Document 91EaXOObkqgD2aJrvJyLxpEK6

TT- ESCROW AGREEMENT THIS AGREEMENT made and entered Into this 1st day of July, 1949, between 3A Vr-V.'.A'.; BANK AMD TKD3T COMPANY OE SAVANNAH. a bankliv corporation of tho State of Goorgla, herein referred to as "Hacrow Bank", ?. 0. .VARI.STnOM, J. '?. HoISTIRS. J. KARA NY. and THE LIBERTY NATIONAL BAf.K /-ND TRUST COMPANY OR SAVANNAH. JAKES \`U McINTIKE, and JAKES F. SOPLIHAN, JR., an Trustees from Frank 0. 'Vahlatrox, Jr., herein colleotiveiy referred to aa "Majority Stock holders" of Southern States Iron Roofing Cosxpnny, a Georgia corporation, herein referred to aa "Southern States", JOHN SO??, LANE, SPACE a *C CO., INC,, a Goorgia corporation, herein referred to as "Agent for Public Stockholders", and REYNOLDS PETALS COMPANY, a Delaware' corporation, herein referred to aa "Reynolds", 'VliEREAS, ?. 0. -Vahlstroa, J. W, Mclntiro, and Pi. J, Jdohnny have granted an option to Reynolds to purchase a majbnity of the coupon etock of Southern States at $10*00 a share dated June 24, 1949, which became effective July 6, 1949, which cay be exercised by Reynolds at any time up to and including January 1, 1950, for which Reynolds has agreed to-pay to the Majority Stockholders for and in behalf of themselves and all other stockholders who deposit their stock in escrow hereunder, the suns of $150,000.00 which is to bo applied on account of the purchase price if tho option is exeroised; otherwise to be rctninod by the stockholders ratably and in pro portion to their ownership of the stock deposited hereunder for sale to Roynolds, if the option is not exorcised, and, IfsftSAS, pursuant to the terms of said option, tho Majority stockholders have deposited in tho Escrow Bank 163,620 shares of comnon stock of Southom States as follows: TX GARRETT RMC0002016 TX GARRETT Name Ho. of Shares ?. 0. WahlstroB 70,550 J. *f. Mclntire 36,170 J. Mahany 10,900 The Liberty National Bank, Jones 3. Mclhtire, and Janes I' koulihon, Jr, os Trustees for Prank 0. 'Vnhlstrom, Jr. 20,000 153,620 to insure that Reynolds will have available for purchase 5l of the common stock of Southern States in tho event Reynoldsshould exercise its option. K0*7 THBRSPORE, in consideration of the premises and the mutual benefits to bo derived by the parties horeto, it is agreed between all of the parties horeto os followsJ 1. Reynolds has paid to the Majority Stockholders the sum of $150,OCX).00 pursuant to said option agreement. Tho Majority stockholders will deposit said amount with the Kacrow .flank to be held by tho Escrow Bank and distributed a3 hereinafter provided, 2. Johnson, Lore, Jpnco and Co., Inc., as Agent for Fubllc stockholders, will deposit with tho Escrow Sank within three days after August 2, 1949, all cocmon stock of Southern Etatos re ceived by it from the public stockholders in rosponse to its offer of July 6, 1949; a copy of said offer of July 6, 1949, being hereto attached and made a part hereof, to which reference is hereby spodally'made. The Agent for Public Stockholders, in addition to depositing all stock received by it from tho public stockholders, will deposit or cause to bo deposited with the Escrow Eank 26,000 shares of common stock of Southern States of several other large stockholders as follows, which will be available for sale to Reynolds under tho deferred payment plan if the option is exorcised, and which will rotaln its proportionate share of the $150,000.00 paid for tho option if the option is not exercised: - 2- RMC0002017 Naira J4. J. Beasley No. of Sharea 10,000 B. S. Shea 10,000 Joel B 0lbson 6.000 26,000 3. The Escrow Bank will pay to Johnson, Lane, Space and Co., Inc., the sum of $150,000.00 paid by Reynolds for said option, within three days after the Agent for Public Stockholders has deposited with the Escrow Bonk all of the common stock of Southern States received from the public and from the individuals named in paragraph 2 hereof. The stockholders who shall be entitled to said distribution ore (1) public stockholders, and (2) the following stockholders in accordance with the number of shares listed opposite each respective names Home Ho, of Shares F. 0,-Wahlstyom . 50,000 J. 57. Malntire 25,000 '*. J. iiahany 10,000 B. . shea 1Q,000 M. J. Beasley 10,000 Jool B. Gibson 6,000 Trustees for Prank 0, Wohlstroji, Jr. 10.000 121,000 Payment to Johnson, Lane, Space and Co., Inc., by the Escrow Bank shall constitute full end complete compliance by the Escrow Bonk with the terms of this agreement with respect to said $150,000.00, and the duty shall thereupon devolve upon Johnson, Lane, Spaco and Co., Inc., to make distribution of the said $150,000.00 to the public stockholders and to the stockholders named above in this paragraph ratably and in proportion to their respective ownership of said stock, after deducting the agreed charge of Johnson, Lane, Space and Co., Inc, 4. The Escrow Bonk shall return by August 16, 1949, RMC0002018 3 TX GARRETT f all of the common stock of Southern States deposited with it by the Majority Stockholders in excess of the number of shares enumerated opposite their respective names in paragraph 3 hereof, except that in any event the Escrow Bank will retain sufficient shares on deposit to insure that a minimum of 51?i of the outstanding common stock of Southern 3tatea will bo available for purchase by Reynolds. 5. In the event Reynolds shall eloct not to exeralse said option at any time up to and including January 1, 1950, then all stock held by the Escrow Bank shall be released and returned to the stockholders entitled thereto end the funds received by the stock holders in connection with the distribution of the sum of $150,000,00 paid for the option shall be retained by them. Delivery of the common stock deposited by the Agent for Public Stockholdere to the Agent for Public Stockholders shall be full and oonqplete discharge of the duty of the .Escrow Bank in respoot thereto and upon return and delivery of said stock to the Agont for Public Stockholders, the duty shell devolve upon the Agent for Public Stockholders to deliver said stock to the persons entitled thereto. The Keorow Bank shall return to the Majority Stockholders tho stock deposited by them with it in tho event Reynolds shall elect not to exercise said option, 6, In tho event Reynolds ohall eloct to exorcise said option at any time up to and including January 1, 1050, the Escrow Bank shall upon receipt of the funds from Reynolds pay to the Agent for Public Stockholders (1) a sum which added to the proportionate share of $150,000,00 previously distributed will equal at least $10,00 a share for the public stockholders who have eleoted to aocept the cash offer of $10*00 a share, and, (2) pay to the Agent for Public Stockholders 20% of the basic purchase price of $10.00 a share for the public stockholders who have elected to sell their stock on the deferred payment plan* Tho - 4- RMC0002019 TX GARRETT Escrow Bank shall than pay to the stockholders listed in paragraph 3 hereof 20% of the baoic purchase price of $10,00 a share on the 121,000 shares ratably and in proportion to the stockholders named and listed in said paragraph 3 7* In the event the shares of stock acquired from the public stockholders plus the 121,000 shares of stock set forth In paragraph 3 hereof, ore insufficient to insure that Reynolds shall have at least 51# of the common stock of Southern States, then and in such ovent such additional shares aill be made available by Johnson, Lane, Space and Co., Inc., as agent for J. J. Beasley* 8. Upon the exercise of the option by Reynolds, the Escrow Bank shall cause all of the shares delivered to it by the Agent for Public Stockholders and the 121,000 shares listed in paragraph 3 hereof, and such additional shares (if any) that may bo neoeseary to insure that*Reynolds shall have 51% of the common stock of Southern States, to he transferred and issued in the name of Reynolds and shall delivor to Reynolds the number of shares equal to the number of shares acquired from the Agent for Public Stookholdors for $10,00 cash per share, 9 The price to be paid by Reynolds to the Majority Stock holders and to the three stockholders, M. J, Beasley, 3, R, Shea and Joel 3. uibson, for their 121,000 shares as listed in paragraph 3, and to the public stockholders who shall eleot to aacept the de ferred payment purchase plan, shall be $10,00 per share plus the proper prorata part of $277,500*00 which may be payable tinder the provisions of the following schedule. If it is found that during the period of five years, beginning January 1, 1950, and ending December 31, 1954, the quantity of aluminum and aluminum products purchased from Reynolds by Southern States, together with such not profits after taxes, dotorminad in accordance with good.accounting practice, equals or exceeds any of the five combinations of quantities end amounts set forth below* - 5- RMC0002020 TX GARRETT Millions of Pounds Not Profits after taxes Combination No. (1) 150,000,000 together -with % 1,500,000 K (2) or 125,000,000 together with $ 2,250,000 * (3) or 100,000,000 together with $ 5,000,000 n (4) or 75,000,000 together with $ 3,750,000 n o (5) or 50,000,000 together with $ 4,500,000 then Reynolds shall pay said contingent amount of $277,500.00 to the Escrow Bank for distribution among the persona entitled thereto* However, if during such five year period the quantity of aluminum and aluminum products purchased from Reynolds by Southern States coupled with the profits after taxes to Southern States, as set forth hereinabhve, does not equal or exceed any of said combinations of quantities and amounts, Reynolds shall not bo obligated to make any payments in addition to the $10.00 per shore, plus interest, paid by Reynolds for said stock as herein provided. If Reynolds shall elect to exercise said option, then and in that event within thirty days Reynolds shall pay to the Escrow Bank for distribution to the stockholders entitled thereto an amount equal to 20^ of the basic purchase price of $10*00 per sharo for all the shares pur chased by Reynolds from the Majority Stockholders, it* J, Beasley, 3, 2. Shea'-, and Joel B. Gibson, and the shares acquired from the public stockholders and not paid for in cash* Thereupon the Escrow Bank shall release and dolivor to Reynolds certificates evidencing one share of common stook of Southern States for each $10.00 so paid. The ronaining shares purchased by Reynolds shall bo held by the Escrow Bonk subject to this agreement* Reynolds shall pay the balance of the basic purchase price- of said shares of stock in four equal annual Installments together with simple interest at the rate of 4# per annum, payable annually, from the date that Reynolds has 6 RMC0002021 TX GARRETT signified its intention to exorcise the option; the first of such installments of principal and interest to be payable at the expiretion of one year from such date and the remaining three payments successively annually thereafter. Such deferred payments shall be evidenced by promissory notos of Reynolds In form approved by counsel for Reynolds and counsel for the Majority Stockholders. Reynolds, at its option, may on thirty days notice to the holders of the notos anticipate the payment of any or all of said deferred pay ments prior to maturity, and, in such event, shall pay In addition to the principal, interest to the date of payment. In any event the payment in full by Reynolds at any time of the basic price of .10,60 per share shall not affect the obligation of Reynolds to pay the additional contingent amount of $277,500.00, provided any of the combinations of quantities and amounts is met as set forth in the above schedule. Said notes shall be payable at the Savannah Bank and Trust Company of Savannah, Savannah, Georgia, end shall pro vide for acceleration in the event any default is not remedied within thirty days after written demand. Upon each such payment being made, the Escrow Bank shall release and deliver to Reynolds one shore for each $10.00 of principal so paid,- The shores held by the Escrow Bank shall be held as security for the unpaid principal balance of the basic purchase prico of said shares at $10,00 per share, and from tine to time any and all shares in excess of one share for each $10,00 of such unpaid principal balance shall be released and de livered to Reynolds by the Escrow Bank, Should Reynolds default in any of the payments due on account of said unpaid purchase prioo, and should such default not be cured within thirty days after written demand by the Ssorow Bank,- or by any person entitled to pay ment, then the entire balance of the notes secured by the pledge of said stock shall, at tha option of the holders become due and pay able immediately and the respective holders of the notes shall have - 7- RMC0002022 the right to sell or otherwise dispose of the stock pledged as security for the payment of said notes either at public or private sale at not less than the fair value thereof, and apply the net proceeds of such sale to the payment of the indebtedness secured by said notes, and shall account to Reynolds for any surplus remaining after the payment of said indebtedness, and Reynolds hereby authorizes the respective holders of the notes to sign end execute any transfer, conveyance or instrument in writing whether under seal or otherwise which nay be neoessary or lawful to effect the transfer of said stock in the. event of any such sale, all of which nay be done without limiting the right to proceed against Reynolds in an action to recover a money Judgment for any balance which may be due on tho notes. The -Escrow Bank, aftor default, provided the same has not been cured within thirty days after written demand by the Escrow Bank or by any person entitled to payment, -shall upon demand deliver the "stock and the notes secured thereby to the payee or to the holders of said notes. 10 In the event Reynolds shall elect to exeroise tho option, tho Majority Stockholders hereby agree, individually and collectively that they will at any time and from time to time until December 31, 1954, have available for-transfer, and shall on demand of Reynolds transfer to Reynolds at the price of *10.00 per share, such additional shares of tho common stock of Southern States as may be necessary to insure that, despite any convorBion of preferred stock into common stock, Reynolds shall havo and maintain not leas than 5l of the cocuan stock of Southern States outstanding at any time. In order to insure that there will be available to Roynold3 sufficient common stock to comply with this obligation, the Majority Stockholders will cause to be deposited with the Escrow Eonk at least 37,122 additional shares of common stock of Southern States in ouch form as to be transferable upon delivery. Proa tine to time, upon demand of Reynolds as preferred stock may be converted - 8- RMC0002023 into common stock, the Sacrow Bank shall delivor to Reynolds such number of shares of said stock as nay be necessary to enable Reynolds to maintain its ownership of 51/6 of the outstanding common stock of Southern States, upon receipt of satisfactory evidence that Reynolds has paid or tendered $10.00 per share cash for oaoh share of such common stock which is then to he transferred to Reynolds, and that because of the conversion of preferred stock into common stock Reynolds is then entitled to such additional shares of common stock tinder the provisions of this paragraph. The Majority Stockholders hereby agree to cause the Secretary of Southern States to notify Roynolds end the Escrow Bank ixscedlately as preferred stock Is con verted into common stock, If and when additional ah&res of common stock are purchased by Reynolds to maintain its ownership of 61# of the common stock of Southern States, the samo shall be purchased at $10,00 a share for oash, first from the shores of M, j, Beasley, Barth 5. Shea, and Joel B, Gibson, on o prorata basis, and thereafter from the shares of F, 0. ffahlstrom, J, W, Molntire and W J, Mahany an a prorata basis, Ab the preferred stock is retired and cancelled by Southern States, pursuant to the provisions under which the preferred stock was issued, thus reducing the number of shares of common stock necessary to bo held under the terms of this paragraph, the Escrow Bank will release said shares of Btock in proportion to the retirement of the preferred stock, so that thore will remain in the hands of the Escrow Bank only a sufficient number of shares of common stock to insure that, despite any past or future conversion of preferred stock into common stock, Roynolds shall be in a position to have and maintain not less than 61# of the common stock- of Southern States outstanding at any time by the purchase from the shares of stock so held by the Escrow Bank under this paragraph, of stock at $10.00 cash per share'. - 9- RMC0002024 TX GARRETT 11 The parties agree that the registered owners of all of the stock deposited with the Escrow Bank under the terms of this agreement shall be entitled to all dividends accruing on and shall have rights of every character with respect to all shares of stock which may be held by the Esorow Bonk and that in the event Reynolds shall exercise this option* thereafter Reynolds shall be entitled to all dividends accruing on and shall have all rights of every character with rospect to all shores of stock which may be held by the Escrow Bonk* except in respect to those shares of stock deposited with the Escrow Bank by the Majority Stockholders to provide that Reynolds may maintain control dospite any conversions of preferred stock into common stock. 12. It is understood and agreed that if during the period between June 24, 1640* end January 1* 1650* Southern States has purchased from Reynolds at least 15*000*000 pounds of.aluminum coil and other aluminum products and does not have in its inventories on January 1* 1950, more than 4*000*000 pounds of aluminum either in coil for roofing or formed into roofing* including all auoh materials then on consignment* by Southom States to dealers and others* then Reynolds will pay an additional $150*000.00 on account of the purohase price of Southern States common stock* in which event said sum will be distributed ratably and proportionately among all stockholders who have deposited their stock hereunder. 15. In the event Reynolds exercises'the option to buy at least 51J$ of the common stook of Southern States* it is hereby agreed that Reynolde within ten days after the option is exercised will pay Johnson, Lane* Space and Co,* Inc,* the sum of $10*000,00 in full for their serviced to Reynolds in this transaction* which shall bo In lieu of commissions and reimbursement for expenses. IH WITNESS WITSRSOF. the parties have each hereunto set - 10 - RMC0002025 their respective hands and seela on the day and year first above written. / SAVANNAH BANK AND TRUST COMPANY OF SAVANNAH By b/ Reuben Clark______ ATTEST* President \ a/ John F ftollbrook \ Aoat. 5ashier ) (Corporate Seal) a/ F. 0, Wahla trom________ (LS)' F. 0. Wahlatrom a/ Jamos U. Molntire______ (LS) <1. Molntire s/ N. J Mahany(LS) W* J* Mahany LIBERTY NATIONAL BANE AND TRUST COMPANY OF SAVANNAH By a/ C S, Sanford President ATTEST* a/ H, H. Grady Aaet, Caahior (Corporate Seal) ______ a/ James N, Mein tire " Jamea Me In tire a/ Jamea P. Houlihan. Jr._______ J James P. Houlihan I Jr. Aa Trustees for Frank 0. Nahlstrom, Jr, JOHNSON-, LAKE, SPACE AND CO., me. sy_ a/ Thomas M. Johnson President ATT23T; a/ Allen Crawford Secretary ------ tCorporate seal) REYNOLDS METALS COMPANY By a/ R. 3 Roynolda, Jr. President ATTEST: b/ Allyn Dillard______________ Secretary (Corporate Seal) TX GARRETT RMC0002026