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The reorganization was completed on January 31, 1978, and
51.3 shares of the common stock of Schnitzer-PMS were issued to
IRA on February 14, 1978. All shares of Schnitzer-PMS (including
those issued to IRA) were pledged to secure Century Development's
loan balance.
In conjunction with the sale of the Schnitzer-PMS stock to
IRA, IRA and Century entered into a stock agreement. Article III
of the agreement gave Century an option to purchase the
Schnitzer-PMS stock upon the death of last to die of Kanter,
Weisgal, and Schott. Section 3.03 of the stock agreement
provided that the purchase price for IRA’s shares of Schnitzer-
PMS stock would be an amount equal to the sum of:
(a) Eight (8) times the average annual pretax
operating income of the Corporation for the five (5)
full fiscal years of the Corporation ending on or
immediately preceding the Option Date or such lesser
number of full years of operation of the Corporation as
shall have expired from the date of this Agreement;
plus
(b) The difference (but not less than zero) between
(i) the book value of the assets of the Corporation
used in its business of building management, consulting
and cleaning and (ii) the lesser of Three Hundred
Thousand Dollars ($300,000) or one and one-half (1-1/2)
times the Corporation’s average receipts for one (1)
month, computed for the twelve (12) month period
immediately preceding the Option Date; plus
(C) The fair market value of any other assets of the
Corporation.
The computation of operating income in Subsection (a)
hereof shall be computed solely with reference to the
Corporation’s business of building management,
consulting and cleaning. The computation of the
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