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entitled “Supplement to Agreement” (1993 supplement). Under the
terms of the 1993 addendum, Burien Nissan was to redeem Mr.
Johnston’s capital stock for $434,677 and pay Mr. McLaughlin
$65,323.10 As of December 31, 1993, the books and records of
Burien Nissan reflected an obligation of $434,677 to “Don
Johnston and/or Johnston Family Partnership.”
Under the terms of paragraph 1.6 in the 1993 supplement, Mr.
Johnston was prohibited from competing with Burien Nissan from
January 15, 1994 through January 15, 1999, in a geographical area
defined as “a line south of Boeing Field running east and west,
west east and south King County lines”. Burien Nissan was
required to pay Mr. Johnston a fee totaling $352,503 for
complying with the noncompetition agreement. Payment of the fee
was to be made as follows:
60 monthly payments of $5,117: $307,020
Lump sum payment: 45,503
Total payments: 352,523
Mr. Whitehead called Mr. Johnston to say that there had been
a $20 error in the computation of amount due under paragraph 1.6
of the 1993 supplement and that Burien Nissan would pay him $20
less in one of the checks.11
10Burien Nissan negotiated a loan for $500,000 from Primus
Financial Services, Inc. (Primus). The purpose of the Primus
loan was to complete the acquisition of Burien Nissan by the
purchasers.
11Par. 1.6 of the 1993 supplement required 60 monthly
(continued...)
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