-75-
The March Agreement included the following provision with regard
to goodwill (the goodwill provision):
It is understood that there is no good
will [sic] or similar intangible assets
included in the purchase and sale covered by
this Agreement and that no part of the purchase
price shall be attributed or allocated in any
way to good will [sic].
In addition, the March Agreement allowed NFR to designate an
affiliate (or affiliates) to complete the purchase. NFR designated
NLI and Dial Bank (Dial), NFR's State banking subsidiary.
Consequently, on June 12, 1989, NLI and Dial completed the purchase
from FIA and Commercial in an arm's-length transaction.46 NLI and
Dial paid $77,952,168 and $63,504,452, respectively, for a total
purchase price of $141,456,620. The purchase price was calculated
as follows:
Stockholder's equity (based on historical balance sheet
values, before purchase accounting adjustments)
- Excluded assets
+ FIA notes payable to Commercial or its affiliates
+ Income taxes (as shown on historical balance sheet)
+ Other liabilities NFR did not specifically assume
+ $390,000 ($100,000 for use of trade name and $290,000 for
noncompete agreement)
___________________________________________________
= Total purchase price per purchase agreement
46 While NFR actually entered into the March Agreement and
designated NLI and Dial to complete the purchase, these entities
were affiliates of petitioner, and for convenience we sometimes
refer to petitioner as the purchaser of FIA's assets.
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