Exhibit,Appendix: ROBERT ROSS et al VS. C.C. MOORE & CO. ENGINEERS

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                                BENNETT, SAMUELSEN,

PARKWAY, SUITE 300
ALAMBDA,'CA 94501-1084
(519) 444-7688

JOHN G. COWPERTHWAITE, CSB# 96375
BENNETT, SAMUELSEN, REYNOLDS & ALLARD

A Professional Corporation ELECTRONICALLY
Attorneys at Law FILED
1301 Marina Village Parkway, Suite 300 Superior Court of California,
Alameda, California 94501-1084 County of San Francisco
Telephone: (510) 444-7688 MAR 22 2013

Facsimile: (510) 444-5849 Clerk of the Court

BY: WILLIAM TRUPEK
Attorneys for Defendant
SLAKEY BROTHERS, INC. Pepuly Clerk

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF SAN FRANCISCO

ROBERT ROSS and JEAN ROSS, NO. CGC-10-275731
Plaintiffs,
EXHIBIT F
vs.
Date: May 14, 2013
C.C. MOORE & CO., ENGINEERS, et al., Time: 9:30am.
Dept: 503
Defendants.

{ Trial Date: June 10, 2013arene HENRY. W.HOWARD = ANU ArY Bp 1 994 ve

m WN

n

IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE CITY AND COUNTY OF SAN FRANCISCO

ANNAH K. COE, et al.,

Plaintiffs,

}
}
}
)
vs. } No. 948,807
)
OWENS-CORNING FIBERGLAS )
CORPORATION, et al.; )
}
Defendants. )
)
CERTIFIED COPY |

DEPOSTTION OF HENRY W. HOWARD
Thursday, January 6, 1994

Reported by:
FREDERIC R. TOOKER, CSR #890
Registered Professional Reporter

TOOKER & ANTZ
CERTIFIED SHORTHAND REPORTERS ©
131 STEUART STREET, SUITE 201

SAN FRANCISCO, CALIFORNIA 94105

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650a uw & Ww hy Fe

oven HE BNR Wig HOWAR Dorcel = “4.D-9. bo

I-N-D-B-X

DEPOSITION OF HENRY W. HOWARD PAGE
Examination by Mr. Hand 5
PLAINTIFFS' EXHIBITS (HOWARD): IDEN.
1-A Notice of Taking Deposition 6
i-B Notice of Rescheduling Deposition 6
2 Letter dated 3-6-56 to "Messrs.

Slakey” from Mr. Howard 16
3 Memorandum Agreement 30

---000--—

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650a HENRY WW. HOWARD. JANUARY Ged OOM eres

BE IT REMEMBERED THAT, pursuant to Notice of
Taking of Deposition, and cn Thursday, January 6, 1994,
commencing at the hour of 10:15 a.m. thereof, at the
offices of Tooker & Antz, Certified Shorthand Reporters,
131 Steuart Street, Suite 201, San Francisco, California
94105, before me, FREDERIC R. TOOKBR, duly authorized to
administer oaths pursuant to Section 2093(b) of the

California Code of Civil Procedure, personally appeared

HENRY W. HOWARD,

called as a witness by the plaintiffs, and the said
witness, being by me first duly sworn, was thereupon

examined and testified as is hereinafter set forth.

LAW OFFICES OF JEFFREY B. HARRISON, One
Daniel Burnham Court, Suite 220-C, San Francisco,
California 94109, represented by JAMES L. HAND, Esq.,
appeared as counsel on behalf of the Plaintiffs.

LAW OFFICES OF BENNETT, SAMUELSEN, REYNOLDS &
ALLARD, 1951 Webster Street, Suite 200, Oakland,
California 94612-2909, represented by RICHARD L.
REYNOLDS, Esq.,

~ And -

LAW OFFICES OF HOWARD, RICE, NEMBEROVSKI,

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650HENRY EOWARD= oa

pots

HENRY W. HOWARD,

being duly sworn, testified as follows:

EXAMINATION BY MR. HAND

MR. HAND: ©. Would you please state your

name?

A. Henry W. Howard.

Q. Mr. Howard, you were a practicing attorney in

California for a number of years; is that correct?

A. 44 years.

Q. And you're presently retired?

A. Uh-huh (affirmative). Yes.

QO. I was about to remind you that answers have

to be audible, for purposes of the court reporter.

You

have been retired for a few years, and one may forget

some of these things, joyously.

If anything comes up, I will remind you from

time to time of some of our deposition requirements,

Iomay be so presumptuous.
How long have you been retired?
A. Since --
MR. ROBERTSON: 88,

THE WITNESS: -- March 1, '88.

MR. HAND: OQ. Is your health sufficient

it

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES

(415) 392-0650HENRY HOWARD

24

25

today that you feel you can give a meaningful

deposition?
A. Yes.
Q. You are very soft-spoken. You will have to

keep your voice up a little bit for all of us, if you
don't mind. Okay?
A. All right.

MR. HAND: Let me attach as Plaintiffs' first
exhibit to the deposition a copy of the Deposition
Notice and a copy of the Notice of Rescheduling of
Deposition.

Those will be Exhibits 1-A and 1-B.

(Whereupon, Plaintiffs' Exhibits 1-A and 1-B
were marked for identification.)

(Discussion off the record.)

MR. HAND: Q. Mr. Howard, you were engaged
im active practice in San Francisco from approximately
1947 to 1990; is that correct?

A. 1988.
Q. "88.

And you were founder of the firm of Howard,
Rice, Nemerovski, Canady, Robertson, Falk & Rabkin; is
that correct?

A. Right.

Q. And Mr. Robertson is here representing you

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650in their business pursuits.

THE WITNESS: Well, I represented -- I was
employed by Roger initially, and represented him and his
various business. operations.

After the business was divided, I did not
represent Bill.

MR. HAND: OQ. Mr. Howard, I have asked you
to review a declaration that you signed on November 17,

1993, in support of a Motion for Summary Judgment that

was filed in the case entitled "Coe versus Owens-Corning
Fiberglas, et al."
Have you looked at that declaration this

morning?

A. Yes.

Q. Is there anything in that declaration that
you presently believe is inaccurate?

A. No.

QO. In 1956, you advised Roger and Bill, and they

agreed, that four new corporations would be formed, to
wit: Slakey Brothers Sacramento, Inc.; Slakey Brothers

Modesto, Inc.; Slakey Brothers Oakland, Inc.; and Slakey

Brothers San Jose, Inc.?
A. That is correct.
Q. And you structured this formation of the new

corporations such that the assets and business of the

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650_ZENRY.W.... HOWARD ~_January. 61994.

attorney-client privilege in this anymore, but anybody
who might that we have been able to contact has waived
it. So that is why it is produced here with respect to
this document only. And that dees contain some
reference to current assets, fixed assets, liabilities
and et cetera.

MR. HAND: Give me a moment to look at it,
Richard.

MR. REYNOLDS: It's only four pages of easily
understood financial data.

MR. HAND: Let's go off the record just a
moment.

(Short pause in deposition.}

MR. HAND: O. Mr. Howard, what we have just
been looking at over the break is a letter from you
dated March 6, 1956, to William Slakey and Roger Slakey,
and I will mark this, then, as Plaintiffs' next in
order.

(Whereupon, Plaintiffs! Exhibit 2 was marked
for identification.)

MR. HAND: This is Exhibit 2.

QO. This letter is a photocopy of what looks like
a file copy, and there is no signature on it, but, to
the best of your recollection, Mr. Howard, is this a

letter that you sent to Bill Slakey and Roger Slakey?

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650

16ane ENB YW _HOWARD...=_ January. 6,1994_

A. Yes.
Q. The handwriting that's on the letter, do you

recognize that handwriting?

A. T don't recognize that handwriting.

Q. In Paragraph 1 on Page 2?

A. Paragraph 1, Page 2?

Q. Yes. it refers to an entity to be known as

“Slakey Brothers Corporation of Sacramento," but, in
fact, the subsidiary that was formed was called "Slakey
Brothers, Inc." -- no, "Slakey Brothers Sacramento
Tne."?

Do you recall why the name of "Slakey
Brothers Corporation of Sacramento” was not used?

MR. REYNOLDS: As opposed to "Slakey Brothers
Sacramento, Inc.™?

THE WITNESS: It's an error.

MR. HAND: QO. I am sorry?

A. Just an error, I would think. It was "Slakey
Brothers Sacramento, Inc." That was the correct name.
Oo. Now, this letter, on Page 2, refers to the

subsidiaries receiving certain liabilities of Slakey
Brothers, Inc. And toward the bottom of that page there
is a schedule that summarizes the assets and summarizes
the liabilities.

For Slakey Brothers Sacramento, for instance,

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650 .

1?aL

12

Based on your practice at that time, do you
believe that you would have urged Bill and Reger Slakey
to obtain the creditors' formal agreement to transfer
the liabilities to their respective subsidiaries?

Or would it, on the other hand, have just

been a matter that Slakey Brothers, Inec., would still

formally be liable to the creditor; it's just as between
Slakey Brothers, Inc., and Slakey Brothers Sacramento,
it was supposed to be Sacramento that would pay the
bill?

A. Well, my assumption at the time was that they
were separating completely, and they accounted for
their -- independently for their own books and records.
So I assume ~- I mean, that function became independent
in each branch. They had their --

They paid their own accounts payable, handled
all their accounts separately, but I don't remember a
specific question being discussed about it.

Q. These liabilities of Slakey Brothers, Inc.,
that were being assumed by the four new subsidiaries,
they totaled approximately one and a half million
dollars. So my question is:

Based on your recollection of your practice
at the time, in the '50s, and your relationship with

these particular clients, do you believe that you would

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650

22A. Yes.

QO. -- it refers to the parent corporation
veceiving a substantial income from rentals and from
service functions, and, therefore, it was your law
firm's opinion that there would not be a danger of
Slakey Brothers, Inc., being classified as a personal
holding company under Section 541, et seq, of the
Internal Revenue Code.

Do you see that paragraph there?

A. Uh-huh (affirmative).

Q. Does that help refresh your recollection at
all as to why the parent corporation retained title to
land and buildings in Sacramento that were being used by
Slakey Brothers Sacramento, Inc.?

A. I just don't have a current clear
recollection of what happened with respect to that
property.

QO. In 1963, Mr. Howard, Slakey Brothers, Inc.,

was dissolved; is that correct?

A. I think that was true, yes.
Q. And your declaration states that -- and this
is in Paragraph 7 -- "At the time of dissolution, the

sole assets of Slakey Brothers, Inc., consisted of the
stock of the operating subsidiaries."

And that is your recollection today; is that

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650

26A. That's my recollection.

Q. Now, this dissolution resulted in the
distribution of Slakey Brothers, Inc.'s,. assets, which
were limited to the shares in the subsidiaries to the
vespective Slakey family members, correct?

A. That is my recollection.

Q. And that also was a tax-free distribution; is

that correct?

A, That's right.

Q. What was your term, as best you can recall,
for that type of a tax-free reorganization?

A. Well, I think we referred to it as a 355
distribution. The numbers are all different now, but
that is what they were called in those days.

Q. Do you have any recollection -~

Strike that.

As best you can recall, in a 355
reorganization, or Gistribution, what would happen to
the liabilities of the company being dissolved, as a
matter of corporate law?

MR. REYNOLDS: I think the question is vague
and ambiguous.

MR. HAND: Do you have any recollection one

way or the other as to what the law was at the time?

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
{415) 392-0650wWooON

oo i ORD danuary bp b094=

Sacramento, I think, but I didn't visit the Oakland
branches, that I recall.

Q. In the motion that was filed for summary
judgment’ in this case, as Exhibit E, there was a
document produced entitled "Memorandum Agreement.”

I will mark this, then, as Exhibit 3 to the
deposition.

MR. REYNOLDS: That is June 15, 1962?

MR. HAND: Correct.

(Whereupon, Plaintiffs’ Exhibit 3 was marked
for identification.)

MR. HAND: ©. Why don't you take a moment to
look through that? In particular, what I am focusing
on, Mr. Howard, is Paragraph No. 6, which is on the

fourth page.

A. {Examining exhibit.)
Q. All I am asking about at this moment -~-
AL Let me get to it, here,

Sure. Sure. Sure.

A. Did T do all this stuff?

Q. Yes, you did it all. You did a good job.
All for $5,000.

A. I think I got an extra fee for this.

QO. Good. Why don't you let me take a moment to

ask the question, so you can focus what you are looking

TOOKER & ANTZ COURT REPORTING & VIDEO SERVICES
(415) 392-0650

30CERTIFICATE OF DEPOSITION OFFICER

i, FREDERIC R. TOOKER, CSR No. 890, duly
authorized to administer oaths pursuant to Section
2093(b) of the California Code of Civil Procedure,
hereby certify that at the commencement of the foregoing
deposition, the witness stated he or she would testify
the truth, the whole truth, and nothing but the truth in
the within-entitled cause; that said deposition was
taken at the time and place therein stated; that the
testimony of said witness was reported by me and was
thereafter transcribed under my direction into
typewriting by computer; that the foregoing is a full,
complete and true record of such testimony; and that the
witness was given an opportunity to read and correct
said deposition, and to subscribe the same.

I FURTHER CERTIFY that I am not of counsel or
attorney for either or any of the parties in the
foregoing deposition and caption named, nor in any way
interested in the outcome of the cause named in said

caption.

DEPOSITION OFFICER
i hereby certify this copy is

a true and exact copy of the original

of, Late I Cle. einen
DEDOSTTION’ OFFICER

TOOKER & ANTZ - (415) 392-0650HENRY W. HOWARD
ATTOGNES at Lav
i suvrer staet
BAN FRANCISCO 4

DOUELNe a at83

March 6, 1956,

Mr. William Slakey

c/o Slakey Bros,, Inc.

P. O. Box 2145 - Fitchburg Station
Oakland, California

Mr. Roger Slakey

c/o Slakey Bros., Inc.
P. O,. Box 1048
Sacramento, California

Dear Messrs. Slakey:

With respect to the subject matt
terday in my office, and our subseque
we propose that a plan of reorgan:
be adopted embracing substantial,

I.
Astence but its functions roy bdéldings will be limit-
ed in the following respe

of:

& you used in
connec in the Sacremento

(2) Cash on hand sufficient to meet its
nt obligations }{(other than those to be
corporations) and to

Pinmanc& 1¢ mS as outlined below,
(3) sh ender value of insurance policies
on lives of Officers, organization expense and

deferred expense, (assied sEre urns the Care
(4) Stock in operating subsidiary corporations.

(b} The functions of the corporation and sources of
Aancome will include the following:Page 2. Messrs. Slakey. March 6, 1956.

(2) The maintenance, management and rental of
4ts real property holéings in Secrementoc. These
properties will be leased to a new operating com-
pany hereinafter described, to be known es Slakey
Bros. Corporation of Sacramento, upon terms and
conditions similar to those prevailing in the
open market in the Sacramento area.

_ (2) The rendering of management, promotional, Crath thie:
puying and miscellaneous services to its operating cucu d ey
subsidiaries on a fee basis, said fees to be commen-Yin efi
purate with the reasonable value of services render
ed, including an appropriate margin of profit.

(3) he lending of its funds or credit to its Frenne
operating subsidiary corporations to the extent eileen

the same may from time to time be required. Be f4e. Cox,

(4) The receipt of dividends on the stock of
said subsidiary corporations when, as, and if
declared and paid.

It. The parent corporetion will cause to be organized
four subsidiary corporations {one for each operating division)
to which its operating assets, other than land and buildings in -
Sacramento, will be transferred. Assuming transfer is made upon
the basis of present divisional accounting, the assets ang ilile-
bilities of the new corporationsvould be approximately as follows:

Silakey Slakey Slekey Slakey
Bros. Broe. Bros. Bros.
Sacramento Oakland San Jose Modesto
Current Assets $860,937.25 $793372.22 $524030.01 $313,692.24
Fined Assets 21,798.24 43282 .68 2e5214.98 6,910.09
Mice. Assets and . . . :

piferrec Charges 2,487.22 9436.92 €92.55 395.75
Total Assets 885,222.73 &46091.81 549937.54 314,779.07

Current Liabilities £28,556.47 405081.67 243703.47 211,166.95
Idabilities to

Officers 4, 557.5€  12643.25 7019.55 __ 5,663.50

otal Liabilities 543,104.05 417725.82 _250723.02 216,830.45

Capital $342,118.68 428365 .99 $2g92ik 52 & 97,048.62

We Manic- Page 3. Messrs. Slakey. March 6, 1956.

Distribution may however be made upon any basis which
would reasonably conform to the purposes underlying the re-
organization. The foregoing would leave in the hands of the
parent corporation the assets enumerated under Paragraph
I{a}(1) abeve, subject to liabilities. We have not attempted
to trace or allocate the proceeds of secured borrowing. 8

Ill. The foregoing assets will be transferred in exr-
change for the stock of the operating subsidiaries, the capital
structure of which should in our opinion include the following
authorized issues: .

One third $10.00 par value common voting stock
One Third $10.00 par value common non-voting stock
One third $10.00 par value non-voting cumulative

preferred, dividends, redemption rights,
etc. to be fixed by the Board of
Directors at the time of issue;

or such combination of the foregoing as may be deemed expedient
in each situation.

The stock of the new corporations shall remain in the
hands of the parent wmtil such time as a plan of distribution
to shareholders may be adopted conforming to the requirements of
Section 355(a)(2)(C) of the Internal Revenue Code of 1954, aha
having as ita object the placing of ownership or control of
substantially all of the shares of 2 specific corporation in the
hands of a single stockholder or group of stockholders of the -
parent.

Ivy. Tax Consideretions:

(1) The foregoing plan of reorganization will be cerried
out in conformance with Section 368 cf the Internal Revenue Code
of 1954 end related sections. Since increased operating effice
dency, better civisionel control and locelization cf immediate
management responsibility ere its underlying purposes, the
reorganization will not result in the re@lization of gain or loss
to the parent corporetion nor to its shareholders.

(2) For the same reason each corporation, including the
perent, will be entitled t6 the benefits of the $25,000.00 surtex
exemption accorded by the Internal Revenue Code. On the basis of
present operations, accordingly, income taxes at surtex rates
(52%) should be entirely eliminated.oN

Page 4.) Mesers. Slakey. March 6, 1956.

(3) Dividends paid by the operating companies to the
parent will be excludible from the income of the perent to
the extent of 85% thereor because of the dividend received
credit allowed corporations by the law. Thus the effective
normal tax rate on these dividends will be 4.5% and the sur—
tex rate, 7-8. In our opinion, however, in view of the
operating capital requirements of the business, there is no

(4) Sinee the parent corporation will receive a sub~ ¢ fe,
stantial income from rentels and from service fimetions, we do i<
not believe there is any dnager of its classification ag & SH
personal holding company under Section 541, et Beq., of the Code.

With regard to our compensation for services rendered and
to be rendered din this matter, it is our Pequest that you pey us
& retainer fee at this time in the amount of $1,750.00, and we
have accordingly enclosed a@ statement in that amount. The
balance of our compensation, which would be peyable at the con-
clusion of the undertaking, would depend on whether or not you
desired us to carry out and implement the Plan which we will
formulate,

in any event, our work will include the Guafting of a
formal plan of reorganization and éppropriate corporate minutes
to authorize the Same, the working out of the financial details
of the transfers to take place with You and your accountants,

situation, and the resolution of technical problems which will
avise from time to time in the carrying out of the Plan. if
our responsibilities are to end here, we would think thet 2
total fee af $3500 00, against which the retainer would apply,
Would be éppropriate,

if you desire us to pe of the corporate work
quired to actually carrr out ¥e would sugg
to An ‘the amounc of $5, 00, « in that event, af course,
your firm would bear such costs ag the fees of the Corporation
Commissioner and Secretary of State es may be incurred. These
will approximate £850.00.

Please let me imow of your desires in the meatier.

Sincerely yours >

EWE srw
Enel.

nv-KEMORAMDOM ACHERHEET

Agresment dated this 15th day of June. Ls
1962, by and between ROGER L, SIAKEY end AZEIE MARIE BLAKEY,
ard WILLIAM H, SLAKEY and ORORGIA E. SLAKEY, as follows:

WREREAS, Slakey Reothers, Inc.,is a California cor
poration organized on the 2ist day of Setebsr, 1946, for the
purpess of acquiring the business theretcfore owned and
oparated by William H. Slabey and Roger L, Slakay, doing business
Be copartisra under the firm nema and style of “Slakey Brothers,
cm,", and aonsisting primrily of the sale and distribution of.
vholetals pluxbing, heating and alr bondittoning equipment ia
Hortharn California; and ~

. WEEREAS, the common stock of Slakey Brothers, Inc.
wan inmued in equal shares to William FH. Blakey and Roger 1.
Blskey in exchenge for their interests in the predecesbos
partnership; asd ,
KERREAS, William H, Slakey resided in or nee
Caklarmt, California, and contimed to asiums the supervisory
_wesponsibility for the operations meintained in the Cakland and
San Joss areas, wolle Roger L. Slakey reaided in Sacramento,
California, ant contimed to asmme the managewent and responsi~
bilities in the Sacramento and Modesto areas; and
WHEREAS, on March 12, 1956, a plun of reorganisation
RRE proposed by Blakey Brothers, Im, whereby four new conpora-
tions would be formed by Slakey Brothers, Ino, for the purpose
of talcing over the four operating divisions of the corporntion
as of April 1, 1956; and
WHEREAS, in furthberanse of the plan of reorganization,
there was formed on April 16, 1956, the four cerporations in

adethe Btate of California, as follows; Slaley Ecothers Sscrmsento,
Inc., Slakey Brothers San Jose, Inc,, Slakey Brothers Modesto,
Ine,, and Slakey Beothers Oakland, Inc.) and
, WHEREAS, the awsuta and linbilitiss which related to
the businesses carried on within the geographic aren of a specitic
‘eorporation were transferred to thet sorporation in exchange for
common Book ef the corporation; amt

KHEREAS, after the transfer, the newly created corpora

tone consisted  iof wholly owned subsidiaries of Blakey Brothers,
Inc, and the only other major assets owned by Slakey Brothers,
Ins, consisted of real property which wes thereafter partially
leased to Slxkey Hrotherr Sacramento, Ins. for wee in ite whole-
sale pluxbing supply operation in that areny and

WHEREAS, the present shareholders of the verious
subsidiaries, as well as those of Slakey Brothers, Inc., bre
further described in Schedule “A" attached hereto} and
: WHEREAS, on Zameary 31, 1957, each of the four
mubsidiary companies independently adopted 2 Stock Bomus Plan
for the benefit of its own key executives for the purposes of en-
courtging the efforts of the key mon and their oontimed
assootation with the companys; and

WHEREAS, sinee the adoption of the Stock Bonus Pian
a substantial masber of shares of Class A Voting Coumon Stock of
the various subsidiaries have been issued to the senager of the
yaspective corporation; and

WHEREAS, all Class A Cowmon aheres of the various
corporations held by shareholders otber than Slmbey Erethere, Ino,
ware acquired in thin manners and

WHEREAS, & qualified refit Sharing Plan wur adopted
by Slakey Hrothera, Inc. on September 30, 1953, and each of the
subsidiary ocupanies elected to partioipate in said Profit Sharing
Plan} end

“2os

WHEREAS, from time to tina the Tpofit Sharing ‘tuet
invested a portion pf its Renets in Preferred Stock of various
subsidiaries and xt the present time all the Preferred Stook
of subsidiaries which ts outstanding is held by the Profit
Sharing trust) and

MHEREAS, on February 7, 1958, Slakay Jeothers Redding,
noes a California corporation, was formed and wll of fis Common
Stock wat acquired by Blakey Brothers Sacrauento, Ine, for eashy
and

/ NEEREAS, the cash was used by the Redding eszporation
fo moquire an existing wholesale phasbing supply business Located
and operating within the ara of Redding, Cantfornia; and

WIEREAS, the Common Stock presently held by Blaloey
Brothers Sacremento, Ina, constitutes 211 ef the oxbwtending

stock of Slukey Brothera Redding, Tne.) and

WHEREAS, commencing in tha year 1958, Roger L., Slakey

ant Willies x, Sinkey inttisted a program of making awmal gitts

to their individual families Sontinting of Class B Comton tock
held by then in Sinkey Brothers, Ine.; and
WHEREAS, all of thr stock presently held by members
of either fmmily, az indicated by Schedule me, Were aoqu ined.
an this manner)
HOM, THRAEPORE, the parties agree that they wil |
undertalce the following in the onder stated:
3+ Eo omuse to be declared and paid by Blakey
Brothers Sacrmmanto, Ina, a oash dividend to ite Class
A and Clase B Oomson abareholdars egal. to 1.58603
dollars per share or a total cash dividend of $77,684.00,
2, 70 enune to be declared amd paid by Alakey .
Brothers Modezto, Inc, a cash aividend to ita Class A
and Class 3 Comson sharsholders equal to 3.76837 dollars
per share or a total oxsh dividend of #60,000,00,

wy(

3. To cmuse 21) of the Class 3B Common Stock
of Slakey Beothers Oakland, Ine, and Blaley Brothers
Suoramento, Inc, to be surrendered to Stakey Brothers,
Jno, in exchanges for Clase A Comuon Stool of the
Gcepaniss on & phere tor ‘share bagie pursuant to a
tax free plan of recapibditestion,

4, %o omipa the Artioles of Incorporation of
Slakey Brothers 3an Jose, Inc., Biadory Brothers
Modesto, Inc., Slakey Brothers Oakled, Ino, and
Slakey Brothers Sacramento, Inc, to be amended, to pre-
vide for voting rights to the preferred atosk of
said companies and to change the par value of sald
Preferred Stosk trom $10.00 per share to $100.00 par
share, ,

5. To modity the Preferences, privileges and
righta of the Preferred Stock to reflect the changs in
the par value and voting rights of the xtock,

6. To cause to be contributed to the capital
of Slakey Brothers Cakland, Inc. 2ll of the assets
of Slakey Brothers, Inc. (except the dnvestments of
Common Stock in its mbsidiartes) subjeat to its
liabilities as reflected in its financial statenent
em the date dimedintely following the date en vhish
the dividends requived in parweraphs 1 and 2 above
are reocived. Said transfer is to be made by Dlakey
Brotiers, Ino, pursuant to the provisions of Section
352 (a) of the 195% Internal Revenze Code, and Slaiey
Brothers Osklant, Ina. will issue in exchange there
ter abhares of dts Class A Comaon Stock baring
Bn Aggregate par value equal to the net book value
of the asksta received trom Slakey Brothers, Inc,

7+ Yo causes the liquidation of Slakey Hoothers,Stock of Slakey Brothers San Yous, Ine., Slakey Brothers
Saeramento, Ins,, Blakey Brothers Redding, Ino., and
Slakey Brothers Modesto, Ine., a3 pet forth in Schedule
"B" attached herete and made a part hereor,

&. The partion will undertake to kaye ‘thled wktn

9. The parties will undertake to have riled the
hecensary axendsents to the Artioles ef Tneorporation,
Applisations for Permits to Lame wtock, amd the obtaining
of consents from the Bharwholdera of Blakey Brothers, Ine,
ard the four mibsidiawtes to this axreement,

20. To caune the Siakey Brothers, Ine, Profit
Staring Plan to ba meena to permit the continued par
tiodpation on a joint basis ef the Subsidiaries in seid

TX KOOHESS woERROP, che parties hereto have aimedthis agreement the day and year first hereinabove written.

Roger L, Slakey

Roger i, Blakey

Abbie Marie Slakey
Abbie Karle Siakey

Willian H. Slakey
Willie Ey Sinkey

Georgia E. Slakey
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