Res 1986-116 - Laserfiche WebLink

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EXZCU'l':E:D IN m. The parties believe that the proceeds received by the SHAREHOLDERS for the purchase and redemption of their Shares shall be treated as the amount realized from the sale of a capital asset for federal income tax purposes. If the Internal Revenue Service ("IRS") proposes an adjustment for any SHAREHOLDER to the effect that all or a portion of the gain or of the proceeds constitute ordinary income, that SHAREHOLDER shall promptly notify NPC and the City of San Marcos in writing. That SHAREHOLDER shall, in its name but at the expense of NPC, diligently contest, through a final judicial appeal that determination by the Internal Revenue Service. NPC and the City of San Marcos through its counsel shall have the right to participate in these proceedings. After these audit or appeal proceedings are final, COMPANY agrees to pay that SHAREHOLDER an amount equal to any difference between (i) those taxes actually found due and resulting solely and directly from the sale and redemption of the Shares and (ii) the amount of taxes that would have been due if the sale or redemption of tne Shares were treated as a sale of a capital asset resulting in a long term capital 'Jain. NPC agrees to loan COMPANY additional sums of money sufficient to make any additional payments to any SHAREHOLDER required by this paragraph. The loan shall be payable by COMPANY to NPC within the time period left under the term stated in the Promissory Note attached hereto as Exhibit "A" at the time the loan is made. The parties herein shall agree on all other terms and conditions of the loan at such time as an additional loan is deemed necessary. MULTIPLE ORIGINALS this day of , 1 9 AT'rEST: ELIM WATER COMPANY, INC. Secretary By: Name: Title: EXECUTED IN MULTIPLE ORIGINALS this day of , 19 Name: Ruth Ann Hoch, Shareholder 7.