shall have the same provisions as the original Trust jfrom which it
was established, and references in this Trust Agreement to the original Trust shall refer to
the separate Trusts derived from it.
If a Trust is divided into separate Trusts, the Trustee may, at any time prior to a
combination ofsuch Trusts, take any and all actions consistent with such Trusts being
separate entities including, without limitation, make different tax elections with respect to
each separate Trust, expend principal and exercise any other discretionary powers
differently with respect to each separate Trust. The donee or other holder ofany power
ofappointment with respect to a Trust so divided may exercise such power differently
with respect to the separate Trusts created. In addition, if property is directed to be added
to any Trust hereunder,the Trustee may:
(1)
hold such additional property as one or more
separate Trusts having terms identical to the terms ofthe Trust to which it was to be
added; and

(2)
allocate such additional property on a non-pro rata
basis among the several Trusts, if any, into which the Trust to which such additional
property is required to be added was previously divided (including an allocation ofall
such additional property to one ofsuch Trusts),

No Trustee shall be liable for any good faith exercise ofa power described in or
otherwise authorized by this Paragraph and, in the event any such good faith exercise of
such a power results in a detriment to one or more beneficiaries, the Trustee shall be
exonerated and otherwise held harmless with respect to any such detriment
12.23 Power to Withhold Distribution. The Trustee is authorized to

withhold from distribution, at the time for distribution ofany property ofthe Trust Estate,
without the payment ofinterest, all or any part ofthe property, as long as the Trustee
shall determine in its discretion that the property may be subject to conflicting claims,tax
deficiencies or liabilities, contingent or otherwise,
12.24 Tax Elections. The Trustee shall have the power in the Trustee's
absolute discretion to take any action and to make any election to minimize the tax
liabilities ofthis Trust and/or one or more ofits beneficiaries, regardless ofthe resulting
effect on the Trust, the other beneficiaries or any other person interested in this Trust, to
allocate the benefits among the various beneficiaries, and to make adjustments in the
rights ofany beneficiaries or between the income and principal accounts, to compensate
for the consequences ofany tax election or any investment or administrative decision that

Page 45 THIRD AMENDED AND RESTATED
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 the Trustee believes has had the effect ofdirectly or indirectly preferring one beneficiary
or group of beneficiaries over others. In allocating assets hereunder, the Trustee may
take into consideration the basis ofsuch assets to the extent appropriate, as determined by
the Trustee in its sole and absolute discretion. The Trustee shall cooperate with the
executor ofthe Will ofthe Grantor or such other person who can make the election in the
absence of an executor in electing to(a)treat all or a portion ofthe Marital Trust as
Qualified Terminable Interest Property (as that term is defined in Section 2056 ofthe
Internal Revenue Code)and (b)if applicable, to treat the Grantor as the transferor of all
or a portion ofthe Marital Trust for purposes ofthe GST tax (pursuant to Section
2652(a)(3)ofthe Internal Revenue Code). The Trustee shall also have the power to file
any income tax returns as may be required on behalfofthe Grantor, whether a separate
income tax return on behalfofthe Grantor or ajoint income tax return on behalfofthe
Grantor and the Spouse, and to pay all or any portion ofthe taxes due with respect to
such returns. Ifany additional assessment shall be made on account ofany income tax
return filed by or on behalfof either the Grantor or Spouse, whether separately or Jointly,
the Trustee is authorized to pay the additional assessment. The exercise ofauthority
hereunder by the Trustee shall be conclusive and binding on all persons.
12.25 Powers in Event ofDisputes. The Trustee shall have the power to
commence or defend such litigation with respect to the Trust or any property ofthe Trust
Estate as the Trustee may deem advisable, at the expense ofthe Trust, and to compromise
or otherwise adjust any claims or litigation against or in favor ofthe Trust. The Trustee's

powers under this Paragraph shall apply during the term ofthe Trust and after distribution
ofTrust assets. However,the Trustee shall have no obligations or duties with respect to
any litigation or claims occurring after distribution ofTrust assets, unless the Trustee is
adequately indemnified by the distributee for any loss in connection with such matters.
12.26 Subdivision of Real Pronertv. The Trustee is authorized and

empowered:

(a)
to subdivide and resubdivide Trust real property and sign
applications, maps and other documents incidental thereto;

(b)

to dedicate Trust real property for public purposes, with or

without consideration;

(c)
to grant and impose upon Trust real property conditions,
covenants, easements, restrictions, rights of way and other servitudes;
(d)

to borrow against Trust real property; and

(e)
to do such other acts as may appear to the Trustee advisable
in connection with the exercise ofany ofthe foregoing powers.

Page 46 THIRD AMENDED AND RESTATED
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 12.27 Purchase at Foreclosure. The Trustee is authorized and

empowered, as to any property(real, personal or mixed) in which the Trust has any
interest, that is sold at foreclosure,judicial or non-Judicial, to make bids upon or purchase
the same or, as to such property, to accept a deed in lieu offoreclosure as full or complete
satisfaction of the debt which is secured. The Trustee shall allocate income and expense
attributable to such property or the proceeds of its sale as ifsuch property were being
initially acquired as a Trust investment.
12.28 Fiduciary Related Party Transactions. The Trustee is authorized to

act on behalf ofthe Trust notwithstanding the self interest ofthe Trustee, including the

power to lease, mortgage or sell any property to or lease or purchase any property from
the Trustee; to determine the amount ofand to receive compensation for services as
Trustee or in any other capacity; in the case of a corporate Trustee, to borrow from,
deposit money or otherwise deal with its own banking department or that of an affiliate,
to invest in its own stock or stock ofany ofits affiliates, or to invest in its own common
trust fund; and to be interested in any investment, corporation, limited liability company,
partnership, other unincorporated business,farming or mining operation, real estate
operation or other venture in which the Trust is interested. No person shall be precluded
from acting as Trustee hereunder or being compensated therefor by reason of his
employment in any capacity by any corporation, limited liability company or partnership
or office in any capacity with any corporation, limited liability company or partnership,
the stock of which corporation or an interest in which limited liability company or
partnership constitutes a part or all ofthe assets ofthe Trust, nor shall the Trustee be so
precluded from accepting such employment or appointment by any such corporation,
limited liability company or partnership. The Trustee is specifically authorized and
empowered to exercise all ofthe duties and powers entrusted to such Trustee under the
terms ofthis Trust Agreement despite any duality offiduciary obligations arising by
reason ofsuch person's service as the Trustee and as an officer, director, partner or
employee ofany corporation, limited liability company or partnership in which the Trust
may be interested. No Trustee hereunder shall be liable for any loss or diminution in the
Trust resulting from any action such Trustee may take or refrain from taking concerning
the foregoing, except for such Trustee's own gross negligence or willful misconduct wifri
regard thereto.
12.29 Power to Commence. Retain and Manage Closelv Held Business.

The Trustee is expressly authorized to commence or retain, regardless oflack of
diversification, as an investment ofany Trust hereunder, securities ofor any other
ownership interest in any closely held business, whether a sole proprietorship,
corporation, limited liability company,joint venture or partnership (including stocks,
bonds, debentures and any other form ofsecurities representing either or both a
proprietary interest in or obligation ofsaid corporation or other entity), and any other
business entity which is a successor to, subsidiary of, or affiliated with, said corporation
or other entity, which is now or hereafter assigned, devised, bequeathed, transferred or

Page 47 THIRD AMENDED AND RESTATED
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 delivered to the Trustee (all of which, if more than one, are hereinafter referred to as "the
Company"). Pending sale or final distribution ofsaid securities or ownership interest or
liquidation ofthe Company, the Trustee shall have the following authorities and
discretions, in addition to any other grant ofauthority and discretion given elsewhere in
this Trust Agreement:
(a)

to participate in the management ofthe Company;

(b)

to supervise, in any manner,the conduct ofthe Company's

business;

(c)
to extend credit to the Company from any Trustee,
including the banking department ofa corporate Trustee, if one is acting, without in any
way increasing, limiting or otherwise affecting its duties, responsibilities and liabilities as
Trustee;

(d)
to increase the investment ofany Trust in the Company,
either or both by way ofsecured or unsecured loans to the Company, by the purchase of
equity from other equity holders ofthe Company,expressly including equity owned by a
Beneficiary, or by subscription to additional equity, either or both common or preferred
stock, partnership interests and/or limited liability company membership interests, or by
pledging assets for the debts ofthe Company, whether incurred before or after the death
ofthe Grantor;

(e)
to organize a corporation, a partnership or limited liability
company under the laws ofany state and to transfer to it all or any part ofthe Company
or other property held in the Trust; and

(f)
to retain in the Company such amount of its net earnings as
the Trustee may deem advisable in conformity wi& responsible business practice.
The Trustee may exercise such authority to such extent and in such manner as the
Trustee, from time to time, deems necessary or advisable to protect the investment ofany
Trust herein and to contribute to the best interest and welfare ofthe beneficiaries thereof.

The Grantor expects the Trustee to exercise ordinary business
judgment in determining how long such securities or ownership interest shall be retained
as an investment and in deciding upon such action as may be taken in its supervision of
the management ofthe Company during the period ofsuch retention and the readjustment
ofthe total investment therein, it being the intention ofthe Grantor to give to the Trustee
every power and discretion it may need or require to provide proper management and
supervision ofthe Company until such time as the Trustee, in its sole judgment, shall
deem it to be to the best advantage ofa Trust, and the beneficiaries thereof, to sell or
otherwise dispose ofsuch securities or ownership interest; and the Trustee shall not be

Page 48 THIRD AMENDED AND RESTATED
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419843Svt

 liable for any loss that may result from the honest exercise of any such power or
discretion granted in the Trust Agreement, and shall be indemnified against any such loss
from the assets ofany Trust holding securities ofor any other ownership interest in the
Company. The Grantor realizes that the Grantor is exposing any Trust to the risks
inherent in all business operations, but it is the beliefofthe Grantor that the possibility of
preserving the capital and income values which the Grantor believes the securities to
contain justifies such risk. To the extent that the Trustee may render service to the
Company,the Trustee is expressly authorized to take such steps as may be practicable to
charge its fees for such service to the Company rather than to a Trust.

Nothing contained herein shall be construed to prevent any
individual Trustee from being employed by the Company at a salary commensurate with
the value of his or her service, or to prevent him or her from becoming a purchaser ofany
ofsuch securities or other ownership interest either from the Trustee or from any other
source.

The foregoing powers shall be deemed to be and shall be exercised

as fiduciary powers. They shall not disqualify the possessor from holding office in the
Company, accepting remuneration from it, voting any stock in favor ofhimselfor herself
as director or officer, or purchasing or selling stock ofthe Company.
12.30 Power Regarding S Corporations. The Trustee shall have the

power to make any elections or decisions the Trustee deems appropriate with respect to
any stock in an S corporation (as defined in Section 1361(a)ofthe Internal Revenue
Code)held or acquired by the Trust.
12.31 Intellectual Propertv Rights and Powers.

(a)
The Trustee shall have full power to collect royalties and
receipts ofany kind or nature that are or may become due to any Trust hereunder,
including, without limitation, royalties and receipts with respect to the sale, publication,
licensing, production or other disposition or utilization ofcreative works, properties,
copyrights or personal rights described in Section 3344 ofthe California Civil Code; to
enter into agreements with respect to the sale, publication, licensing, production or other
disposition or utilization ofsuch creative works, properties, copyrights and rights; to
retain any interests included under this Paragraph for so long a period oftime as the
Trustee may deem proper, even though there may be a loss ofincome or principal
resulting from such retention; to enter into transactions affecting such interests for a
contingent share of profits as opposed to a sale ofinterests for cash or a guaranteed return
(e.g.. a sale of motion picture rights based on a percentage ofprofits ofthe picture); to

deal, in any manner, which the Trustee, in the Trustee's discretion, deems proper, with
respect to any creative works, properties, copyrights, published and unpublished works
(complete or incomplete) and personal rights included in the Trust, including, without

Page 49 THIRD AMENDED AND RESTATED
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419843SV1

 limitation, the power and authority to edit and to publish or cause to be published such
works; to employ a consultant to advise the Trustee with respect to any ofsuch matter; to
employ an agent or representative to act on behalfofthe Trustee with respect to such
matters; and to pay from the Trust the customary fees and commissions of any editor,
agent, representative or literary consultant. The exercise or non-exercise ofthe powers
and discretions under this Paragraph shall be in the sole and absolute discretion ofthe
Trustee, without liability or responsibility to the Trust, the beneficiaries thereunder,
beneficiaries under the Grantor's Will or to any other person or entity for the
consequences ofexercise or non-exercise ofsuch powers and discretions.
(b)
The Grantor hereby transfers to the Trust all ofthe
Grantor's right, title and interest in and to the Grantor's name,sobriquet, voice, signature,
photograph, actual or simulated likeness, image and other personal identification, any and
all trademarks, trade names, trade dress, service marks and other personal identifiers, all
applications and registrations therefor and all goodwill symbolized thereby, all rights of
publicity, all copyrights, copyright registrations and rights to renew,extend, cause
reversion ofor to terminate any grant ofany such copyright, and all rights under or
arising out ofany ofthe foregoing including, but not limited to, the right to recover for
infringement ofany ofthe foregoing occurring prior to, pending as ofthe date hereofor
occurring at any time or times hereafter, regardless ofthe form ofownership, and as any
such property or right is now known or hereafter devised, created or discovered and,
whether or not any such property or right is existing as ofthe date hereofor hereafter is
devised, created or discovered.

12.32 Power Regarding Names of Trusts. The Trustee shall have the
power, in the Trustee's sole and absolute discretion, to name,rename or change the name
ofthe Trust or any Trust created hereunder.
12.33 Power to Transfer Trust to or from Another Jurisdiction. The

Trustee shall have the power to remove any and all ofthe Trust Estate ofany Trust
created hereunder to or from any state ofthe United States, the District ofColumbia or
any foreign jurisdiction. The Trustee shall have the power, from time to time, to change
the jurisdiction ofthis Trust and, in such event, the laws and courts ofsuch other
jurisdiction shall govern the administration ofthe Trust, unless and until the Trustee
changes jurisdiction again.

12.34 Power to Initiate and Defend Litigation: Power to Compromise
Claims.

(a)

The Trustee may,in the Trustee's discretion, initiate or

defend, at the expense ofthe Trust, any litigation relating to the Trust or any property of
the Trust Estate that the Trustee considers advisable. The Trustee's powers under this
Paragraph shall apply during the term ofthe Trust and after distribution ofTrust assets.

Page 50 THIRD AMENDED AND RESTATED
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 The Trustee shall have no duties, however, regarding any litigation or claims occurring
after distribution ofTrust assets, unless the Trustee is adequately indemnified by the
distributees for any loss occasioned by exercise ofthese powers.
(b)
The Trustee may,in the Trustee's discretion, compromise,
submit to arbitration, abandon, or otherwise adjust any claims or litigation against or in
favor ofthe Trust. The Trustee's decision in this regard shall be conclusive. The
Trustee's powers under this Paragraph shall apply during the term ofthe Trust and after
distribution ofTrust assets. The Trustee shall have no duties, however, regarding any
litigation or claims occurring after distribution ofTrust assets, unless the Trustee is
adequately indemnified by the distributees for any loss occasioned by exercise ofthese
powers.

12.35 Powers in Connection with Government Agencies. The Trustee is

authorized to make applications for, receive and administer any ofthe following benefits,
if applicable: Medi-Cal, Social Security, Medicare, Medicaid, Supplemental Security
Income,In-Home Support Services, and other govemmental resources and community
support services available to the elderly; i.e. California Department on Aging, Federal
Older Americans Act, Nursing Home Ombudsman,"Senior Day Care" programs, and
senior centers. The Trustee is further authorized to explore and implement Medi-Cal
planning strategies and options and to plan and accomplish asset preservation in the event
the Grantor or Spouse needs long-term health and nursing care. Such planning shall
include, but is not necessarily limited to, the power and authority to:
(a)
make home improvements and additions to the family
residence ofthe Grantor or Spouse;

(b)
pay off partly or in full the encumbrance, if any, on the
family residence ofthe Grantor or Spouse;
(c)

purchase a family residence, ifthe Grantor or Spouse does

(d)

purchase a more expensive family residence;

(e)

give the family residence to the Spouse if it is the Grantor

not own one;

who needs long-term medical, health or nursing care under the Welfare & Institutions
Code; and

(Q
obtain current information about Medi-Cal gifting rules and
asset preservation rules Ijefore making any gifts or transferring assets from the Trust.

Page 51 THIRD AMENDED AND RESTATED
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 12.36 Environmental Matters. In addition to all other powers, rights and
privileges conferred on the Trustee under this Trust Agreement, the Trustee shall also
have the following rights, powers and privileges with respect to environmental matters:
(a)

Inspection ofProperty and Records Prior to Acceptance.

(1) Prior to acceptance ofthis Trust by any proposed or
designated Trustee(and prior to acceptance ofany asset by any proposed, designated or
acting Trustee), such Trustee or proposed or designated Trustee shall have the right to
take the following actions at the expense ofthe Trust Estate:

(A) to enter, inspect and take samples for
laboratory analysis from any existing or proposed Trust asset for the purpose of
determining the existence, location, nature and magnitude ofany past or present release
or threatened release ofany hazardous substance(as defined under any applicable
federal, state or local environmental law or regulation) into, onto, beneath or from the
asset; and

(B)

to review records ofthe currently acting

Trustee or ofthe Grantor(or ofany partnership, limited liability company or corporation
in which either the Trust or the Grantor holds an interest) for the purpose ofdetermining
whether the asset is in compliance with all federal, state or local environmental laws and
regulations, including those records relating to permits, licenses, notices, reporting
requirements and governmental monitoring of hazardous waste.
(2) The right ofthe Trustee or proposed or designated
Trustee to enter and inspect assets and records ofa partnership, limited liability company
or corporation under this Paragraph is equivalent to the right under state law ofa partner,
member or shareholder to inspect assets and records under similar circumstances.
(3)
Acts performed by a proposed or designated Trustee
under this Paragraph shall not constitute acceptance ofthe Trust.

(4) Ifan asset ofthe Trust is discovered upon
environmental audit by any proposed or designated Trustee to be contaminated with
hazardous waste or otherwise not in compliance with environmental law or regulation,
the Trustee may decline to act as Trustee solely as to such asset, and accept the
Trusteeship as to all other assets ofthe Trust. A court ofcompetentjurisdiction shall
appoint a receiver or Special Trustee to hold and manage the rejected asset under the
preceding sentence, pending its final disposition. Any currently acting Trustee shall have
the right to reject any asset proposed to be transferred to the Trustee.
(b)
Termination, Bifurcation or Modification ofthe Trust Due
to Environmental Liability.

Page 52 THIRD AMENDED AND RESTATED
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 (1)

Ifthe Trust Estate holds one or more assets, the

nature, condition or operation of which is an actual or threatened violation ofany federal,
state or local environmental law or regulation, the Trustee may take one or more ofthe
following actions, if the Trustee, in its discretion, determines that such action is in the
best interests ofthe Trust and its beneficiaries:

(A) modification ofthe Trust provisions,
granting the Trustee such additional powers as are required to protect the Trust and its
beneficiaries fi-om liability or damage relating to actual or threatened violation of any
federal, state or local environmental law or regulation;
(B)

bifurcation ofthe Trust; or

(C) appointment ofa Special Trustee to
administer any Trust property or business which fails to comply with any federal, state or
local environmental law or regulation.

(2) With court approval, the Trustee may terminate the
Trust or partially or totally distribute the Trust Estate to its Beneficiaries.
(3)

It is the intent ofthe Grantor that the Trustee shall

have the widest discretion in identification ofand response to administration problems
connected to potential environmental liability to the Trust Estate and the Trustee, in order
to protect the interests ofthe Trust, the Trustee and the beneficiaries ofthe Trust.

(c)
The Trustee shall have the power to take, on behalfofthe
Trust, any action necessary to prevent, abate or otherwise remedy any actual or
threatened violation ofany federal, state or local environmental law or regulation,
relating to any asset, which is or has been held by the Trustee as part ofthe Trust Estate.
(d)
Environmental Expenses.

Indemnification ofthe Trustee fi-om Trust Assets for

(1)

The Trustee shall be indemnified and reimbursed

fi-om the Trust Estate for any liabilities, loss, damages, costs or expenses arising out ofor
relating to federal, state or local environmental laws or regulations, as amended from
time to time (hereinafter "Environmental Expenses").
(2)

Environmental Expenses shall include, but shall not

be limited to:

(A) costs ofinvestigation, analysis, removal,
remediation, response or other cleanup costs ofcontamination by hazardous substances,
as defined under any applicable federal, state or local environmental law or regulation;

Page 53 THIRD AMENDED AND RESTATED
THOMAS EARL PETTY LIVING TRUST

 (B) legal fees and costs arising from any
judicial, investigative or administrative proceeding relating to any federal, state or local
environmental law or regulation;

(C) civil or criminal fees, fines or penalties,
incurred under any federal, state or local environmental law or regulation; and
(D) fees and costs payable to environmental
consultants, engineers or other experts, including legal counsel, relating to any federal,
state or local environmental law or regulation.
(3)
The right to indemnification or reimbursement shall
extend to Environmental Expenses relating to:
(A) any real property or business enterprise
which is or has been at any time owned or operated by the Trustee as part ofthe Trust
Estate; and

(B) any real property or business enterprise
which is or has been at any time owned or operated by a corporation, partnership or
association in which the Trustee holds or has held at any time an ownership or
management interest as part ofthe Trust Estate.
(4)
The Trustee shall have the right to reimbursement
for incurred Environmental Expenses without the prior requirement of expenditure ofits
own funds in payment ofsuch Environmental Expenses, and shall have the right to pay
Environmental Expenses directly from Trust assets.
(5)
The right ofindemnification or reimbursement shall
apply to all Environmental Expenses, except those resulting from the Trustee's intentional
wrongdoing, bad faith or reckless disregard offiduciary obligation.
(6)
Ifthe assets ofthe Trust Estate are insufficient, or
there is insufficient liquidity in the Trust Estate to satisfy the obligation of
indemnification or reimbursement ofthe Trustee from the Trust Estate for Environmental

Expenses, the Trustee shall have the right to request in writing indemnification or
reimbursement for such Environmental Expenses directly from the Grantor and the
beneficiaries.

12.37 Discretion of Trustee. Unless specifically limited, all discretions
conferred upon the Trustee shall be absolute, and their exercise conclusive on all persons
interested in the Trusts. The enumeration ofcertain powers ofthe Trustee shall not limit
its general powers, the Trustee being vested with and having all the rights, powers and
privileges with relation to the Trust Estate as could be exercised and executed by an

Page 54 THIRD AMENDED AND RESTATED
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 individual holding and owning the same property in absolute and unconditional
ownership. All powers ofthe Trustee shall be exercised in a fiduciary capacity. The
Trustee shall not be liable to the Trust or to any beneficiaries as a result ofany losses,
costs or damages ofany kind, type or nature suffered or incurred by the Trust or by any
beneficiary resulting from the Trustee's reasonable actions taken in good faith, the actual
result ofwhich could not have been reasonably anticipated.
12.38 Power to Disclaim. Restrict or Enlarsfe Powers ofTrustee. The

Trustee is authorized to disclaim, release or restrict the scope of any power that the
Trustee may hold in connection with the Trusts created by this Trust Agreement, whether
that power is expressly granted in the Trust Agreement or implied by law. The Trustee
shall exercise this power in a written instrument executed by the Trustee specifying the
power to be disclaimed, released or restricted and the nature ofthe restriction. In the
event the Trustee may deem it advisable to have its authority and powers enlarged or
extended for any reason or purpose, the Trustee is authorized to file an appropriate
petition therefor in a court ofcompetentjurisdiction, and the Trustee is authorized to
comply with any order made in response to any such petition.

12.39 Disclosure to Third Parties. Any transfer agent or other person
dealing with the Trust(hereinafter referred to as "third party")shall be entitled to rely
upon a copy ofthose portions ofthis Article titled "POWERS OF TRUSTEE" and any
amendments thereto setting forth the powers ofthe Trustee, which partial copy shall be
certified as a true copy ofthose portions then in effect by the Trustee then acting. The
third party shall incur no liability to the Trust or any Beneficiary hereunder for acting
upon an order or request ofthe Trustee made pursuant to the terms hereof as set forth in
the partial copy, and shall not be required to see to the disposition ofany proceeds for the
faithful discharge ofthe Trustee's duties hereunder. In no event shall any third party have
access to a copy ofthe portion hereof setting forth the distribution ofincome and
principal, except as may be determined in the absolute discretion ofthe Trustee.
Alternatively, any such third party may rely upon a Certification ofTrust by the Trustee
given pursuant to Section 18100.5 ofAe Califomia Probate Code or any similar
provision.
ARTICLE 13
TRUST ADMINISTRATION:

13.1

Trust Administrative Provisions Set Forth in This Article. The

provisions set forth in this Article shall apply to the administration of any and all Trusts
created pursuant to the provisions ofthis Trust Agreement.

Page 55 THIRD AMENDED AND RESTATED
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 13.2 Bond of Trustee. No bond shall be required ofany Trustee ofany
Trust created pursuant to the provisions ofthis Trust Agreement,regardless ofresidence
and whether serving jointly or alone.

13.3

Compensation ofTrustee. The Grantor and Spouse shall not

receive any compensation for serving as Trustee pursuant to this Trust Agreement. In the
event any other individual shall serve as Trustee or Co-Trustee, that individual serving as
Trustee or Co-Trustee shall receive reasonable compensation for his or her services. The
compensation for a Corporate Trustee's services shall be in accordance with the

Corporate Trustee's published fee schedule from time to time existing for the
administration ofsimilar trusts in the state ofCalifornia.

13.4 Profits and Losses Charged to Trust. The profits and losses arising
from any activity ofthe Trustee as Trustee ofany Trust created hereunder shall
respectively inure to the benefit of or be charged against the respective Trust and not the
Trustee.

13.5 Accrued and Undistributed Income. Except as may otherwise be
specifically provided herein, upon the death ofany Beneficiary for whom a Trust is held,
any accrued or undistributed net income ofthat Beneficiary's Trust shall be held and
accounted for, or distributed, in the same maimer as if it had been accrued or received

after the death ofthat Beneficiary. This Paragraph shall not be applicable to the Marital
Trust or to any income derived by any Trust hereunder from an S Corporation (as defined
in the Internal Revenue Code).
13.6

Pavments Upon the Death ofthe Grantor or Spouse. Upon the

death ofeither the Grantor or Spouse,the Trustee shall make the following payments:
(a)

the specific monetary and other bequests contained in the

Will ofthe Grantor;

(b)
the charitable pledges ofthe Grantor, whether or not such
charitable pledges are legally enforceable against the Grantor;
(c)

the expenses of burial and last illness ofthe Grantor;

(d) any income, state, county and other taxes attributable to or
chargeable against the Grantor;

(e)

all Death Taxes(as defined in Paragraph 13.8) attributable

to

(1)

properties subject to probate administration.

Page 56 THIRD AMENDED AND RESTATED
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4198435V1

 (2)
properties included in the Trust Estate and
occasioned or payable by reason of the death ofthe Grantor,

(3)

insurance proceeds included in the Grantor's taxable

(4)

retirement benefits included in the Grantor's taxable

estate,

estate, or

(5) any other property which passed through a pay on
death provision and which is included in the Grantor's taxable estate,

arising with respect to transfers ofproperty, whether outright or in trust, made by or on
behalfo^ or which are otherwise attributable to, the Grantor, whether during the life of
the Grantor or subsequently, and all expenses and charges incidental to the determination
thereof;

(1^

any approved claims against the estate ofthe Grantor; and

(g) any expenses of probate, administration and other charges
against the probate estate ofthe Grantor, including attorneys' fees and expenses
incidental thereto.

13.7 Allocation ofPavments to Trusts. Except as otherwise provided in
the Paragraphs titled "Death Taxes; Apportionment" and "Powers and Duties Regarding
Payment ofGST Tax Liability" or elsewhere in this Trust Agreement, payments pursuant
to the Paragraph titled "Payments Upon the Death ofthe Grantor or Spouse" shall be
charged to and paid from that Trust on account of which the obligation is incurred or to
which the obligation is properly attributable without any proration or charge therefor
against any specifically designated Beneficiary thereof provided, however, that this
direction shall not apply ifthe result ofthe application ofthis instruction would be an
increase in state or federal death taxes, which could be avoided by a different allocation
ofsuch charges; provided further that such alternative allocation ofcharges is, in the
Trustee's sole and absolute discretion, reasonably feir to all Beneficiaries ofany Trust
created hereunder. By way ofillustration, in the event an election is made to qualify the
Marital Trust for the federal estate tax marital deduction upon the death ofthe Grantor,
no amount ofestate tax occasioned or payable by reason ofthe death ofthe Grantor
would be incurred with respect to or attributable to the Marital Trust; accordingly, no
portion ofsuch estate tax would be paid from,allocated to or otherwise charged against
the Marital Trust.

Ifa payment cannot be properly charged or attributed to a specific
Trust, the Trustee shall allocate such payment to one or more Trusts hereunder in any
reasonable manner determined in the Trustee's sole and absolute discretion, subject to the

Pages? THIRD AMENDED AND RESTATED
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4198435V1

 limitations expressly provided in this Trust Agreement including, without limitation, the
provisions ofthe Marital Trust.

In general, any payment required to be made pursuant to the
Paragraph titled "Payments Upon the Death ofthe Grantor or Spouse" or otherwise by
reason ofthe death of, or an assignment by, the Grantor or Spouse, shall be charged, first,
entirely, or to the extent possible, to a Nonexempt Trust(as defined in the Article titled
"Provisions Regarding GST Tax"). Moreover, if by reason ofthe death ofthe Spouse
any estate tax (including applicable interest and penalties, if any) is attributable to (or
would subsequently be recoverable from)an Exempt Trust created under the Marital
Trust of which the Grantor is considered the transferor for GST tax purposes, any

payments pursuant to the Paragraph titled "Payments Upon the Dea^ ofthe Grantor or
Spouse" shall be charged instead, to the extent possible, to the Nonexempt Trust created
under the Marital Trust of which the Grantor is the transferor for GST tax purposes, if
any, provided, however,that this direction shall not apply ifthe result ofthe application
ofthis instruction would be an increase in state or federal death taxes, which could be
avoided by a different allocation ofsuch charges; provided further that such alternative
allocation ofcharges is, in the Trustee's sole and absolute discretion, reasonably fair to all
Beneficiaries ofany Trust created hereunder.
No payment of a community property liability hereunder shall

exceed the Grantor's one-half(1/2)share ofsuch community property liability. Further,
for the purposes of making any ofthe payments mentioned in the Paragraph titled
"Payments Upon the Death ofthe Grantor or Spouse," the Trustee shall not use(a)any
proceeds ofany insurance policies on the life ofthe Grantor, unless such insurance
policies are includible in the estate ofthe Grantor, or(b)any distribution from a qualified
retirement plan or individual retirement account with respect to the Grantor,for the
payment ofany taxes or expenses which shall be paid in accordance with the provisions
ofthis Paragraph.
13.8

Death Taxes: Apportionment. The Death Taxes attributable to the

Grantor shall be determined and apportioned according to the following principles:
(a)

Death Taxes Defined. "Death Taxes" shall mean all estate,

inheritance, succession or transfer taxes and any income or similar taxes on appreciation
resulting from death, including interest, penalties, and any excise or supplemental taxes,
imposed by the laws ofany domestic or foreign taxing authority at the time ofor by
reason oftiie Grantor's death.

(b)
Apportionment. Except as otherwise expressly provided in
this Trust, including the provisions ofthis Paragraph 13.8, or in the Grantor's Will, it is
the Grantor's intent that each recipient of property that is includible in the Grantor's
taxable estate(whether passing under the provisions ofthis Trust or otherwise) shall pay

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 the Death Taxes(other than GST taxes) attributable to the property such recipient
receives in accordance with the principles ofSection 20110 ofthe California Probate
Code and related sections, or any successor statutes or amendments thereto. The benefit

ofany credit, deduction, exclusion, exemption, or similar benefit relating to specific
property, including but not limited to the marital deduction and charitable deduction,
shall inure to the benefit ofthe recipient ofthe specific property.
(c)

Death Taxes Attributable to Qualified Terminable Interest

Property. Death Taxes(other than GST taxes) attributable to qualified terminable interest
property includible in the Grantor's taxable estate under Section 2044 ofthe Internal

Revenue Code and/or Section 2519 ofthe Intemal Revenue Code, shall be apportioned,
to the extent possible, to the qualified terminable interest property with the highest
inclusion ratio, to the extent that doing so will not constitute a constructive addition with
respect to any qualified terminable interest property with a lower inclusion ratio.
(d)

Death Taxes Attributable to General Power of

Appointment. Death Taxes(other than GST taxes)attributable to property subject to a
general power ofappointment granted hereunder, shall be charged against such property,
unless the donee, by specific reference to the power, directs otherwise.
(e)

Payment ofGST Taxes. All GST taxes attributable to a

direct skip occasioned by the Grantor's death and with respect to which the Grantor is the
transferor shall be paid out of, and charged against, the property constituting the transfer
as provided in Sections 2603(a)(3) and 2603(b)ofthe Intemal Revenue Code. All GST
taxes attributable to a taxable distribution occurring with respect to any Tmst shall be
paid by the transferee thereof as provided in Sections 2603(a)(1)and 2603(b)ofthe
Intemal Revenue Code,and all GST taxes attributable to a taxable termination occurring
with respect to any Tmst shall be paid by the Tmstee and charged against the property
constituting the transfer as provided in Sections 2603(a)(2)and 2603(b)ofthe Intemal
Revenue Code.

(^
Exoneration of Specific Gifts. Unless specifically provided
to the contrary in the Grantor's Will or under this Tmst Agreement, specific bequests,
devises, or gifts made by the Grantor under the Grantor's Will or under this Tmst
Agreement and any interest in a college savings plan established under Section 529 ofthe
Intemal Revenue Code that is includible in the Grantor's taxable estate shall not be

subject to apportiomnent, and the Death Taxes attributable to such property shall be paid
out ofthe remaining Tmst Estate without apportionment upon the death ofthe Grantor.
(g) Prior Taxable Gifts. The Death Tax attributable to any gift
taxes includible in the Grantor's Gross Estate by Section 2035(b)ofthe Intemal Revenue
Code shall not be paid by the recipient of property that produced the gift tax includible by

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 Section 2035(b)ofthe Internal Revenue Code. Ail taxable gifts made by the Grantor
during the Grantor's lifetime shall not be subject to apportionment.
(h)

Income in Respect of Decedent. The income or similar tax

attributable to appreciation by reason ofthe property not receiving a step-up in basis on
the death ofthe Grantor shall be paid by the recipient ofthe property subject to the
income or similar tax.

(i)

Interest And Set Offs. In the discretion ofthe Trustee',

Death Taxes attributable to property not passing under this Trust Agreement may be paid
out ofthis Trust prior to recovering the attributable Death Tax from the recipient ofthat
property.

(1) Attributable Death Tax that has not been paid by the
recipient before the Trustee pays Death Taxes or that is not yet due, because the Trustee
made a valid deferral election under Sections 6161,6163 or 6166 ofthe Internal Revenue

Code, shall bear interest at a rate equal to that imposed from time to time on the Trustee
by the Internal Revenue Code or oAer taxing provisions.
(2)

In the discretion ofthe Trustee, as a form of

payment by a Beneficiary to the Trustee, any entitlement ofthat Beneficiary under this
Trust may be applied in payment ofthat Beneficiary's share ofthe Death Taxes, and
interest attributable to other property received by that Beneficiary.
(3) In its discretion, the Trustee may distribute the
Trust according to its terms in whole or in part prior to final audit or settlement ofthe
Death Tax and income tax liability ofthe Grantor's estate, notwithstanding that
attributable Death Taxes may be altered thereafter.

(4) The Trustee shall not be personally liable for
withholding an insufficient amount as a set offagainst the liability ofa recipient or for
failing to recover attributable Death Taxes or interest following reasonable efforts and
shall not be required to litigate to enforce apportionment unless indemnified against
attorneys' fees and costs thereof.

G)

Adjustments. The Trustee's selection ofassets to be sold to

pay Death Taxes, and the tax effects thereof, shall not be subject to question by any
Beneficiary. The Trustee is hereby indemnified against any liability it may incur to any
recipient ofproperty not passing under this Trust for the effect ofany action taken in the
computation or payment ofDeath Taxes that directly or indirectly affects any recipient's
liability under this provision. Elections or allocations authorized under the Internal
Revenue Code may be made by the Trustee in its discretion without regard to or liability
for the effect thereofon any Beneficiary. No adjustment shall be made between income
and principal, in the relative interests ofthe recipients, or in the amount or selection of

Page 60 THIRD AMENDED AND RESTATED
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 assets allocated to any Trust to compensate for the effect ofany such action or for the

effect on the amount of any Death Tax attributable to any recipient of property includible
in the Grantor's estate for Death Tax purposes.
(k) Conflict ofLaws. For all purposes of interpreting this
provision and ascertaining the rights of any recipient of property includible in the
Grantor's estate for Death Tax purposes, the law ofthe state of California shall govern
notwithstanding the nature or location ofthe property or the domicile ofthe recipient.
13.9 Pavment ofExpenses. Notwithstanding the provisions ofthe
Paragraph titled "Principal and Income," the Trustee shall pay from income or principal
ofthe Trust Estate, or partly from each, in the Trustee's sole and absolute discretion,the
following:
(a)

all expenses incurred in the administration ofthis Trust and

the protection ofthe Trust against legal attack (including but not limited to reasonable
attorneys' fees and compensation payable to the Trustee under the provisions ofthis Trust
Agreement); provided, however,that no such expenses shall be paid from the Marital
Trust as a result ofthe death ofthe Grantor except to the extent there is no other source .
available from which to pay such expenses; and
(b) except as otherwise specifically provided in the Paragraph
titled "Death Taxes; Apportionment," all payments pursuant to the Paragraphs titled
"Payments Upon the Death ofthe Grantor or Spouse" and "Powers and Duties Regarding
Payment ofGST Tax Liability."

It is the desire ofthe Grantor that the Trustee exercise its discretion pursuant to this
Paragraph in a manner consistent with the intention ofthe Grantor to obtain the
niaximum federal estate tax marital deduction upon the death ofthe Grantor and not to

reduce or otherwise adversely affect the Trust's qualification for any charitable deduction
otherwise available for federal estate tax purposes. In particular, the Trustee may not
exercise the discretion granted pursuant to this Paragraph so as to impose a material
limitation on the income from Trust property otherwise qualifying for the federal estate
tax marital deduction or charitable deduction, whether as provided in Treasuiy
Regulation Section 20.2056(b)-4(a) or otherwise, and any such attempted exercise of
discretion shall be void.
13.10 Disbursements in Good Faith. Unless the Trustee shall receive

written notice ofany birth, death or other event upon which the right to receive income or
principal from a Trust may depend,the Trustee shall incur no liability for disbursements
made in good faith to persons whose interests shall have been affected by that event.
13.11 Liability for Conduct ofCo-Trustees. Predecessor Trustees and

Successor Trustees. No Trustee or Co-Trustee shall be liable or responsible for any act.

Page 61 TfflRD AMENDED AND RESTATED
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419843Svl

 omiission or default ofany other Co-Trustee, predecessor Trustee or successor Trustee, as

the case may be, provided that such Trustee or Co-Trustee shall have had no knowledge
ofthat act, omission or default and no knowledge of facts which might reasonably be
expected to put such Trustee or Co-Trustee on notice thereof.

13.12 Accounting. Except as may otherwise be required by law, the
Trustee shall not at any time be required to make any accounting ofthe administration of
the Trust Estate to any court or public authority whatsoever. During the lifetime ofthe
Grantor,the Trustee shall account or report information regarding any Trust created
hereunder("Account") only to the Grantor. Following the death ofthe Grantor and
during the lifetime ofthe Spouse,the Trustee shall Account to the Spouse and the other
Beneficiaries(or to the legal guardian or conservator of any Beneficiary who has not
reached the age of majority or who has been declared incapacitated) as to each Trust
created hereunder. After the death ofthe Spouse,the Trustee shall Account to the other

Beneficiaries(or to the legal guardian or conservator ofany Beneficiaiy who has not
reached the age of majority or who has been declared incapacitated) as to each Trust
created hereunder. Notwithstanding the provisions ofSection 16062 ofthe California

Probate Code or any other applicable law requiring an annual Account, any account or
report required to be made pursuant to the terms ofthis Paragraph shall not be required to
be made annually but, rather, shall be required to be made no more frequently than
annually upon the reasonable request ofthe Grantor, the Spouse or the Beneficiaries(or
legal guardian or conservator, as appropriate); provided, however, that nothing in this
sentence shall alter the duty ofthe Trustee to Account at the termination ofa Trust and

upon a change of Trustees. The Trustee shall not be required to(but may,in the Trustee's
sole discretion) Account to any person having a future interest(whether vested or
contingent)in the Trust Estate. The written approval ofan account by the Grantor,the
Spouse, and the other Beneficiaries, as provided above, shall not be required; however, if
such written approval is provided, it shall be final and conclusive with regard to all
transactions disclosed in the account or report as to all beneficiaries ofthat Trust,
including unborn and contingent beneficiaries.
13.13 Residence for Spouse. Ifany interest in the residence the Grantor

and Spouse may be occupying at the time ofthe death ofthe Grantor is allocated to any
Trust created hereunder, the Trustee is authorized and directed to allow the Spouse to use
and occupy that residence as her residence without payment ofrent therefor during her
life, or so long as she continues to occupy that residence. Upon the written request ofthe
Spouse, the Trustee shall sell or otherwise transfer the Trust's interest in that residence

and shall purchase, acquire or build a residence ofequal or lesser value, ifand as
requested by the Spouse. Title shall be taken in the name ofthe Trustee as to the interest

so purchased or otherwise acquired, and the Spouse shall be allowed to occupy that
residence on the terms previously set out in this Paragraph. Ifthe Spouse does not
request acquisition ofanother residence, or ifthe other residence is oflesser value, the
Trustee shall invest the proceeds ofthat sale, or the amount not reinvested in another

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 residence, as the case may be, and shall administer and distribute the income and
principal ofthose funds under the terms ofthis Trust Agreement exclusive ofthis
Paragraph. Ifthe Spouse ever ceases to occupy the residence in which a Trust hereunder
owns an interest, the Trustee may sell that Trust's interest in that residence. The Trustee

shall pay that Trust's proportionate share ofthe cost and expenses of maintaining that
residence, including, but not limited to, property taxes, assessments, fire and casualty
insurance premiums, maintenance costs, ordinary repairs and replacements, and
reasonable improvements for that residence, from that Trust. The Trustee shall also pay
that Trust's proportionate share ofany notes secured by mortgages or deeds oftrust on
that residence from that Trust. As used in this Paragraph, the word "residence" shall
mean the residence originally distributed to the Trustee and any other residence acquired
in lieu thereof in accordance with the provisions ofthis Paragraph, whether occupied on a
full-time or part-time basis, including resort property. Further, the term "residence" as
used in this Paragraph shall include, without limitation, a dwelling house, mobile home,
condominium, co-operative, own-your-own apartment unit and any other residential unit,
including life care in a retirement facility.

13.14 Notification to Beneficiaries. The Trustee shall provide

notification upon each and every date that(a)a portion ofthis Trust or any subtrust
hereunder becomes irrevocable or(b)there is a change in Trustees ofany irrevocable
trust created hereunder, to the extent that such notification may be required under the
laws ofthe state of Califomia then in effect. Such notification shall contain the

information as required under, be served in a manner consistent with, and be provided to
each Beneficiary ofany Trust so affected and to any other person as may be required
under, the laws ofthe state ofCalifomia then in effect. The notification required by this
Paragraph may not be waived in any manner by the Grantor, the Tmstee or any
Beneficiary ofany Tmst hereunder, unless permitted by law.
13.15 Subjection of Assets to Probate. It is the intention of the Grantor

to avoid probate through the use ofthis Trust. I^ however, the Trustee determines that it
shall be in the best interests ofthe Beneficiaries ofthe Trust, and the beneficial interests

ofthe Beneficiaries shall not thereby be altered, the Tmstee may subject any asset to
probate to accomplish any appropriate purpose for the Estate ofeither the Grantor or the
Spouse, this Tmst,any Trust created hereunder or any Beneficiary.
ARTICLE 14

PROVISIONS REGARDING GST TAX:

14.1

Intention Regarding GST Tax. The Grantor intends that the

Trustee shall perform (or refrain from performing)such acts as authorized pursuant to the
terms ofthis Tmst Agreement, or otherwise, as the Tmstee shall determine, in the
Tmstee's sole discretion, with respect to any liability for the GST tax pursuant to Section

Page 63 THIRD AMENDED AND RESTATED
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 2601 ofthe Internal Revenue Code, whether imposed upon the Grantor, the Spouse,the
Estate ofthe Grantor, the Estate ofthe Spouse, any trust created by either the Grantor or
the Spouse, including, without limitation, the Trust or any subtrust created hereunder, or
any beneficiary thereolC or upon any transferee or any other person or entity, in order to
minimize the aggregate liability with respect to all estate, inheritance or other death taxes

(including, without limitation, any GST tax) occasioned or payable by reason ofthe death
ofeither the Grantor or the Spouse or both or otherwise arising as a result of transfers of
property, whether outright or in trust, made by or on behalf o^ or which are otherwise

attributable to, either or both the Grantor and Spouse, whether during life or upon the
death of either the Grantor or the Spouse.

14.2

Duties Regarding Allocation ofGST Tax Exemption. The Trustee

shall cooperate with and otherwise assist the executor ofthe Will ofthe Grantor and the

executor ofthe Will ofthe Spouse(or such other persons who may make the election in
the absence ofan executor) in the allocation ofall or any portion ofthe Grantor's or the
Spouse's GST tax exemption (as defined in Section 2631 ofthe Internal Revenue Code),
or ofa counterpart exemption under any applicable state law, which has not been

allocated during the respective lives ofthe Grantor and the Spouse. The Grantor does not
require that any allocation ofthe GST tax exemptions ofthe Grantor or the Spouse
benefit the transferees ofany property equally, proportionally or in any other particular
manner.

14.3

Creation ofSeparate Trusts Based Unon Inclusion Ratio.

Notwithstanding any other provision ofthis Trust Agreement, ifall or a portion ofthe
GST tax exemption is or is anticipated to be allocated to any Trust hereunder, unless that
Trust will thereby have an inclusion ratio(as defined in Section 2642 ofthe Internal
Revenue Code)(the "Inclusion Ratio")ofzero,that Trust shall be divided into two or
more separate Trusts so that each Trust so created has an Inclusion Ratio ofeither zero

(an "Exempt Trust")or one(a "Nonexempt Trust"). In so dividing a Trust, the Trustee
shall distribute to the Nonexempt Trust property equal in value to the minimum amount
necessary to establish that Trust with property in an amount necessaiy to produce an
Inclusion Ratio ofone while leaving the Exempt Trust with an Inclusion Ratio ofzero. If
a valid election is made pursuant to Section 2652(a)(3)to treat the Grantor as the
transferor ofall or part ofthe Marital Trust for purposes ofthe GST tax, the Trustee shall
further divide any Exempt Trust and Nonexempt Trust created under the Marital Trust

into separate Trusts, based upon the identity ofthe transferor ofsuch Trust for purposes
ofthe GST tax. Further, if property in a Trust having a certain Inclusion Ratio is directed
to be added to a Trust with a different Inclusion Ratio,the Trustee may decline to make

the addition and, instead, may administer the property as a separate Trust with provisions
identical to the Trust to which it otherwise would have been added.
14.4

Power to Grant and Revoke General Testamentarv Power of

Appointment. The Trustee shall have the sole discretionary authority to amend the terms

Page 64 THIRD AMENDED AND RESTATED
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 ofany Trust created hereunder(with the exception ofthe Marital Trust and any subtrusts
thereunder) having an Inclusion Ratio greater than zero(a)to grant to any Beneficiary
thereofa general testamentary power of appointment(as defined for federal estate tax
purposes) with respect to such Beneficiaiy's interest therein, ifthe Trustee deems, in the
Trustee's sole discretion, such action to be in the best interests of the beneficiaries ofthe

Trust as a group, and(b)to eliminate or otherwise revoke such power of appointment, if
created. Any amendment pursuant to this Paragraph may limit the amount subject to the
power ofappointment, may limit the class of permissible appointees ofsuch Beneficiary's
interest(including, without limitation, an appointment to only that Beneficiary's
creditors), may require that the power ofappointment be exercised jointly with another in
a maimer consistent with the objectives ofthe power or otherwise impose such conditions
and limitations on its exercise as the Trustee shall determine. Any amendment granting a
power ofappointment shall be in writing stating any limitations on the exercise ofsuch

power and the manner in which it may be exercised. The Trustee shall send a copy of
such amendment to the Beneficiary who is the grantee ofthe power. The Trustee may
exercise the powers described in this Paragraph from time to time, and the Trustee may
modify or reverse their prior exercise at any time.
14.5

Powers and Duties Regarding Pavment ofGST Tax Liabilitv. If

the Trustee determines that(a)any termination ofan interest in or a power over Trust
property constitutes a taxable termination pursuant to Section 2612(a)ofthe Internal
Revenue Code, or(b)any distribution ofTrust property constitutes a direct skip pursuant
to Section 2612(c)ofthe Internal Revenue Code,the Trustee shall pay the amount of
GST tax arising from such termination or distribution from the Trust property to which it
relates, without adjustment ofthe relative interests ofthe Trust beneficiaries. Ifthe

Trustee determines that any distribution from a Trust(other than pursuant to a power to
withdraw or appoint) is a taxable distribution pursuant to Section 2612(b)ofthe Internal
Revenue Code,the Trustee shall have the power,exercisable ifand to the extent

determined by the Trustee in the Trustee's sole discretion, to augment the distribution by
an amount which the Trustee estimates to be sufficient to pay all or a portion ofthe GST
tax arising as a result ofsuch distribution and shall charge the amount ofthe

augmentation against the Trust to which the distribution relates. Any pa3mients required
or otherwise authorized pursuant to the terms ofthis Paragraph shall be made in
coordination with the payments required by the Paragraph titled "Payments Upon the
Death ofthe Grantor or Spouse" and shall be subject to the limitations expressly provided
in this Trust Agreement including, without limitation, the provisions of Article 6
regarding the Marital Trust. Ifany GST tax paid pursuant to this Paragraph is imposed in
part by reason ofTrust property and in part by reason of property not held as part ofthe
Trust Estate, the Trustee shall only pay that portion ofthe tax which the value ofthe
Trust property taxed bears to the total property taxed, taking into consideration

deductions, exemptions and other factors which the Trustee deems pertinent, in the
Trustee's sole discretion.

Page 65 THIRD AMENDED AND RESTATED
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 14.6

General Powers Regarding GST Tax and Other Considerations.

All provisions ofthis Trust Agreement, except to the extent inconsistent with the marital

deduction objectives ofthe Marital Trust or other objectives ofthe Grantor, shall be
construed to permit the division, consolidation and administration of, and distributions

from,the Trust in a timely manner consistent with the Grantor's objective ofobtaining the
efficient and effective use ofthe respective available GST tax exemptions ofthe Grantor
and the Spouse and otherwise reducing the incidence ofthe GST tax and other death

taxes. Except as expressly provided in this Trust Agreement to the contrary, including,
without limitation, the provisions of Article 6 regarding the Marital Trust, the Trustee
shall have the sole discretionary authority to do any and all acts as the Trustee may deem
necessary or desirable in furtherance ofthe Grantor's intentions, subject to the Trustee's

fiduciary and other considerations, including, without limitation, the authority to:
(a)
whether or not pro rata;

allocate the burden ofany GST tax in an equitable maimer,

(b) pay or withhold any GST taxes levied upon any Trust from
such sources offunds as the Trustee deems prudent and advisable;
(c)

make adjustments, unless otherwise restricted, in the

amounts to be received by the beneficiaries in compensation for the tax consequences of
paying or otherwise allocating the burden ofthe GST tax;
(d)

make distributions to beneficiaries from such sources of

funds or other property as the Trustee deems prudent and advisable, unless otherwise
restricted;

(e)
divide any Trust established or to be established pursuant to
this Trust Agreement,including, without limitation, the Marital Trust, into separate
Trusts; and

(f)
consolidate or otherwise combine separate Trusts:(1)
having identical Inclusion Ratios; or(2)having different Inclusion Ratios ifthe Trustee

believes that economic efficiency or other compelling considerations justify sacrificing
their distinct GST tax characteristics; provided, however,that the Marital Trust or any
subtrust thereof may not be combined with any Trust other than a subtriist ofthe Marital
Trust prior to the death ofthe Spouse.

Except as expressly provided to the contrary in this Trust Agreement, ifa Trust otherwise
to be established is divided under the provisions ofthis Article into separate Trusts, each
such subtrust shall have the same provisions as the Trust from which it was established

and references in this Trust Agreement to such original Trust shall collectively refer to
the separate subtrusts derived from it. The Trustee may exercise the powers described in
this Paragraph from time to time, and such powers may be used to modify or reverse then-

Page 66 THIRD AMENDED AND RESTATED
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 prior exercise. In deciding whether and how to exercise these powers,the Trustee may
take account ofefficiencies ofadministration, GST and other transfer tax considerations,
income tax factors affecting the various Trusts and their beneficiaries, present and future
financial and other objectives ofthe various Trusts and their beneficiaries, the need or
desirability ofhaving the same or different Trustees for various Trusts or shares, and any
other considerations the Trustee may deem appropriate. There is no requirement that any
acts taken to reduce the incidence ofany tax occasioned or payable by reason ofthe death
ofeither or both the Grantor and the Spouse benefit the transferees ofsuch property
equally, proportionally or in any other particular manner.

14.7 Successor Trustee for Certain Purposes. Notwithstanding anything
herein to the contrary, the Trustee may not exercise any power granted pursuant to this

Article including, without limitation,(a)the power to m^e or participate in any decision
regarding the allocation ofthe respective GST tax exemptions ofthe Grantor and the

Spouse and (b)the power to create, eliminate or modify any power ofappointment, in
any way that would have the effect ofgranting the Trustee a general power of
appointment(as defined for federal estate tax purposes)over property with respect to
which the Trustee would not otherwise have such a general power. Ifthis prohibition
renders the Trustee unavailable to perform a duty or exercise a particular power, the
person, persons or entity who would serve as successor Trustee to the Trustee shall serve
as the Trustee for that limited purpose. Ifthe successor Trustee so selected would

similarly be prohibited jfrom acting pursuant to the provisions ofthis Paragraph, the
procedure provided in this Trust Agreement for selecting a successor Trustee shall be
followed until a successor Trustee not so prohibited shall serve as Trustee for that limited
purpose.

14.8 Exoneration ofTrustee. The Trustee shall not be liable for any
good faith exercise of, of failure to exercise, the Trustee's powers pursuant to the
provisions ofthis Article. In the event the Trustee's actions result in a detriment to one or
more beneficiaries or other transferees, it is the Grantor's intention that such beneficiaries

and transferees shall exonerate and otherwise hold harmless the Trustee with respect to
such detriment.

14.9 Simultaneous Death. Notwithstanding any provision in this Trust
Agreement to the contrary, ifpursuant to the terms ofthis Trust Agreement(a) property
is to pass to or is to be held in trust for a lineal descendant ofthe Grantor(or ofthe
Spouse or ofa former spouse ofthe Grantor)(a "Deceased Child") and(b)in the event of
the death ofsuch Deceased Child, such property is to pass to a further lineal descendant
ofthe Grantor(or ofthe Spouse or ofa former spouse ofthe Grantor) assigned to a
generation (as determined pursuant to the provisions ofInternal Revenue Code Section
2651) younger than the Deceased Child(a "Deceased Grandchild"), then, in the event that
a Deceased Child and a Deceased Grandchild die simultaneously or under circumstances
that make it difficult or impossible to determine their order ofsurvival, the Trustee is

Paged? THIRD AMENDED AND RESTATED
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 hereby authorized to and shall presume, for purposes ofthis Article, that the Deceased
Child and the Deceased Grandchild have died simultaneously.
ARTICLE 15
DEFINITIONS AND RULES OF CONSTRUCTION:

15.1 Definitions Set Forth in This Article. The following definitions
and rules ofconstruction shall apply to the terms listed in this Article wherever those
terms are used in this Trust Agreement and wherever reference is made to those terms in
this Trust Agreement.
15.2 Artistic Propertv. For purposes ofthis Trust Agreement,the term
"Artistic Property" means(A)all intellectual property rights beneficially held by the
Trust Estate(or to be acquired by the Trust Estate as a result ofthe death ofthe Grantor)
(whether such ownership is outright or through an entity), which are attributable to any
and all ofthe Grantor's efforts with respect to his music, including, without limitation, all
ofhis rights as a recording artist, composer, publisher and/or record producer; and(B)all
tangible personal property held by the Trust Estate(or to be acquired by the Trust Estate
as a result ofthe death ofthe Grantor) which are attributable to any and all ofthe
Grantor's efforts with respect to his music, including, without limitation, as a recording
artist, composer, publisher and/or record producer(such as audio and visual recording
masters).

15.3 Beneficiary. The term "Beneficiary" shall be deemed to mean and
is intended to include only those persons for whom a part ofthe Trust Estate has been
apportioned. The term "Beneficiary" shall specifically not include any person who
legally might be considered as a residuary or contingent beneficiary, and any such person
shall be considered as a "Beneficiary" only at such time as a part ofthe Trust Estate
actually has been apportioned for his use and benefit in accordance with the terms and
provisions ofthis Trust Agreement or any amendments thereto.

15.4 Corporate Trustee. The term "Corporate Trustee" shall mean a
corporation, the trust department ofa bank or the trust department ofany title insurance
company, which is authorized by state law to be engaged and act as a trustee.
15.5

Education. The term "education" shall be construed to include

private preschool, elementary and secondary education (including instruction in music,
art, computers, sports and physical education, and other subjects and topics, and whether
conducted before, during or after the regular school day, and wherever located or held),
vocational training, college and postgraduate study (including professional education), so
long as pursued to the advantage ofa beneficiary, at any recognized educational
institution ofa beneficiary's choice; and in determining payments to be made for
education, the Trustee shall take into consideration a beneficiary's tuition, books.

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 supplies, tutors, appropriate travel expenses and reasonable living expenses.
Notwithstanding the foregoing, education shall not have any meaning broader than that
allowed by Section 2041(b)ofthe Internal Revenue Code.

15.6

Gender or Number. The masculine, feminine or neuter gender, and

the singular or plural number, shall each be deemed to include the others whenever the
context so indicates.

15.7 Incapacity. The terms "incapacitated" or "incapacity," and the
term "unable to serve" or equivalents thereof, as applied to any beneficiary or successor
Trustee hereunder, shall be deemed to include not only a person who has been judicially
declared incapacitated and a person for whom a guardian or conservator or other

fiduciary ofthe person or estate or both shall have been appointed, but also a person who
shall be deemed to have become substantially unable to manage his or her own financial
resources or resist fraud or undue influence. That incapacity shall be evidenced by the
written statement oftwo(2)licensed physicians upon Ae request ofany beneficiary,
Trustee or successor Trustee hereunder. In the case ofa person who is serving as Trustee
hereunder, the person or institution designated as next successor Trustee may commence
acting in such capacity upon that evidence without liability by reason thereof Any
person who has been determined to be incapacitated under the provisions ofthis
Paragraph shall be deemed to have regained his or her capacity for all purposes ofthis

Trust, including to resume acting as Trustee, upon a written statement to that effect by
two(2)licensed physicians.
15.8

Internal Revenue Code. Reference to code sections ofthe "Internal

Revenue Code" shall refer to those sections ofthe Internal Revenue Code of 1986, as

amended,as they exist at the time ofexecution ofthis Trust Agreement and any
corresponding or substitute provisions from time to time existing and to the regulations
pertaining to those sections.

15.9 Issue: Child: Children. Subject to the provisions ofthe Article
titled "Declarations Concerning Family," the terms "issue," "child" and "children" shall

mean lawful lineal descendants ofall degrees, specifically including the following:
(a) A child born outside ofwedlock, ifa parent and child
relationship existed between such child and his or her deceased parent as determined
under the laws ofthe state of California.

(b) Adopted persons and their issue, provided that the person
was adopted when he or she was a minor, and shall include any person conceived prior to
the death ofsuch person's deceased parent but bom thereafter.
(c)

A person bom as a result ofartificial insemination, in vitro

fertilization or other medical intervention, which person shall be deemed to be a genetic

Page 69 THIRD AMENDED AND RESTATED
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 descendant of(1)the woman (other than a woman who was contractually serving as a
surrogate mother) who gave birth to such person (the "birth mother") and (2)the birth
mother's domestic partner at the time such person was conceived or implanted, unless

there is clear and convincing evidence that the birth mother's domestic partner withheld
consent to the medical intervention and did not subsequently voluntarily acknowledge
parentage. In the event ofany question whether(A)a birth mother's domestic partner
withheld consent to a medical intervention for purposes ofthis Paragraph or(B)
parentage has been voluntarily acknowledged for purposes ofthis Paragraph, then the
determination ofthe Trustee (other than the birth mother or the putative parent) shall be
binding on all persons interested in the Trusts hereunder and on all persons claiming to be
so interested.

Unless expressly specified otherwise, distribution or apportionment to or among children
and/or issue shall be made by right ofrepresentation.
15.10 Net Income. The term "net income" shall mean the income from

the Trust Estate determined in accordance with this Trust Agreement and after the
payment or reservation ofsufficient funds to pay all expenses of management and

administration ofthe Trust Estate, including the compensation ofthe Trustee.
15.11

The word "or" used in any list of more than two items other

than a list of Beneficiaries shall be construed to include the conjunctive as well as the
disjunctive.

15.12 Spouse. The term "spouse" shall include only persons who are

lawfully married to and not legally separated from the person to whose spouse reference
is made.

15.13 Support. Maintenance and Health. The terms "support,"

"maintenance" and "health" shall have the same meanings in this Trust Agreement as
those terms have under Section 2041(b)ofthe Internal Revenue Code.

15.14 Survival. For puiposes ofthis Trust Agreement, unless a specific
period ofsurvival is otherwise provided herein, a person shall be deemed to have

survived the Grantor or Spouse(as appropriate)or shall be deemed to have been living at
the date ofthe death ofthe Grantor or Spouse(as appropriate)only ifsuch person
survived the Grantor or Spouse(as appropriate) by at least ninety(90)days. Unless such
person has survived the Grantor or Spouse(as appropriate) by at least ninety(90)days,

such person shall be deemed to have predeceas^ the Grantor or Spouse(as appropriate).
15.15 Trust. The term "Trust" shall specifically include any Trusts
created hereunder.

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 15.16 Trustee. The term "Trustee" shall be deemed to include not only
the singular, but also the plural, and to include any successor Trustee or Co-Trustees.
15.17 Trust Estate. The term "Trust Estate" shall be deemed to mean all

ofthe property held in trust by the Trustee.
ARTICLE 16
GENERAL TRUST PROVISIONS:

16.1

Termination. Unless sooner terminated in accordance with other

provisions ofthis Trust Agreement,each Trust created under this Trust Agreement shall
terminate after the latest of:

(a)

twenty-one(21) years after the latest of:

(1)

the death ofthe Grantor;

(2)
the death of all ofthe issue (ifany)of the Grantor
who are living at the time ofthe death ofthe Grantor;
(3)
the death ofany other Beneficiary ofthe Trusts
created hereunder living at the time ofthe death ofthe Grantor; or
(b)

such later time as may then be allowed by law.

All principal and undistributed income ofany Trust so terminated shall be distributed to
the then income Beneficiaries ofthat Trust in the proportions in which they are, at the
time oftermination, entitled to receive that income. However, ifthe rights to income are
not then fixed by the terms ofthat Trust, distribution under this Paragraph shall be made
to the Beneficiaries as are then entitled or authorized in the discretion ofthe Trustee to

receive payments firom that Trust. In the event there are no Beneficiaries so entitled, the
Trustee shall use any reasonable method to make the distribution required hereunder, as
determined in the Trustee's discretion.

16.2 Spendthrift Provision. No interest of any Beneficiary ofany Trust
created in this Trust Agreement shall be subject to sale, assignment, hypothecation or
transfer by any Beneficiary, other than in the exercise ofa power ofappointment given to
the Beneficiary, nor shall the principal ofany Trust, or the income arising therefi-om, be
liable for any debt ofany Beneficiary, or be subject to attachment by or the interference
by or control ofany creditor ofany Beneficiary, or be taken or reached by any legal or
equitable process in satisfaction ofany debt or liability of any Beneficiary, including,
without limitation, the process ofany court in aid ofexecution ofany judgment so
rendered. All ofthe income and principal under any Trust shall be transferable, payable

Page 71 THIRD AMENDED A>1D RESTATED
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 and deliverable only to the designated Beneficiary at the time the Beneficiary is entitled
to take under the terms ofthis Trust. The personal receipt ofthe Beneficiary may be
made a condition precedent to the payment or delivery by the Trustee to that Beneficiary.
The Trustee may, however, deposit in any bank designated in writing by a Beneficiary, to
his or her credit, income or principal payable to that Beneficiary. This Article shall not
restrict any authority ofthe Trustee to use and disburse funds for the support,
maintenance, health and education ofa Beneficiary, or to disburse funds to a guardian or
conservator as herein provided.
16.3

Incontestabilitv.

(a)
Intentional Omission. The Grantor has intentionally made
no provision in this Trust Agreement for any heirs or relatives ofthe Grantor who are not

herein mentioned or designated, and the Grantor generally and specifically has
intentionally omitted to provide for eveiy person claiming to be or who may be
determined to be an heir-at-law ofthe Grantor, except as otherwise mentioned in this
Trust Agreement.

(b)
Contest. Anyone(singly or in conjunction with anyone
else) who is or who may become a beneficiary under Ais Trust Agreement and any
charitable organization who may be a beneficiary under this Trust Agreement who shall
contest, attack or seek to impair or invalidate in any court any provision ofthe following:

(1) the Trust(or any Trusts created hereunder)or any
other revocable or irrevocable trust established by the Grantor, and any amendments to
any ofthe foregoing Trusts;
(2)

the Will ofthe Grantor or any codicil to any Will of

the Grantor;

(3)
any designation of beneficiaiy executed by the
Grantor with respect to any insurance policy, annuity, individual retirement account, or
qualified or non-qualified employee benefit plan or plan ofdeferred compensation or
other assets passing outside this Trust Agreement or the Will ofthe Grantor;
(4)
any written agreement between the Grantor and the
Spouse defining or altering their property rights as married persons;

(5) the characterization ofthe property held as part of
the Trust Estate as the Grantor's separate property;
(6)

any buy-sell agreements; or

Page 72 THIRD AMENDED AND RESTATED
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 (7)
any family partnership agreements or limited
liability company operating agreements,

and anyone who shall conspire with or voluntarily assist anyone attempting to do any of
these things, shall not be entitled to any benefits under any Trust created hereby, and any
and all benefits and portions ofthe income or principal or both ofthis Trust otherwise
provided to be paid to that person or charitable organization(1)in the case ofa person,
shall be paid and distributed as though that person had died without issue before
becoming entitled to receive any income or any portion ofthe principal ofthis Trust or
(2)in the case ofa charitable organization, shall be distributed to any one or more other
charitable organization(s) which qualify for tax exemption under Internal Revenue Code
Section 501(c)(3)and which meet the charitable intentions ofthe Grantor consistent with
the provisions ofthis Trust Agreement(including, without limitation, any one or more of
the charitable organizations named in this Trust Agreement which are not disqualified
under this Paragraph), as determined by the Trustee, in the Trustee's sole discretion.
(c)
Election ofSpouse. The Grantor believes that all property
made a part ofthe Trust Estate and all rents, issues, profits, increases and appreciation
therefi-om are the Grantor's separate property. The provisions regarding the division and
allocation ofthe Trust Estate reflect the Grantor's intention to dispose ofthe Trust Estate
in whole. In the event that the Spouse pursues her independent legal rights(if any)to
community or separate property ofthe Spouse which she believes(reasonably or
otherwise) to be held as part ofthe Trust Estate, the Spouse shall be deemed to have
elected to renounce all right or interest in the specific allocation conditionally provided
pursuant to Paragraph 5.4(including any right ofNANCY COSTICK and/or DYLAN),
in accordance with the principles established in Burch v. George,1 Cal 4th 246(1994).
In furtherance ofthe Grantor's intentions and his desire to discourage litigation relating to
the division and allocation ofthe Trust Estate, the Grantor expressly intends that any
action or proceeding to determine the character, title or ownership of property held as
part ofthe Trust Estate shall be deemed to be a contest ofthis Trust and fiie Trusts

created hereunder, in accordance with Section 21305(a)(2) ofthe Califomia Probate
Code. In interpreting and administering the provisions ofthis Paragraph 16.3(c), the
Trustee is directed to take all actions necessary to preserve the availability ofthe federal
estate tax marital deduction under Section 2056 ofthe Internal Revenue Code.

(d) Intentions ofthe Grantor. The provisions ofthis Paragraph
shall apply even though such person or entity shall be found by a court oflaw to have
originated the Judicial proceeding in good faith and with probable cause.
Notwithstanding anything to the contrary contained herein, a "contest" shall include any
similar action to the above in an arbitration proceeding. The provisions ofthis Paragraph
shall not apply to any disclaimer by any person ofany benefit under this Trust Agreement
or under any Will. The Trustee is specifically authorized to defend, at the expense ofthe
Trust Estate, any contest or attack ofany nature upon this Trust Agreement,and any

Page 73 THIRD AMENDED AND RESTATED
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 other action or matter that would interfere with the disposition ofassets ofthe Trust
Estate pursuant to the Grantor's estate plan as provided in this Trust Agreement, the
Grantor's Will, said beneficiary designations, amendments to said documents and any
other documents that are testamentary in nature.
16.4 Disinheritance for Assertion ofClaims. Anyone (singly or in
conjunction with anyone else) who is or may become a beneficiary under this Trust
Agreement and any charitable organization who may be a beneficiary under this Trust
Agreement who asserts any claim against the Trust Estate, the Grantor's probate estate, or
against any other trust created in whole or in part by the Grantor based on:
(a)

common-law marriage;

(b)

the theory of Marvin v. Marvin. 18 Gal. 3d 660(1976), or

(c)

a "quantum meruit" theory;

(d)

a constructive trust theory; or

any similar theory;

(e)
an alleged oral agreement(or an alleged written agreement
which is to be proved by parol evidence), claiming that the Grantor agreed to give or
bequeath anything to such person or entity or to pay such person or entity for services
rendered (whether or not the court finds such agreement exists),
or otherwise files a Mvolous petition or objection, and anyone who shall not defend or
assist in good faith in the defense ofany and all such claims shall not be entitled to any
benefits under any Trust created hereby, and any and all benefits and portions ofthe
income or principal or both ofthis Trust otherwise provided to be paid to that provided to
be paid to that person or charitable organization(1)in the case ofa person, shall be paid
and distributed as though that person had died without issue before becoming entitled to
receive any income or any portion ofthe principal ofthis Trust or(2)in the case ofa
charitable organization, shall be distributed to any one or more other charitable
organization(s) which qualify for tax exemption under Internal Revenue Code Section
501(c)(3) and which meet the charitable intentions ofthe Grantor consistent with the

provisions ofthis Trust Agreement(including, without limitation, any one or more ofthe

charitable organizations named in this Trust Agreement which are not disqualified under
this Paragraph), as determined by the Trustee, in the Trustee's sole discretion. The

provisions ofAis Paragraph shall apply even though such person or entity shall be found
by a court oflaw to have originated the judicial proceeding in good faith and with
probable cause. The provisions ofthis Paragraph shall not apply to any disclaimer by any
person ofany benefit under this Trust Agreement or under any Will. The Trustee is
specifically authorized to defend, at the expense ofthe Trust Estate, any contest or attack

Page 74 THIRD AMENDED AND RESTATED
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4198435V1

 ofany nature upon this Trust Agreement. This Paragraph shall not be applicable to the
Spouse with respect to the Marital Trust.

16.5 Costs of Defense Charged Against Contestant. Notwithstanding
the foregoing provisions ofParagraph 16.3 and Paragraph 16.4, ifthe Trustee is
unsuccessful in defending any matter or action described therein and does not settle such
matter or action and iffor any reason the distributions and/or allocations of interests in

the Trust Estate to the contestant under this Trust Agreement and/or the Will ofthe
Grantor are not forfeited, all ofthe costs ofsuch defense shall be charged against the
distributions and/or allocations of interests to the contestant under this Trust Agreement
and/or the Will ofthe Grantor, and all distributions and/or allocations of interests to the
contestant under this Trust Agreement and/or the Will ofthe Grantor shall be reduced on

a dollar-for-dollar basis by aggregate net value as determined by the Trustee, ofall real
and personal property passing to or distributable to or for the benefit ofthe contestant as a
result ofsuch matter or action, including, without limitation, assets ofthe Trust Estate or
the Grantor's probate estate, insurance proceeds, employee benefits and deferred
compensation. In making any settlement ofsuch matter or action, the Trustee shall

consider the foregoing provisions ofthis Paragraph and shall abide by them to the extent
possible.

16.6

Invalidity. Ifany part, clause, provision or condition ofthis Trust

Agreement shall be adjudged to be invalid or unenforceable, then, notwithstanding the
invalidity or unenforceability ofthat part, clause, provision or condition, the remainder of
this Trust Agreement shall continue and shall remain in full force and effect and that part,
clause, provision or condition shall be reduced in scope to the minimum extent necessary
to avoid the invalidity.

16.7 Governing Law. Subject to the Paragraph titled "Power to
Transfer Trust to or from Another Jurisdiction," the internal laws(and not the law of
conflicts)ofthe state ofCalifornia in force from time to time shall govern the validity,
construction, interpretation and administration ofthis Trust, except that all matters
relating to real property shall be governed by the laws ofthe situs ofthat real property,
including that state's conflict-of-law principles.
16.8 Disclaimers. Any Beneficiary shall have the right to disclaim all
or any part ofany interest in property to which he or she may be entitled under this Trust
Agreement, by giving written notice ofsuch disclaimer to the then-acting Trustee, to the
adult Beneficiaries, to the guardians ofany minor Beneficiaries and to the conservators of

any incapacitated Beneficiaries; provided, however,that a failure to notify the adult
Beneficiaries, the guardians ofany minor Beneficiaries and the conservators ofany
incapacitated Beneficiaries regarding a Beneficiary's disclaimer shall not affect the
validity or qualification ofany disclaimer under any federal or state law. The notice shall

be delivered personally or by certified or registered mail, postage prepaid, return receipt

Page 75 THIRD AMENDED AND RESTATED
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4I9843Svl

 requested. Such disclaimer shall also in all respects comply with the applicable laws,
rules, regulations and procedures, whether legislative, administrative,judicial or
otherwise, as may be appropriate. Except as otherwise provided herein, any interest so
disclaimed shall be held or distributed as ifthe disclaimant was deceased as ofthe

effective date ofsuch disclaimer. No other interest ofthe Beneficiary shall be affected by
the disclaimer, unless that interest shall also be disclaimed.

16.9 Headings and Captions. The headings and captions appearing at
the commencement ofthe Articles and Paragraphs are descriptive only and for
convenience in reference. Should there be any conflict between any such heading or
caption and the language ofthe Article or Paragraph over which the heading appears, the
language ofthe Article or Paragraph, and not such heading or caption, shall control and
govern in the construction ofthis Trust Agreement.

16.10 Cross-References. All cross-references to Articles and Paragraphs
contained in this Trust Agreement, unless otherwise specifically directed to another
agreement or document, refer to provisions in this Trust Agreement and shall not be
deemed to be references to any other agreement or document.
16.11 Notices. Unless applicable law requires a different method of

giving notice, any and all notices, demands or other communications required or desired
to be given hereunder by any party shall be in writing and shall be validly given or made
to another party ifserved personally or ifdeposited in the United States mail, certified or
registered, postage prepaid or iftransmitted by telegraph, telecopy or other electronic
written transmission device. Ifsuch notice, demand or other communication is served

personally, service shall be conclusively deemed made at the time ofsuch personal
service. Ifsuch notice, demand or other communication is given by mail, it shall be
conclusively deemed given seventy-two(72)hours after the deposit thereofin the United

States mail. Ifsuch notice, demand or other communication is served by telegraph or if
by other carrier service, it shall be conclusively deemed given upon confirmation of
delivery by the carrier. Ifsuch notice, demand or other communication is served by
electronic transmission device, it shall be deemed given seventy-two(72)hours after
sending such notice, demand or communiication, unless proofofearlier receipt is
available. Any notice, demand or other communication to be given hereunder shall be
addressed to the party to whom such notice, demand or other communication is to be

given at the last known address for that party. Any party hereto may change its address
for the purpose ofreceiving notices, demands and other communications as herein
provided by a written notice given in the manner aforesaid to the Trustee hereof.

Page 76 THIRD AMENDED AND RESTATED
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 ARTICLE 17
EXECUTION:

17.1 Declaration ofthe Grantor. The undersigned Grantor does hereby
certify that he has read this Trust Agreement and it fully and accurately sets out the
terms, Trusts and conditions under which the Trust Estate herein described is to be held,
managed and disposed of by the Trustee herein named,and he hereby approves, ratifies
and confirms this Trust Agreement in all particulars.

17.2

Execution bv the Grantor. Executed at

California, onSrft-rj/yifyy J .2006.

GRANTOR:

THOMAS EARL PETTY

17.3

Execution bv the Trustee. The foregoing Trust Agreement has

been accepted by the Trustee thereunder.
TRUSTEE

THOMASr EARL PETTY

Page 77 THIRD AMENDED AND RESTATED
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4l9843SvI

,

 ACKNOWLEDGMENT
STATE OF CALIFORNIA

COUNTY OF LOS ANGELES

OnSefh'/^ln/'i^' 1

)

200]^ before

,
(here insert name and title ofthe officer)

a Notary Public, personally appeared THOMAS EARL PETTY, personally known to me
(or proved to me on the basis ofsatisfactory evidence)to be the person(s) whose name(s)

is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies), and that by his/her/their

signature(s) on the instrument the person(s), or the entity upon behalfof which the
person(s) acted, executed the instrument.

WITNESS my hand and official seal.

WilCMMfli

SignaturI

(SEAL)

Page 78 THIRD AMENDED AND RESTATED
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4198435vl

 EXHIBIT 

1

PETITION FOR ORDER DIRECTING TRUSTEES TO ACCOUNT

2

EXHIBIT "E"

3

PERSONS ENTITLED TO NOTICE OF HEARING

4
5

Trustee:

6

DANA PETTY
15260 Ventura Blvd. #2100

7

Sherman Oaks, CA 91403

8

Attorneys for DANA PETTY as Trustee:

9

Burton A. Mitchell, Esq.
Jeffer Mangels Butler & Mitchell LLP

10

1900 Avenue of the Stars, 7**^ Floor
Los Angeles, CA 90067

11

12

Affected Beneficiaries:

13

ADRIA ROBIN PETTY,Petitioner
14
15

ANNAKIM VIOLETTE,formerly known as ANNA KIM PETTY
11900 W. Olympic Blvd. #410

16

Los Angeles, CA 90064

17

Attorney for ANNAKIM VIOLETTE,formerly known as ANNA KIM PETTY:

18

Gregory B. Gershuni, Esq.
Gershuni Law Firm

19

11377 W. Olympic Blvd., Suite 521
Los Angeles, CA 90064

20
21

DANA PETTY as a beneficiary

22

Sherman Oaks, CA 91403

23

Attorneys for DANA PETTY as a beneficiary:

15260 Ventura Blvd. #2100

24

Adam F. Streisand, Esq.

Sheppard Mullin Richter & Hampton LLP
25

1901 Avenue of the Stars, Suite 1600
Los Angeles, CA 90067

26
27

28

H;\CLtENTS\Nq\Petty\Pleadtngs\PT lo Fund APE v6.wpd

Hoffman

Sabban &
Watenmaker

EXHIBIT