Step 1:   Similar to contributions to other retirement plans, the company makes a tax-deductible annual contribution (and dividend, possibly) to the ESOP

Step 2:   Immediately after receiving the wire transfer with the annual contribution, the ESOP wires the money to the company as a repayment of the Inside Loan

Step 3:   The repayment of a portion of the Inside Loan triggers a proportionate allocation of shares to the accounts of eligible ESOP participants

Step 4:   The company can use its enhanced cash flows to service the Outside Loan and the Seller Note