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payable to Paul Brown dated March 1, 1983, in the principal
amount of $3.51 million ($30,000 per share), bearing simple
interest at 9 percent per annum, with all principal and interest
due on February 28, 1993. Sawyer paid no cash for Brown's stock.
Sawyer secured the promissory note by pledging to Brown 329
shares of Bengals stock owned by Sawyer (including the 117 shares
Sawyer bought from Brown). Assuming no prepayments, Sawyer would
owe $6,669,000 to Paul Brown under the note on March 1, 1993.
Sawyer and Brown agreed that the transfer would comply with the
1980 voting trust agreement, the 1980 shareholders' agreement,
the controlling shareholder S corporation agreement dated May 16,
1983, and the NFL constitution and bylaws. Brown and Sawyer
believed that the 1983 agreements met NFL requirements.
3. 1983 Stock Option Agreement
Sawyer and Mike and Peter Brown entered into a stock option
agreement dated as of March 1, 1983. The stock option agreement
provided in part as follows: (a) Sawyer granted to Mike and
Peter Brown an irrevocable option to buy up to 329 common shares
of Bengals stock owned by Sawyer for $25,000 per share; (b) Mike
and Peter Brown could exercise the option from March 1, 1993, to
February 28, 1996; (c) if Mike and Peter Brown bought less than
3(...continued)
1983". However, because of the time required to get all of the
Bengals shareholders to agree to the S corporation election, the
closing of the sale of Paul Brown's Bengals stock was on May 16,
1983.
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