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By March 2, 1982, however, Connolly owned 100 shares (100
percent) of the Gateway Corp. stock. A stock option agreement
"made and entered into" September 18, 1981, but "executed as of"
March 2, 1982, recites that Connolly owned 100 shares of $1 par
value common stock of Gateway Corp. Under the stock option
agreement, Connolly granted Essex Corp. a 10-year option to
purchase 80 shares of the common stock of Gateway Corp. for $100
per share.18 In consideration for the option, Essex Corp. agreed
to pay Connolly $1,000 per year for the term of the option.
Eulich, Kanter, and Connolly also formed a partnership
called Essex Hotel Management Co. (the Essex partnership or
Essex), which was organized effective January 1, 1982. The
(...continued)
Hotel Management Company stock - the
original is being circulated for
signature currently.
As we discussed on the phone, we will be sending you a
check for $10,000.00 which represents the
capitalization of Gateway that should be used as the
corporation's initial bank deposit. When the first
profit distribution is made we would appreciate your
sending us a check for $2,000 representing 20% of this
capital.
If you have any questions about this transaction,
please let me know. We are looking forward to working
with you in what is hopefully a mutually pleasant and
profitable venture.
18
On Dec. 21, 1984, Essex Corp. assigned its option to
purchase the 80 shares of Gateway Corp. to the Essex partnership.
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