Document 5DeG0z3MK26Mexybe0K946ZOz

AGREEMENT /- 1 Dccer.:bor 2 3 THIS aGHCS;"EIJT deemed made- at San Carlos, California, \ . 16Q; 1. KELLY-KOCHS FAINT CCKPANx, IRC., a California corporation, hereinafter referred to as K-K, desires to purchase 4 oil of the issued and outstanding preferred and eosstan stock of 5 f aCO TEXTURuj CORPORATION, a California corporation, hereinafter 6 r ;/errc-d tc as PACO from the undersigned owners and holders there 7 , hereinafter individually and jointly referred to as the 8 s.:_-,reiiolcRrs. 9 2, K-K hereby offers tc pay and the undersigned share10 .Vidors hereby individually and jointly agree to sell to K-M all 11 their holdings of preferred or common shares or both of PACO 12 in exchange fer siiares of the sis percent cumulative preferred 13 stock ..f K-M, and such agreement hereby has the approval of PACO 14 iii.TinSS C'irp CHAT ION. 15 o. The preferred shares of K-h shall be valued at par. 16 Hundred Dollars (C100) per share. The book value of the 17 c`j .i_r. and preferred shares of FACG eluli be determined as cf 18 f .center 31, 1X, by the firm of certified public accountants 19 ;.rt.-sQr.tIy representing FACO and shall be in the form of a certified 20 c.;. ir:lor. audit by said firm and shall fee determined by that firm 21 zti acccrdence with sound accounting principles and in accordance 22 23 the method the firm has heretofore applied in preparing the 24 annual statements cf PACO. The shareholdas shall thereafter 25 receive one share cf the K-M One Hundred Dollar ($100) preferred 26 slock valued at One ; i Hundred Dollars ($100) for each One Hundred ft. 1 27 liars of/ value of the shareholders corv.cn and preferred shares 28 cf r.ACC, provided, however, that no fractional shares of K-M 29 preferred stock s-isll be issued, but for cr.y valve leas than One 30 honored Dollars tc which a shareholder may be entitled, cash will 31 bo ;.g1c by K-M to said shareholder or shareholders for such difference. KMX 02210 4. The parties further acknowledge that PACO is and 1 will bo at the tins of consummation of this agreement indebted to 2 certain of it3 shareholders for loans and advances by said share 3 holders fcu 1 AGO anct by way of accrued and accruing bonuses. The 4 pcrtie3 therefore further agree that additional shares of K-M 5 One Hundred foliar ((ICQ) preferret; stock valued as herein set out 6 u 11 he transferred and delivered to said shareholders to whom 7 57CO is indebted in consideration for the cancellation of such 8 ii;,ifL"w-C'dnoT,se3 by said share holders. Ir the event any said share 9 holder-creditor uhr.li be entitled to a fractional share of K-M 10 preferred stock, r:o such fractional share shall be issued, but' 11 :t 17 charehclder-creditor shall receive the value of such fraction 12 13 al share ir. cash fro:.; X-M. . < 14 15. This agreement is mace eubject to the following 15 c.cr.iltione; l! 16 e) That this agreement sir'll meet with the approval of u - T. o "i Nnn a < v Z< i w w* X. 17 tie Commissioner of Corporations of the State of California and 18 arid Commissioner shall issue his permit to K-M authorizing K-M 19 t; issue its One Hundred Dollar six percent preferred stock to the 20 shareholders in accordance herewith, K-M hereby agreeing to forth 21 with take all steps necessary to obtain such permission; 22 o) That the certified opinion audit to be rendered by 23 !v.o certified public accountants pursuant hereto shall reflect a 24 true net, worth of FACO of approximately One Hundred Thousand DollarE 25 (1100,000) and shall meet with the approval in every respect of K-M, 26 6. In executing this agreement EERTiiA A. MACKEY under 27 stands and agres that she is thereby becoming a party hereto both 28 on behalf of the Estate of w. L. Mackey of which she Is executrix 29 and cn behalf of herself as an Individual a3 the sole heir, devisee 30 and legatee of said Estate by the terns of the test Will of W. L. 31 7.cokey, deceased, and that she will be bound by the terras hereof 32 upon distribution of the assets of said Estate, including therein - - KMX 02211 1 the shareholding of said Estate In PACO and the indebtedness of 2 PACO to aaid Estate, to her. 3 7. The parties further hereby agree that this agreement 4 rury be executed in duplicate copies in order to obtain the aigna5 turas of all parties involved and that the signature of any one 6 or s.;ore parties to rny one or mere copies of eeid agreement shall 7 a. denned execution of the original of said agreement in full by 8 ail said parties as though their signatures had been affixed to 9 10 o. The parties hereto agree that any and all fees. 11 coats and expenses of this share transfer and exchange shall be 12 shared eenally by K-K and FAC0 excepting ttiat any transfer taxes 13 erg,-ahlc.- hereunder shall be paid by the corporation whose shares of:14 are being so assessed or taxed upon such transfer or exchange or si!: is upon issuance of shares which may be necessary for the consummation V M < w u ,_ n-reef. "Ns "S5i n n. y w w 7t ~ <" 7. 17 18 19 blTNESi our hands at the date and place first above set KELLY-ftOGEE PAINT CCKFANY, INC. 20 / / 21 22 23 24 25 26 27 28 29 CCiilON 3HAREH0IMRS By, President ' - antvO By ( sn jSj.. Secretary// " /) . PACO TEXTURES CCItF (RATION By 'jT' President .< 4 and . By.. . Secretary ' NINBER CP SHARES 30 ft. f. kc EJEftMEV 31 ' 32 VuF.M R. JOHNS6il / 500 2.500 -3- KMX 02212 5,013 2,500 1,000 8,000 233 NUMBER Cfr1 SHARES 5 25 45 10 31 16 3 KMX 02213