Custom Chrome, Inc. and Subsidiaries - Page 11

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          was entered into, Cruze was paid $16.75 million, instead of $18             
          million, for his stock in petitioner.                                       
               The $1.25 million was paid to Panzica, Battistella, and                
          Navarra in the following respective amounts:                                

                         Employee                  Amount                             
                         Panzica                  $1,000,000                          
                         Battistella              200,000                             
                         Navarra                   50,000                             
                                        Total     $1,250,000                          

               Of the $200,000 paid to Battistella, $51,000 ($20,000 in               
          principal and $31,000 in interest) in substance and in fact                 
          related to and constituted repayments of principal and interest             
          on a $20,000 loan that in earlier years petitioner had received             
          from Battistella.                                                           
               Panzica, Battistella, and Navarra were regarded by Cruze as            
          key employees of petitioner and, at Cruze’s suggestion, they were           
          requested to enter into, and they did agree to, covenants not to            
          compete with petitioner for a period of 3 years which period was            
          not to begin until they left their employment with petitioner.              
          No dollar amount was allocated to the covenants not to compete              
          that were entered into by Panzica, Battistella, and Navarra.                

               CC Acquisition incurred expenditures in connection with the            
          LBO totaling $1,342,347, for which petitioner became liable as              
          the successor corporation.  Of these total $1,342,347 in                    

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Last modified: May 25, 2011