SHAREHOLDERS LOAN AGREEMENT
AGREEMENT made effective the 30th day of December, 1990, by and
between X.X. XXXXX INCORPORATED, a Delaware corporation with its principal
office at 000 Xxxxxxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx (hereinafter the
"Corporation"); XXXXXXX XXXXXX, residing in Newburgh, New York ("Xxxxxx"), and
XXXX X. XXXXXX, residing in Brigantine, New Jersey ("Xxxxxx"), the
Shareholders of the corporation, (hereinafter individually referred to by name
and collectively the "Shareholders").
WHEREAS, the Corporation is an "S" corporation, and
WHEREAS, the Shareholders have loaned money to the Corporation, and
WHEREAS, the Shareholders and the Corporation wish to set forth their
understanding with respect to these loans, and
WHEREAS, the Corporation is authorized to enter into this Agreement
by a corporate resolution adopted by a resolution of the Directors at a
meeting held on the 21st day of May, 1992.
NOW, THEREFORE, it is agreed:
1. S CORPORATION STATUS. The Corporation and Shareholders made an
election for the Corporation to be taxed as a "small business corporation"
under subchapter S of the Internal Revenue Code of 1986, as amended (the
"Code").
2. LOAN TO CORPORATION. The Shareholders have each loaned to the
Corporation the following amounts representing salaries received by them from
the Corporation up to the date of this Agreement:
Shareholder Amount
----------------- ------------
Xxxxxxx Xxxxxx $1,454,857.38 *see attached schedule
Xxxx X. Xxxxxx $1,454,857.38
The Shareholders intend to continue making loans to the Corporation
of their respective salaries received by them from the Corporation less
sufficient sums to pay all taxes, and it is their intent and the intent of the
Corporation that such loans be made subject to the terms of this Agreement.
3. INTEREST ON LOAN. The Corporation shall periodically pay to the
Shareholders, but not less often than annually, interest on their outstanding
loan amounts at the rate equal to that paid by the Corporation to its outside
lenders.
4. REPAYMENT OF LOAN. The Corporation shall repay the entire
principal of the loan outstanding to both Shareholders, together with accrued
but unpaid interest to the date of repayment, upon the written demand of
either Shareholder.
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5. BENEFIT. This Agreement shall be binding upon and shall operate
for the benefit of the Shareholders and their respective distributees,
executors and administrators.
6. NOTICE. Whenever under this Agreement notice is required to be
given, it shall be given in writing and shall be deemed to have been given on
the date such notice is posted in a United States postal drop, postage
prepaid, by certified or registered mailing, return receipt requested, to the
Shareholders or the Corporation at the address of record with the Corporation
or at such other address as the parties may from time to time designate with
the Corporation.
7. TERMINATION. This Agreement shall cease and terminate upon the
occurrence of any of the following events, namely:
(a) The unanimous consent of all the Shareholders, at which
time the entire unpaid principal and accrued interest shall be repaid to the
Shareholders.
(b) Upon the Corporation becoming a public company with its
stock sold on a nationally recognized stock exchange, at which time the entire
unpaid principal and accrued interest shall be repaid to the Shareholders.
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8. AMENDMENT. This Agreement may only be amended by the unanimous
consent of the Shareholders.
9. WAIVER OF BREACH. No forbearance to exercise any rights or
privileges under this Agreement, or waiver of any breach or any of its terms
shall be construed as a waiver of any such terms, rights or privileges, but the
same shall continue and shall remain in full force and effect the same as if no
forbearance or waiver had occurred.
10. CONSTRUCTION. This Agreement shall be construed and governed in all
respects pursuant to and under the laws of the State of New York. All references
in this Agreement which are made to the masculine gender shall be deemed to
include the feminine.
11. COOPERATION OF PARTIES. Each of the parties hereto agrees to
execute and deliver such other instruments, certificates or documents which may
be reasonably required to carry the full purpose and intent of this Agreement
into effect.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties hereto with respect to the matters covered herein, and it
may not be altered, modified or extended nor any of its provisions waived,
except by a document in writing.
13. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which when executed shall be deemed to be an original, and
such counterparts shall, together, constitute and be one and the same
instrument.
14. ILLEGALITY. Should any provision or provisions of this Agreement
be held to be illegal or unenforceable, then the balance of this Agreement
shall, nevertheless, remain in full force and effect, irrespective of the
importance of any provision or provisions which may be so held to be illegal or
unenforceable.
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15. HEADINGS. The headings used herein are inserted for convenience
only, and in no way define, limit or prescribe the intent of this Agreement.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first above written.
/s/ XXXXXXX XXXXXX
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XXXXXXX XXXXXX
/s/ XXXX X. XXXXXX
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XXXX X. XXXXXX
(SEAL)
(Attest) X.X. XXXXX INCORPORATED
/s/ XXXXX XXXXXX XXXXXXXXXX /s/ XXXX X. XXXXXX
---------------------------------- ----------------------------------
XXXXX XXXXXX XXXXXXXXXX, XXXX X. XXXXXX, President
Secretary
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STATE OF NJ )
) ss:
COUNTY OF CAMDEN )
On the 30th day of May, 1992, before me personally came XXXXXXX XXXXXX,
to me known to be the individual described in and who executed the foregoing
instrument and acknowledged to me that he executed same.
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Notary Public
Xxxxxx X. Xxxx, Xx.
Notary Public of New Jersey
My Commission Expires
March 18, 0000
XXXXX XX XX )
) ss:
COUNTY OF CAMDEN )
On the 30th day of May, 1992, before me personally came XXXX X. XXXXXX,
to me known to be the individual described in and who executed the foregoing
instrument and acknowledged to me that he executed same.
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Notary Public
Xxxxxx X. Xxxx, Xx.
Notary Public of New Jersey
My Commission Expires
March 18, 0000
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XXXXX XX XX )
) ss:
COUNTY OF CAMDEN )
On the 30th day of May, 1992, before me personally came XXXX X. XXXXXX,
to me known, who, being by me duly sworn, did depose and say that he resides at
0000 Xxx Xxxxx Xxxx, Xxxxxxxxxx, Xxx Xxxxxx; that he is the President of
X.X. XXXXX INCORPORATED, the Corporation described in and which executed the
foregoing instrument; that the foregoing instrument was executed by order of the
Board of Directors of said Corporation, and that he signed his name thereto by
like order.
/s/ Xxxxxx X. Xxxx, Xx.
---------------------------------
Notary Public
Xxxxxx X. Xxxx, Xx.
Notary Public of New Jersey
My Commission Expires
March 18, 1997
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