CGF Industries, Inc. and Subsidiaries - Page 11




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          the CGF Partnerships and their respective contribution amounts is           
          attached to this opinion as appendix A.                                     
               The CGF partnership agreements provided that each part-                
          nership's net profits and losses were to be borne by the partners           
          in the same percentage as their capital contributions; namely, .1           
          percent by the holder of partnership interest A and the remaining           
          99.9 percent by partnership interest B.  The CGF partnership                
          agreements also required each partnership to make annual distri-            
          butions of income, pursuant to the Kansas Uniform Principal and             
          Income Act, and in accordance with the partners' interests in the           
          partnership.                                                                
               Simultaneously with the execution of the CGF partnership               
          agreements, CGF and the CGF Family Trusts executed separate                 
          agreements wherein they set down exactly how partnership interest           
          B would be owned.  They agreed that CGF would be the owner of a             
          10-year term interest in partnership interest B, upon the                   
          expiration of which it would become the sole property of the CGF            
          Family Trusts.  During the period of its term interest, CGF was             
          entitled to all of the partnership income allocable to                      
          partnership interest B, and, upon the expiration of the term                
          interest, the corporation was entitled to all accrued but unpaid            
          income.                                                                     
               CGF and the CGF Family Trusts contributed cash to the CGF              
          Partnerships in the following amounts in exchange for their                 
          respective term and remainder interests in partnership interest             
          B:                                                                          

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Last modified: May 25, 2011